What is the process for Spray Net to obtain reimbursement for management services when operating a Spray Net franchise on behalf of a deceased or disabled franchisee?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of Franchisee's death, disability, absence or otherwise, Franchisor may (but is not required to) operate the Franchised Business on Franchisee's behalf and at Franchisee's expense for such period of time (and under such terms and conditions) as Franchisor determines, including paying out the assets and/or revenues of the Franchised Business to cover any or all past, current and/or future obligations of the Franchised Business (including any amounts owed to Franchisor and/or any affiliate) in such priorities as Franchisor determines in Franchisor's sole discretion.
Franchisor may pay itself a reasonable amount to reimburse Franchisor for Franchisor's management services and other costs.
Franchisor may obtain approval of a court or arbitrator for any such arrangements, the attorney's fees and other costs incurred in connection with obtaining such approval to be charged against the assets and/or revenues of the Franchised Business.
Franchisee (and/or Franchisee's estate) will indemnify Franchisor against any costs and/or liabilities incurred by it in connection with, or related in any way to, the operation (or otherwise) of the Franchised Business.
Franchisor will not collect any transfer fee if there is a transfer under this Section 13(B) to an immediate family member of the Franchisee that Franchisor approves under this Section 13(E).
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, in the event of a franchisee's death, disability, or absence, Spray Net has the option, but not the obligation, to operate the franchise on the franchisee's behalf and at the franchisee's expense. This includes using the assets and revenues of the franchise to cover past, current, and future obligations, including amounts owed to Spray Net or its affiliates. Spray Net has the sole discretion to determine the priority of these payments.
Spray Net is allowed to pay itself a reasonable amount to cover reimbursement for management services and other related costs incurred during the period they are operating the franchise. To formalize these arrangements, Spray Net may seek approval from a court or arbitrator. The legal fees and other costs associated with obtaining this approval can be charged against the assets or revenues of the franchise.
The franchisee or their estate is required to indemnify Spray Net against any costs or liabilities that Spray Net incurs while operating the franchise. However, Spray Net is under no obligation to operate the franchise or incur any obligations on behalf of an incapacitated franchisee during or after the 180-day period following the event. If necessary, the franchisee or their legal representative must appoint a previously approved acting interim manager to operate the franchise during this 180-day period.