factual

What section of the Spray Net franchise agreement addresses the sale, transfer, or encumbrance of the franchise?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

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.

SPRAY-NET INC. MINNESOTA ADDENDUM TO THE FRANCHISE AGREEMENT

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).

Transfers: In the event of a merger or a business acquisition of a franchise location, the license to use the franchise in the Spray-Network with the customer information may be transferred to the new owner.

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

What This Means (2025 FDD)

Based on the 2025 Spray Net Franchise Disclosure Document, the Maryland addendum includes information regarding the sale and transfer of a franchise. Specifically, it 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 addendum modifies the standard franchise agreement to comply with Maryland law, ensuring franchisees do not waive rights under the Maryland Franchise Law during a sale or transfer.

Additionally, the Minnesota addendum addresses the franchisee's obligation to execute a general release upon assignment. It states that the sections of the Franchise Agreement regarding the obligation to execute a general release upon assignment or renewal are deleted in their entirety in accordance with Minnesota Rule 2860.4400(D). This means that Minnesota franchisees are not required to sign a general release when assigning or renewing their franchise agreement, providing them with additional protection under Minnesota law.

Item 23 also mentions "Transfers" in the context of intellectual property rights related to the Spray-Network software. It specifies that in the event of a merger or business acquisition of a franchise location, the license to use the franchise in the Spray-Network with customer information may be transferred to the new owner. This indicates that the right to use the Spray-Network software and customer data is transferable under certain conditions, such as a merger or acquisition, which could be beneficial for a franchisee looking to sell their business.

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.