After the termination of a Spray Net franchise agreement, what activities are franchisees prohibited from engaging in with a Competing Business within a 50-mile radius of their Designated Territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- For a period of two (2) years after the expiration and nonrenewal, transfer or termination of this Agreement, regardless of the cause, neither Franchisee, its principals, owners and guarantors, nor any member of the immediate family of Franchisee, its principals, owners or guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation:
- a. Own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with any other Competing Business:
- i. within the Designated Territory;
- ii. within a fifty (50) mile radius of the Designated Territory;
- iii. within a fifty (50) mile radius of any Spray-Net franchised business
that is open and operating as of the date this Agreement expires and/or is terminated; or
iv. within a fifty (50) mile radius of any other designated territory that has been granted by Franchisor or its affiliates in connection with a Spray-Net franchised business as of the date this Agreement expires and/or is terminated, regardless of whether a Franchised Business is open and operating in that designated territory; or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, for two years after the termination of the franchise agreement, franchisees and their related parties are restricted from involvement with any business that competes with Spray Net. This includes a 50-mile radius of the Designated Territory.
Specifically, within that 50-mile radius, the franchisee cannot own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with any other Competing Business. This encompasses a broad range of activities, essentially preventing the franchisee from directly or indirectly supporting or participating in a competing venture.
This restriction also extends to a 50-mile radius of any Spray-Net franchised business that is open and operating or any other designated territory that has been granted by Spray Net or its affiliates. This broadens the scope of the non-compete, preventing former franchisees from exploiting knowledge or relationships gained during their time with Spray Net in areas where the brand has a presence, even if the former franchisee's specific territory is different.
These non-compete terms are common in franchising to protect the brand and other franchisees. Prospective Spray Net franchisees should carefully consider the implications of these restrictions, especially if they plan to remain in the same geographic area after leaving the Spray Net system. It is important to understand the definition of a "Competing Business" as defined in the franchise agreement to fully grasp the scope of these limitations.