Under what conditions can the Spray Net franchise agreement be amended?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
SPRAY-NET INC. NEW YORK ADDENDUM TO THE FRANCHISE AGREEMENT
ALL FRANCHISE AGREEMENTS EXECUTED IN AND OPERATIVE WITHIN THE STATE OF NEW YORK ARE HEREBY AMENDED AS FOLLOWS:
SPRAY-NET INC. NORTH DAKOTA ADDENDUM TO THE DISCLOSURE DOCUMENT AND THE FRANCHISE AGREEMENT
In the State of North Dakota only, this Disclosure Document and the Franchise Agreement are amended as follows:
THE SECURITIES COMMISSIONER HAS HELD THE FOLLOWING TO BE UNFAIR, UNJUST OR INEQUITABLE TO NORTH DAKOTA FRANCHISEES (NDCC SECTION 51-19-09):
SPRAY-NET INC. MINNESOTA ADDENDUM TO THE FRANCHISE AGREEMENT
Section 7(M) of the Franchise Agreement is hereby amended by the addition of the following language:
M. Franchisor agrees to indemnify Franchisee from and against any losses, liabilities and damages for which Franchisee is held by a court of competent jurisdiction in any proceeding arising solely out of Franchisee's use of the mark "SPRAY-NET" and all other trademarks, service marks and associated marks and symbols utilized by Franchisee under this Agreement, provided such use is in accordance with and under the provisions of this Agreement.
Section 15 of the Franchise Agreement is hereby modified to add the following language:
The conditions under which this Agreement can be terminated or not renewed may be affected by Minnesota law, which provides Franchisee with certain termination and nonrenewal rights. Minnesota State Section 80C.14 Subd. 3-5, which require, except in certain specified cases, that Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Franchise Agreement.
The parties agree and acknowledge that Franchisor may change, improve, further develop, or otherwise modify the System from time to time as it deems appropriate in its discretion.
SPRAY-NET retains the right to adjust the frequency and amount of the Spray-Network software fees and tech royalty invoiced.
In the event of major upgrades or integration of third-party applications, additional software fees may apply.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to the 2025 Spray Net Franchise Disclosure Document, the franchise agreement can be amended under specific conditions, often requiring addendums to comply with state laws. For instance, franchise agreements executed and operative within New York are amended as outlined in the New York Addendum. Similarly, in North Dakota, the Disclosure Document and Franchise Agreement are amended as specified in their addendum due to the Securities Commissioner's findings regarding fairness and equity for North Dakota franchisees. These addendums ensure that the franchise agreement aligns with local regulations and provides specific protections or modifications for franchisees in those states.
In Minnesota, several sections of the Franchise Agreement are amended to comply with state law. Specifically, the sections regarding the obligation to execute a general release upon assignment or renewal are deleted. Additionally, Section 7(M) is amended to include a clause where Spray Net agrees to indemnify the franchisee against losses and liabilities arising from the franchisee's use of the "SPRAY-NET" mark, provided such use is in accordance with the agreement. Section 15 is also modified to include language about termination and non-renewal rights as per Minnesota law, requiring specific notice periods for termination and non-renewal.
Furthermore, Spray Net retains the right to modify the System, including the Proprietary Marks, from time to time as it deems appropriate. This includes changes, improvements, and further developments to the System. Franchisees acknowledge that while some information within the System might appear to be in the public domain, the System as a whole contains proprietary and confidential information that makes it unique. The franchisor may also adjust the frequency and amount of Spray-Network software fees and tech royalty invoiced and additional software fees may apply in the event of major upgrades or integration of third-party applications.
These amendments and modifications reflect Spray Net's commitment to adapting its franchise agreement to comply with varying state laws and to update its System and Proprietary Marks as needed. Prospective franchisees should carefully review all addendums and modifications applicable to their state and understand the conditions under which the franchise agreement can be altered. It is also important to note that the franchisor may make changes to the system and software fees, which could impact the franchisee's operational costs and obligations.