For how long after the Spray Net Franchise Agreement expires or terminates are franchisees restricted from involvement with competing businesses?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- For a period of two (2) years after the expiration and nonrenewal, transfer or termination of this Agreement, regardless of the cause, neither Franchisee, its principals, owners and guarantors, nor any member of the immediate family of Franchisee, its principals, owners or guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business that competes in whole or in part with Franchisor by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of the covenant contained in this Section is any location where Franchisor can demonstrate it has offered or sold franchises as of the date this Agreement is terminated or expires.
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- For a period of two (2) years after the expiration and nonrenewal, transfer or termination of this Agreement, regardless of the cause, neither Franchisee, its principals, owners and guarantors, nor any member of the immediate family of Franchisee, its principals, owners or guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation:
- a. Own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with any other Competing Business:
- i. within the Designated Territory;
- ii. within a fifty (50) mile radius of the Designated Territory;
- iii. within a fifty (50) mile radius of any Spray-Net franchised business
that is open and operating as of the date this Agreement expires and/or is terminated; or
iv. within a fifty (50) mile radius of any other designated territory that has been granted by Franchisor or its affiliates in connection with a Spray-Net franchised business as of the date this Agreement expires and/or is terminated, regardless of whether a Franchised Business is open and operating in that designated territory; or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees face certain restrictions regarding involvement with competing businesses for a period of two years after the franchise agreement expires, is not renewed, is transferred, or is terminated. This restriction applies regardless of the reason for termination. This covenant extends not only to the franchisee but also to their principals, owners, guarantors, and immediate family members.
The restrictions prevent these individuals from directly or indirectly engaging with any business that competes with Spray Net. This includes offering or granting licenses or franchises, or establishing joint ventures for the ownership or operation of a competing business. The geographic scope of this restriction applies to any location where Spray Net can demonstrate it has offered or sold franchises as of the date the agreement is terminated or expires.
Furthermore, for the same two-year period, these individuals are prohibited from owning, maintaining, or being employed by a competing business within the franchisee's Designated Territory, within a 50-mile radius of the Designated Territory, within a 50-mile radius of any Spray-Net franchised business that is open and operating, or within a 50-mile radius of any other designated territory granted by Spray Net, regardless of whether a franchised business is operating in that territory. This broad geographic restriction could significantly limit a former franchisee's ability to operate a similar business or work for a competitor after leaving the Spray Net system.