factual

Does Spray Net have the right to transfer its interest in the Franchise Agreement?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

The following is added to Item 17:

The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.

You may bring an action under such law within three years after the grant of the franchise.

You have the right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction in the State of Maryland.

The Franchise Agreement provides for termination upon bankruptcy of the franchisee. This provision may not be enforceable under federal bankruptcy law.

SPRAY-NET INC. MARYLAND ADDENDUM TO THE FRANCHISE AGREEMENT

Under COMAR 02-02-08-16L, the general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Law.

Source: Item 23 — RECEIPTS (FDD pages 75–219)

What This Means (2025 FDD)

The 2025 Spray Net Franchise Disclosure Document does not explicitly state whether Spray Net has the right to transfer its interest in the Franchise Agreement. However, the document does include addenda for Maryland and Minnesota that address assignment or transfer in the context of required general releases. These addenda modify terms related to releases required for renewal, sale, and/or assignment/transfer, indicating that such transfers are contemplated within the franchise agreement.

Specifically, the Maryland addendum states that "The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law." This implies that while a general release might typically be required during a transfer, it cannot waive rights under Maryland franchise law. Similarly, the Minnesota addendum notes that "The Sections of the Franchise Agreement regarding your obligation to execute a general release upon assignment or renewal are deleted in their entirety in accordance with Minnesota Rule 2860.4400(D)."

While these clauses suggest that Spray Net franchise agreements may include provisions for assignment or transfer, the absence of a direct statement about Spray Net's right to transfer its interest means prospective franchisees should seek clarification from the franchisor. It would be prudent to ask Spray Net about the conditions under which they can transfer their interest in the Franchise Agreement, and what protections franchisees have in such a scenario.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.