Is Spray Net restricted from establishing another business utilizing the Proprietary Marks and System within a franchisee's Designated Territory, as long as the franchisee is in compliance with the Franchise Agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not granted any options, rights of first refusal, or similar rights to acquire additional franchises.
Territory Rights
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. For so long as you are in compliance with the terms of your Franchise Agreement, we will not establish any other Business utilizing the Proprietary Marks and System from a location within your Designated Territory. We may establish alternate channels of distribution selling similar services and products, including e-commerce, Internet, mail order or catalogs (as disclosed more fully below under the heading "Reservation of Rights").
Under certain circumstances, you may accept customers from outside your Designated Territory as long as these customers do not reside in the Designated Territory of another franchisee (unless that other franchisee consents). You may not: (i) solicit or advertise within the Designated Territory of another franchisee without that franchisee's express consent and/or cooperation; (ii) solicit or advertise on the Internet without our consent; or (iii) service any customer that resides within the protected territory of another Spray-Net business, unless you obtain the prior consent of the owner of that business.
We reserve the right to develop additional product and service offerings ("Ancillary Services") that we may make available for you to offer through your Franchised Business. We reserve the right to offer such Ancillary Services within your Designated Territory ourselves, through an affiliate of ours, or through another franchisee. You may, subject to your eligibility, purchase the rights to offer Ancillary Services within your Designated Territory(ies). However, nothing in the Franchise Agreement grants you any exclusivity or a right of first refusal related to Ancillary Services in your Designated Territory(ies).
Minimum Performance
Our System has established minimum Gross Sales levels that, if not met by you, will constitute grounds for us to require you to (a) attend additional training, (b) provide an accounting of all local advertising and other marketing spends, including all required amounts paid to Approved Suppliers, and/or (c) revoke your approval to provide any previously-authorized Ancillary Services.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory. However, as long as a Spray Net franchisee remains in compliance with the terms of their Franchise Agreement, Spray Net will not establish another business utilizing the Proprietary Marks and System from a location within the franchisee's Designated Territory. Spray Net retains the right to establish alternate channels of distribution selling similar services and products, including e-commerce, Internet, mail order, or catalogs.
Spray Net and its affiliates have the right to own and operate franchised businesses outside of the Designated Territory under the Proprietary Marks. They also have the right to operate businesses under different marks inside or outside the Designated Territory, provided these businesses do not primarily offer painting products and services. Spray Net can use the Proprietary Marks and System in alternative distribution channels, such as wholesale and retail stores, the Internet, and mail order catalogs, without regard to location.
However, if a Spray Net franchisee fails to meet minimum gross sales levels, Spray Net has grounds to terminate the Franchise Agreement or reduce the size of the Designated Territory. If the territory size is reduced, Spray Net may then operate or license others to operate businesses outside the revised Designated Territory. The minimum gross sales depend on the number of Designated Territories purchased and the years in operation. For example, the minimum gross sales for the first year of operation for one Designated Territory is $300,000, while for two Designated Territories it is $350,000, and for three Designated Territories it is $375,000.