What is the timeframe for dismissing a bankruptcy petition filed against a Spray Net franchisee to avoid automatic termination?

The 2025 Spray Net Franchise Disclosure Document includes an addendum for Maryland franchisees that addresses the enforceability of termination clauses related to bankruptcy. Specifically, the addendum states that the standard franchise agreement allows for termination if a franchisee declares bankruptcy. However, this addendum notes that such a provision may not be enforceable under federal bankruptcy law.

This statement suggests that while Spray Net's standard agreement might include a clause allowing for termination upon a franchisee's bankruptcy, federal law could override this provision, potentially preventing automatic termination. This is because federal bankruptcy laws are designed to give individuals and businesses a chance to reorganize and continue operations, which could conflict with a franchisor's right to terminate the agreement solely based on the bankruptcy filing.

Because the excerpt only states that the termination provision "may not be enforceable," prospective Spray Net franchisees should consult with a legal expert to fully understand their rights and obligations under both the franchise agreement and federal bankruptcy law. They should also inquire with Spray Net about specific instances where such clauses have been enforced or waived in the past.