Under what circumstances are the parties NOT required to first attempt mediation for a Spray Net dispute?

According to Spray Net's 2025 Franchise Disclosure Document, there are specific instances where mediation is not required before commencing legal action. These exceptions primarily involve allegations of violations or threatened violations related to intellectual property, restrictive covenants, or payment obligations.

Specifically, Spray Net is not required to attempt mediation if the dispute concerns an allegation that a party has violated (or threatens to violate, or poses an imminent risk of violating) federally protected intellectual property rights in the Proprietary Marks, the System, or in any Confidential Information or other confidential information. Similarly, mediation is not required if the dispute involves any of the restrictive covenants contained in the Franchise Agreement or any of the franchisee's payment obligations under the agreement.

This means that Spray Net reserves the right to immediately pursue legal action to protect its brand, system, confidential information, and to enforce financial obligations and non-compete agreements without first going through mediation. This is a common practice in franchising, as franchisors often need to act quickly to protect their intellectual property and ensure franchisees meet their financial commitments. For a prospective franchisee, this highlights the importance of understanding and adhering to the franchise agreement's terms regarding intellectual property, restrictive covenants, and payment obligations to avoid immediate legal action.