Does Spray Net require approval for all transfers of the franchise agreement by the franchisee?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| names (if permitted) used in connection with the Franchised Business (as well as all related listings) to us or our designee. | |||
| j. | Assignment of contract by Franchisor | Section 13(G) | No restriction on our right to assign. |
| k. | "Transfer" by | Section 13(A) | Includes any transfer of Franchise Agreement, assets of the |
| Franchisor – | and Section | Franchised Business, or ownership change in you (as the | |
| defined | 13(C) | Franchisee). | |
| l. | Franchisor's approval of transfer by Franchisee | Section 13(A) | We must approve all transfers, but we will not unreasonably withhold our approval if you meet our conditions. |
| m. | Conditions for Franchisor's approval of transfer | Section 13(E) | We have the right to impose the following conditions on any transfer by you: (i) all of your accrued monetary obligations under the Franchise Agreement have been satisfied; (ii) you cure all existing defaults under the Franchise Agreement; (iii) you and your principals must execute a general release; (iv) you or the transferee provides us with a copy of the executed purchase agreement; (v) the transferee must meet our then-current qualifications and criteria for a new franchisee; (vi) the transferee executes our then-current franchise agreement; (vii) you or the transferee pays us a transfer fee of $10,000; (viii) the transferee satisfactorily completes our Initial Training Program; (ix) you must comply with all post-termination provisions of the Franchise Agreement; (x) the transferee must obtain all permits and licenses required for the continued operation of the Franchised Business; (xi) all applicable lessors consent to the proposed transfer; (xii) if applicable, you reimburse us for any and all costs of brokerage commissions, finder's fees, or similar charges; and (xiii) the transfer is made in compliance with all applicable laws. |
| n. | Franchisor's right of first refusal to acquire Franchisee's business | Section 13(D) | If (a) you propose to transfer any of your interest in the Franchise Agreement or Franchised Business or any interest in your lease for the Premises, or (b) your owners propose to transfer any interest in you (if you are an entity), except in certain circumstances (death/disability or transfer from individual franchisee to business entity), then you shall first offer to sell such interest to us on the same terms and conditions as offered by such third party. If we do not exercise this right, then you will have 60 days to effectuate the transfer to the third party that made the offer on those exact terms – if the transfe |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–62)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the company requires approval for all transfers of the franchise agreement by the franchisee. Specifically, the FDD states that Spray Net "must approve all transfers, but [they] will not unreasonably withhold [their] approval if you meet [their] conditions."
Spray Net has the right to impose conditions on any transfer by the franchisee. These conditions include ensuring all monetary obligations are satisfied, curing any existing defaults, executing a general release, providing a copy of the executed purchase agreement, and ensuring the transferee meets Spray Net's qualifications for a new franchisee. The transferee must also execute the then-current franchise agreement and complete the initial training program.
Additional conditions include paying a transfer fee of $10,000, complying with post-termination provisions, obtaining necessary permits and licenses, securing lessor consent, reimbursing brokerage commissions, and ensuring compliance with all applicable laws. Furthermore, Spray Net retains the right of first refusal to acquire the franchisee's business under the same terms offered by a third party. If Spray Net declines, the franchisee has 60 days to complete the transfer with the third party under the original terms; otherwise, Spray Net has another 30 days to exercise its right of first refusal.