Under the Spray Net agreement, what constitutes a default by the franchisee?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's failure to comply with any of Franchisor's other System standards and specifications in the operation of the Franchised Business as set forth in the Manuals; and (ii) fails to cure such breach or violation within thirty (30) days of the date Franchisee is provided with notice thereof by Franchisor.
- D. Loss of Designated Territory.
Notwithstanding the foregoing, if Franchisee is in default of this Agreement under Section 6(Z), Franchisor may, in its sole discretion and as an alternative to terminating this Agreement, elect to reduce the size of Franchisee's Designated Territory and own and operate, or license another to operate, additional Spray-Net businesses in the Designated Territory.
In the event Franchisor elects to reduce Franchisee's Designated Territory and/or terminate Franchisee's exclusive rights therein, Franchisor will provide Franchisee with written notice thereof.
Upon receipt of such notice, Franchisee will have ten (10) calendar days to execute an addendum to this Agreement detailing the revised boundaries of the Designated Territory and/or termination of exclusive rights therein.
If Franchisee does not execute this Addendum with the prescribed time period, then Franchisor may, at its option, immediate terminate this Agreement upon notice to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, a franchisee can be considered in default if they fail to comply with any of Spray Net's System standards and specifications in the operation of the Franchised Business as outlined in the manuals.
However, the franchisee has an opportunity to correct the issue. Spray Net must provide the franchisee with a notice of the breach, and the franchisee then has thirty (30) days from the date of the notice to fix or resolve the breach. If the franchisee fails to cure the breach within this 30-day period, it constitutes a default under the agreement.
If a franchisee is in default under Section 6(Z) of the agreement, Spray Net has the option to reduce the size of the franchisee's designated territory instead of terminating the agreement. In this case, Spray Net can operate or license others to operate additional Spray-Net businesses within the original territory. Spray Net will provide written notice to the franchisee if they elect to reduce the territory or terminate exclusive rights, and the franchisee has ten (10) calendar days to execute an addendum detailing the revised territory boundaries or termination of exclusive rights. If the franchisee fails to execute the addendum within the specified time, Spray Net can immediately terminate the agreement upon notice.