Is Spray Net restricted from using the Proprietary Marks and System in alternative channels of distribution, such as wholesale or retail stores?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Designated Territory independent of your entire Franchised Business to another person or franchisee without our written permission.
You expressly understand and agree that we and our affiliates shall have the right, in our sole discretion, to: (i) own and operate franchised businesses at any location(s) outside of the Designated Territory under the Proprietary Marks, or to license others the right to own and operate Spray-Net businesses at any location(s) outside of the Designated Territory under the Proprietary Marks and System; (ii) the right to own and operate businesses under different marks at any location(s) inside or outside of your Designated Territory, or license to others the right to own and operate such businesses, under different marks at any location(s) inside or outside of Designated Territory (such businesses will not primarily provide painting products and services); (iii) use the Proprietary Marks and System in connection with services and products, promotional and marketing efforts, or related items, or in alternative channels of distribution, including the sale of any products in wholesale and retail stores, via the Internet, and through mail order catalog, without regard to location; and (iv) use the Proprietary Marks and System, and license others to use the Marks and System to engage in any other activities not expressly prohibited in this Agreement.
You do not have any of the foregoing rights under your Franchise Agreement, and we are not required to provide you any compensation in connection with (a) soliciting or accepting orders inside your Designated Territory via any alternative channels of distribution or (b) any of the other reserved rights above.
Additional Disclosures
We have not established other franchises or company-owned outlets or another distribution channel selling or leasing similar products or services under a different trademark. Neither we nor either of our affiliates
have established, or presently intend to establish, any other franchised or company-owned businesses that sell our Proprietary Products under a different trade name or trademark, but we reserve the right to do so in the future.
ITEM 13 TRADEMARKS
Under your Franchise Agreement, we will grant you a non-exclusive license to use our then-current Proprietary Marks solely in connection with your Franchised Business and as authorized in your Franchise Agreement, our Manuals or otherwise by us in writing. We currently license you the following Marks, including our current principal mark SPRAY-NET, that are registered with the United States Patent and Trademark Office ("USPTO"):
| MARK | REGISTRATION NUMBER | REGISTRATION DATE |
|---|---|---|
| SPRAY-NET | 7702917 | February 25, 2025 |
| 7702918 | February 25, 2025 |
Our Affiliate, SN Quebec, intendsto file all required affidavits with the USPTO to maintain the registrations for the Proprietary Marks above. As of the Issuance Date, SN Quebec has not been required to file any renewals for the above marks.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net retains the right to use its Proprietary Marks and System in alternative channels of distribution. This means Spray Net is not restricted from selling products in wholesale and retail stores, via the Internet, and through mail-order catalogs, regardless of location. This right is explicitly reserved by Spray Net, and franchisees do not have any rights to compensation related to these alternative channels of distribution.
For a prospective Spray Net franchisee, this is an important consideration because it means that Spray Net can compete with its own franchisees through other sales channels. While a franchisee may be focusing on direct sales within their designated territory, Spray Net can also sell directly to customers through online channels or retail partnerships, potentially impacting a franchisee's market share and revenue.
Furthermore, the Franchise Agreement does not grant franchisees the right to sell Spray Net merchandise via wholesale or to distribute, market, or implement products and services in any channel of distribution not specifically identified in the agreement. This limitation reinforces Spray Net's control over distribution channels and product offerings, ensuring franchisees adhere to the approved business model. Franchisees should be aware that Spray Net reserves the right to engage in activities not expressly prohibited in the agreement, providing flexibility for the company to adapt its business strategies without necessarily benefiting the franchisees directly.
Spray Net also retains the right to develop additional product and service offerings, called "Ancillary Services", that they may offer within a franchisee's Designated Territory themselves, through an affiliate, or through another franchisee. A franchisee may purchase the rights to offer Ancillary Services within their territory, but the Franchise Agreement does not grant any exclusivity or right of first refusal related to these Ancillary Services.