What standards must a transferee meet to the satisfaction of Spray Net to be approved?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
or, of any and all claims against Franchisor and Franchisor's affiliates and officers, directors, shareholders and employees, in their corporate and individual capacities;
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- Franchisee or transferee shall provide Franchisor a copy of the executed purchase agreement relating to the proposed transfer with all supporting documents and schedules, including transferee's assumption of an agreement to faithfully perform all of Franchisee's obligations under this Agreement;
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- The transferee shall demonstrate to Franchisor's satisfaction that he or she meets Franchisor's educational, managerial and business standards; possesses a good moral character, business reputation and credit rating; has the aptitude and ability to conduct the business to be transferred; and has adequate financial resources and capital to meet the performance obligations under this Agreement; however, transferee shall not be in the same business as Franchisor either as licensor, franchisor, independent operator or licensee of any other business or chain which is similar in nature or in competition with Franchisor, except that the transferee may be an existing franchisee of ours;
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- The transferee shall execute Franchisor's then-current franchise agreement (which may contain materially different terms than this Agreement) for the remaining balance of Franchisee's term under this Agreement, with transferee's term commencing on the date the transferee executes the then-current franchise agreement;
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- Franchisee or transferee shall pay Franchisor a transfer fee equal to Ten Thousand Dollars ($10,000), except in the case of (i) a transfer to a corporation formed for the convenience of ownership, or (ii) for approved intra-family transfers or for a transfer which arises upon death or mental incompetency;
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- If applicable, Franchisee will reimburse Franchisor for any and all costs of brokerage commissions, finder's fees, or similar charges before the Transfer occurs;
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Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a transferee must meet several standards to gain approval from Spray Net. The transferee must demonstrate that they meet Spray Net's educational, managerial, and business standards. They must also possess a good moral character, business reputation, and credit rating.
Furthermore, the transferee needs to show that they have the aptitude and ability to conduct the Spray Net business being transferred. They must also demonstrate that they have adequate financial resources and capital to meet the performance obligations outlined in the Franchise Agreement. However, the transferee cannot be in the same business as Spray Net, whether as a licensor, franchisor, independent operator, or licensee of a similar or competing business, unless they are an existing Spray Net franchisee.
In addition to meeting these standards, the franchisee, their principals, and the transferee must execute a general release in a form satisfactory to Spray Net, releasing all claims against Spray Net and its affiliates, officers, directors, shareholders, and employees. The franchisee or transferee must also provide Spray Net with a copy of the executed purchase agreement and all supporting documents, including the transferee's agreement to faithfully perform all of the franchisee's obligations under the existing Franchise Agreement. The transferee will also need to execute Spray Net's then-current franchise agreement, which may contain different terms, for the remaining balance of the original franchisee's term.