Under what circumstances does Spray Net have the option to purchase a franchisee's business?

According to Spray Net's 2025 Franchise Disclosure Document, Spray Net has the option to purchase a franchisee's business under specific circumstances related to the expiration or termination of the Franchise Agreement. Upon either the expiration or termination of the agreement, Spray Net retains the option to purchase the franchisee's assets. The purchase price for these assets will be based on their net depreciated book value at the time of purchase.

This provision in the Franchise Agreement means that a franchisee may be required to sell their business assets back to Spray Net if the franchise term ends or if Spray Net terminates the agreement. The valuation method, net depreciated book value, is a standard accounting practice, but it may or may not reflect the fair market value of the assets. This could be a point of negotiation or consideration for a prospective franchisee.

It is important for potential Spray Net franchisees to understand the conditions under which the franchise agreement can be terminated, as this would trigger Spray Net's option to purchase the assets. Item 17 of the FDD provides details on termination conditions, including both curable and non-curable defaults. Understanding these conditions is crucial for managing the franchise and avoiding situations that could lead to termination and subsequent asset purchase by Spray Net.