What section of the Spray Net agreement contains information about restrictive covenants?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Y. IF FRANCHISEE IS AN INDIVIDUAL AND FRANCHISEE'S SPOUSE HAS NOT SIGNED THE FRANCHISE AGREEMENT DIRECTLY, THEN FRANCHISEE'S SPOUSE MUST EXECUTE THIS FORM OF PERSONAL GUARANTY.
ARTICLE I PERSONAL GUARANTY
The undersigned persons (individually and collectively "you") hereby represent to SPRAY-NET INC. (the "Franchisor") that you are all the owners/principals/members/shareholders/managers/partners, as applicable, of the business entity named (the "Franchisee"), as well as their respective spouses, as of the date this Personal Guaranty (the "Personal Guaranty" or "Guaranty") is executed.
In consideration of the grant by Franchisor to the Franchisee as herein provided, each of you hereby agree, in consideration of benefits received and to be received by each of you, jointly and severally, and for yourselves, your heirs, legal representatives and assigns, to be firmly bound by all of the terms, provisions and conditions of the foregoing SPRAY-NET Franchise Agreement, and any other agreement between Franchisee and Franchisor and/or its affiliates, and do hereby unconditionally guarantee the full and timely performance by Franchisee of each and every obligation of Franchisee under the aforesaid Franchise Agreement or other agreement between Franchisor and Franchisee, including, without limitation: (i) any indebtedness of Franchisee arising under or by virtue of the aforesaid Franchise Agreement; (ii) the prohibition of any change in the percentage of Franchisee owned, directly or indirectly, by any person, without first obtaining the written consent of Franchisor prior to said proposed transfer as set forth in the Franchise Agreement; (iii) those obligations related to confidentiality, non-disclosure and indemnification; and (iv) the in-term and post-term covenants against competition, as well as all other restrictive covenants set forth in the Franchise Agreement.
ARTICLE II CONFIDENTIALITY
During the initial and any renewal terms of the Franchise Agreement and this Guaranty, you will receive information, which Franchisor considers to be Confidential Information, trade secrets and/or confidential information, including without limitation: (i) site-selection criteria; (ii) methods, techniques and trade secrets for use in connection with the proprietary business operating system that Franchisor and its affiliates have developed (the "System")forthe establishment and operation of a SPRAY-NET business(each, an "Franchised Business") and/or franchise (each, a "Franchised Business"); (iii) marketing research and promotional, marketing and advertising programs for the Franchised Business; (iv) knowledge of specification for and suppliers of, certain products, fixtures, furnishings, equipment and inventory used at the Franchised Business (v) knowledge of the operating results and financial performance of other Franchised Businesses; (vi) customer communication and retention programs, along with data used or generated in connection with those programs; (vii) Franchisor's proprietary Manuals and other instructional manuals, as well as any training materials and information Franchisor has developed for use in connection with the System; (viii) information regarding the development of Franchisor's proprietary marks (the "Proprietary Marks");
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to the 2025 Spray Net Franchise Disclosure Document, Item 23 references that the in-term and post-term covenants against competition, as well as all other restrictive covenants, are set forth in the Franchise Agreement.
Specifically, after the agreement expires, is not renewed, is transferred, or is terminated, the franchisee and related parties are restricted from involvement with any business that competes with Spray Net. This restriction applies for two years. This includes offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of this covenant extends to any location where Spray Net has offered or sold franchises as of the termination or expiration date.
Additionally, for two years post-termination, franchisees are restricted from owning, maintaining, engaging in, or being employed by any other Competing Business within the Designated Territory, within a 50-mile radius of the Designated Territory, within a 50-mile radius of any Spray-Net franchised business, or within a 50-mile radius of any other designated territory granted by Spray Net. These restrictions aim to protect Spray Net's market and business interests by preventing former franchisees from leveraging their knowledge and experience to compete against the franchise system.