Under what conditions can Spray Net assume a Spray Net franchisee's lease if it is not a Home Office?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Lease. If Franchisee must enter into a lease for the location that is not a Home Office (the "Lease"), then Franchisor has the right to condition its approval of the proposed location on: (i) Franchisee and Franchisee's landlord executing a Collateral Assignment of Lease (attached as Exhibit C to this Agreement) granting Franchisor the right, but not the obligation, to assume the Lease upon: (i) Franchisee's default under the Lease; or (ii) the termination, transfer, or expiration of this Agreement. If Franchisor requires, the landlord under the Lease must expressly consent to the Collateral Assignment of Lease in writing.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, if a franchisee secures a location for their Spray Net business that is not a home office and therefore enters into a lease, Spray Net has the right to condition its approval of the location on certain factors.
Specifically, Spray Net can require that the franchisee and their landlord execute a Collateral Assignment of Lease. This agreement grants Spray Net the right, but not the obligation, to assume the lease under two conditions: first, if the franchisee defaults under the lease; or second, upon the termination, transfer, or expiration of the Franchise Agreement.
Furthermore, if Spray Net requires it, the landlord must expressly consent to the Collateral Assignment of Lease in writing. This ensures that all parties are aware of and agree to the terms under which Spray Net might assume the lease, providing a level of security for Spray Net and clarity for the landlord and franchisee.