What happens if a Spray Net franchisee breaches any terms of the lease?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's failure to comply with any of Franchisor's other System standards and specifications in the operation of the Franchised Business as set forth in the Manuals; and (ii) fails to cure such breach or violation within thirty (30) days of the date Franchisee is provided with notice thereof by Franchisor.
- D. Loss of Designated Territory.
Notwithstanding the foregoing, if Franchisee is in default of this Agreement under Section 6(Z), Franchisor may, in its sole discretion and as an alternative to terminating this Agreement, elect to reduce the size of Franchisee's Designated Territory and own and operate, or license another to operate, additional Spray-Net businesses in the Designated Territory.
In the event Franchisor elects to reduce Franchisee's Designated Territory and/or terminate Franchisee's exclusive rights therein, Franchisor will provide Franchisee with written notice thereof.
Upon receipt of such notice, Franchisee will have ten (10) calendar days to execute an addendum to this Agreement detailing the revised boundaries of the Designated Territory and/or termination of exclusive rights therein.
If Franchisee does not execute this Addendum with the prescribed time period, then Franchisor may, at its option, immediate terminate this Agreement upon notice to Franchisee.
- E. Step-In Rights.
In addition to Franchisor's right to terminate this Agreement, and not in lieu of such right or any other rights hereunder, if this Agreement is subject to termination due to Franchisee's failure to cure any default within the applicable time period (if any), then Franchisor has the right, but not the obligations, to enter the Premises and exercise complete authority with respect to the operation of the Franchised Business until such time that Franchisor determines, in its reasonable discretion, that the default(s) at issue have been cured and that Franchisee is otherwise in compliance with the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
The 2025 Spray Net Franchise Disclosure Document (FDD) outlines the repercussions for franchisees who fail to meet the obligations of their franchise agreement. Specifically, if a Spray Net franchisee fails to cure a breach of the agreement within 30 days after receiving notice from Spray Net, several actions can be taken.
One potential consequence is the loss of the designated territory. Spray Net, at its discretion, may reduce the size of the franchisee's territory or license another operator within that territory if the franchisee defaults under Section 6(Z) of the agreement. In such cases, Spray Net will provide written notice, and the franchisee has ten calendar days to execute an addendum detailing the revised territory boundaries or the termination of exclusive rights. Failure to execute this addendum within the specified timeframe allows Spray Net to immediately terminate the agreement.
In addition to the right to terminate, Spray Net has the option to exercise step-in rights. This means that if the franchise agreement is subject to termination due to the franchisee's failure to cure a default, Spray Net can enter the premises and assume complete authority over the operation of the franchised business. This control remains until Spray Net determines, in its reasonable discretion, that the defaults have been resolved and the franchisee is in compliance with the agreement terms. This step-in right is not in lieu of the right to terminate the agreement but is an additional measure Spray Net can take to ensure the business's proper operation and compliance.