Under what circumstances can Spray Net terminate the Franchise Agreement with cause?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise Agreement for any reasons allowable under the law. | | e. | Termination by franchisor without cause | Not Applicable | Not Applicable | | f. | Termination by franchisor with cause | Section 15 | We may terminate your Franchise Agreement with cause as described in (g)-(h) of this Item 17 Chart. | | g. | "Cause" defined – curative defaults | Section 15(B) Section 15(C) | Your Franchise Agreement may be terminated based on the following defaults after the applicable cure periods: (i) if you fail to cure any of the following defaults after 10 days' notice: (a) failure to provide the Approved Services using only the Proprietary Products and other products we approve or failure to offer any Approved Service or Approved Product we require; (b) the provision of any Ancillary Service without proper approval or other authority from us; (c) any purchase of any non-approved item or service; (d) failure to purchase any item from the appropriate Approved Supplier(s), and (e) fail to cure any monetary default; (ii) you fail to provide us with access to the Computer System and fail to remedy this default within 48 hours; (iii) you fail, after 15 days' notice, to comply with any applicable law; (iv) you fail, after 10 days' notice, to obtain any applicable license, certificate, permits, or approval; and (v) you fail to meet the Minimum Productivity Levels. Except as provided above and those defaults listed in (h) of this Item 17 Chart, you must cure all other defaults and violations of any provision of your Franchise Agreement or any other agreement with us or our affiliates within 30 days of being provided with notice of your default(s). | | h. | "Cause" defined – non-curative defaults | Section 15(A) | Your Franchise Agreement may be terminated automatically and without notice from us if: (i) you become insolvent or make a |
| Provision | Franchise | Summary |
|---|---|---|
| Agreement | ||
| Section 15(B) | general assignment for the benefit of creditors; (ii) a bankruptcy | |
| petition if filed by or against you and not dismissed within 30 | ||
| days; (iii) a bill in equity or appointment of receivership is filed | ||
| in connection with you or the Franchised Business; (iv) a receiver | ||
| or custodian of your assets of property is appointed; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–62)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net can terminate the Franchise Agreement with cause under several circumstances, which are divided into defaults that can be cured and those that cannot.
For defaults that can be cured, Spray Net may terminate the agreement if a franchisee fails to correct the following within the specified cure periods: failing to use only approved products or offer required services/products after 10 days' notice; providing unapproved ancillary services; purchasing non-approved items or services; failing to purchase items from approved suppliers; failing to remedy a denial of access to the Computer System within 48 hours; failing to comply with applicable laws after 15 days' notice; failing to obtain necessary licenses, certificates, permits, or approvals after 10 days' notice; failing to meet Minimum Productivity Levels; and failing to cure any monetary default after 10 days' notice. Franchisees have 30 days to cure other violations of the Franchise Agreement or related agreements, except for the items listed above and those in the non-curative defaults section.
Spray Net can terminate the Franchise Agreement without notice or an opportunity to cure if the franchisee: becomes insolvent or makes an assignment for the benefit of creditors; has a bankruptcy petition filed by or against them that is not dismissed within 30 days; has a bill in equity or receivership filed; has a receiver or custodian appointed for their assets; has a final judgment of $10,000 or more entered against them that is not satisfied within 60 days (unless Spray Net consents to a longer period); or attempts an invalid transfer of the franchise.
Additionally, Spray Net can terminate with notice but without an opportunity to cure if the franchisee: commits fraud or misrepresentation in the business; fails to complete the Initial Training Program; receives three or more notices to cure the same or similar defaults within 12 months; violates the in-term restrictive covenant; misuses proprietary marks, confidential information, or proprietary software; defaults under any agreement with Spray Net, its affiliates, or approved suppliers without curing the default; defaults under their lease; fails to open the Franchised Business on time; abandons the Franchised Business; is convicted of a felony that adversely affects the System; takes assets of the Franchised Business for personal or competitive use; has insufficient funds in their Payment Account three or more times in any 12-month period; commits repeated violations of applicable laws; or fails to comply with standards in the Spray-Net Operations Manual on three or more occasions during any 18-month period, regardless of whether these failures were cured.