What rights does the Spray Net franchisor have in the event of a franchisee's breach of the lease?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's failure to comply with any of Franchisor's other System standards and specifications in the operation of the Franchised Business as set forth in the Manuals; and (ii) fails to cure such breach or violation within thirty (30) days of the date Franchisee is provided with notice thereof by Franchisor.
- D. Loss of Designated Territory.
Notwithstanding the foregoing, if Franchisee is in default of this Agreement under Section 6(Z), Franchisor may, in its sole discretion and as an alternative to terminating this Agreement, elect to reduce the size of Franchisee's Designated Territory and own and operate, or license another to operate, additional Spray-Net businesses in the Designated Territory.
In the event Franchisor elects to reduce Franchisee's Designated Territory and/or terminate Franchisee's exclusive rights therein, Franchisor will provide Franchisee with written notice thereof.
Upon receipt of such notice, Franchisee will have ten (10) calendar days to execute an addendum to this Agreement detailing the revised boundaries of the Designated Territory and/or termination of exclusive rights therein.
If Franchisee does not execute this Addendum with the prescribed time period, then Franchisor may, at its option, immediate terminate this Agreement upon notice to Franchisee.
- E. Step-In Rights.
In addition to Franchisor's right to terminate this Agreement, and not in lieu of such right or any other rights hereunder, if this Agreement is subject to termination due to Franchisee's failure to cure any default within the applicable time period (if any), then Franchisor has the right, but not the obligations, to enter the Premises and exercise complete authority with respect to the operation of the Franchised Business until such time that Franchisor determines, in its reasonable discretion, that the default(s) at issue have been cured and that Franchisee is otherwise in compliance with the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, if a franchisee fails to comply with the System standards and specifications, and does not cure the breach within 30 days after notice from Spray Net, the franchisor has specific rights. Spray Net may choose to reduce the size of the franchisee's designated territory or allow another operator within that territory as an alternative to terminating the agreement.
If Spray Net decides to reduce the territory or terminate exclusive rights, they will provide written notice. The franchisee then has ten calendar days to sign an addendum to the agreement reflecting these changes. Failure to sign within this timeframe allows Spray Net to immediately terminate the agreement.
Additionally, if the agreement is subject to termination due to the franchisee's failure to cure a default, Spray Net has the right to enter the premises and take control of the franchised business's operations. This control continues until Spray Net determines the defaults have been resolved and the franchisee is compliant with the agreement terms. This "step-in right" is not in place of Spray Net's right to terminate the agreement or any other rights they possess.
These provisions outline the specific actions Spray Net can take if a franchisee violates the franchise agreement, ranging from territory reduction to operational control, and ultimately, termination. A prospective franchisee should carefully consider these potential consequences and ensure they understand the standards and specifications required to maintain compliance and avoid such actions by the franchisor.