Where can the post-term covenants not to compete for Spray Net be found in the agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
B. After the Term of this Agreement.
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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, the post-term covenants not to compete are detailed in Item 23, specifically in the section addressing the period after the agreement's expiration, nonrenewal, transfer, or termination. These covenants outline restrictions on the franchisee, their principals, owners, guarantors, and their immediate family members regarding involvement with any business that competes with Spray Net.
The agreement specifies that for two years following the termination of the franchise agreement, franchisees are restricted from engaging in activities such as offering or granting licenses or franchises, or establishing joint ventures for a Competing Business. This restriction applies to any location where Spray Net has offered or sold franchises as of the termination date.
Additionally, franchisees are prohibited from owning, maintaining, or being involved with any other Competing Business within their Designated Territory, a 50-mile radius of their Designated Territory, a 50-mile radius of any Spray-Net franchised business, or a 50-mile radius of any other designated territory granted by Spray Net. These detailed restrictions aim to protect Spray Net's market and franchise system after a franchise agreement concludes.