Can Spray Net terminate the Franchise Agreement without cause?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise Agreement may be terminated automatically and without notice from us if: (i) you become insolvent or make a |
| Provision | Franchise | Summary |
|---|---|---|
| Agreement | ||
| Section 15(B) | general assignment for the benefit of creditors; (ii) a bankruptcy | |
| petition if filed by or against you and not dismissed within 30 | ||
| days; (iii) a bill in equity or appointment of receivership is filed | ||
| in connection with you or the Franchised Business; (iv) a receiver | ||
| or custodian of your assets of property is appointed; (v) a final | ||
| judgment in the amount of $10,000 or more is entered against you | ||
| and not satisfied within 60 days (or longer period if we consent); | ||
| and (vi) | ||
| you attempt to make an invalid transfer in violation of | ||
| Section 13 of your Franchise Agreement. | ||
| Your Franchise Agreement may be terminated with notice but | ||
| without an opportunity to cure: (i) if you commit any fraud or | ||
| misrepresentation in the establishment or operation of the | ||
| Franchised Business; (ii) if you fail to attend and complete the | ||
| Initial Training Program; (iii) if you receive 3 or more notices to | ||
| cure the same or similar defaults within any 12-month period; (iv) | ||
| you violate the in-term restrictive covenant; (v) you misuse the | ||
| Proprietary | ||
| Marks or Confidential Information; (vi) you misuses | ||
| any proprietary software; (vii) you default under any other | ||
| agreement with us, our affiliate(s) or any Approved Supplier and | ||
| such default is not cured according to such agreement; (viii) you | ||
| default under your lease; (ix) you fail to open the Franchised | ||
| Business in the time required; (x) you abandon the Franchised | ||
| Business; (xi) you are convicted of a felony or other crime that | ||
| adversely affects the System; (xii) you take for your own personal | ||
| use the assets or property of the Franchised Business | ||
| for any | ||
| competitive or other commercial use; (xiii) there are insufficient | ||
| funds in your Payment | ||
| Account 3 or more times in any 12-month | ||
| period; (xiv) you commit repeated violates of any applicable | ||
| laws; or (xv) you on 3 or more occasions, fail to comply with the | ||
| standards and specifications found | ||
| in the Spray-Net | ||
| Operations | ||
| Manual | ||
| during any 18 month period, whether or not these failures | ||
| were timely cured. | ||
| i. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–62)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the franchise agreement outlines specific conditions under which Spray Net can terminate the agreement with a franchisee. These termination events are not considered 'without cause,' as they are triggered by particular actions or failures on the part of the franchisee.
Spray Net can terminate the franchise agreement with notice but without providing an opportunity to cure the issue if the franchisee engages in certain behaviors. These include committing fraud or misrepresentation in establishing or operating the franchised business, failing to attend and complete the initial training program, receiving three or more notices to cure the same or similar defaults within a 12-month period, violating in-term restrictive covenants, misusing proprietary marks or confidential information, misusing proprietary software, defaulting under any agreement with Spray Net or its affiliates or approved suppliers, defaulting under their lease, failing to open the franchised business on time, abandoning the franchised business, being convicted of a felony or other crime that adversely affects the Spray Net system, taking assets or property of the franchised business for personal or competitive use, having insufficient funds in their payment account three or more times in a 12-month period, committing repeated violations of applicable laws, or failing to comply with standards and specifications in the Spray-Net Operations Manual on three or more occasions during any 18-month period, regardless of whether these failures were cured.
Additionally, Spray Net can terminate the franchise agreement if the franchisee becomes involved in events such as a general assignment for the benefit of creditors, a bankruptcy petition that is not dismissed within 30 days, the filing of a bill in equity or appointment of receivership, the appointment of a receiver or custodian of the franchisee's assets, a final judgment of $10,000 or more entered against the franchisee that is not satisfied within 60 days (unless Spray Net consents to a longer period), or an attempt by the franchisee to make an invalid transfer in violation of the franchise agreement. These stipulations provide a framework for Spray Net to address serious breaches of the agreement, while also protecting the integrity and reputation of the Spray Net brand.