Under what conditions can a Spray Net franchisee terminate the Franchise Agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise 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; (v) a final | ||
| judgment in the amount of $10,000 or more is entered against you | ||
| and not satisfied within 60 days (or longer period if we consent); | ||
| and (vi) | ||
| you attempt to make an invalid transfer in violation of | ||
| Section 13 of your Franchise Agreement. | ||
| Your Franchise Agreement may be terminated with notice but | ||
| without an opportunity to cure: (i) if you commit any fraud or | ||
| misrepresentation in the establishment or operation of the | ||
| Franchised Business; (ii) if you fail to attend and complete the | ||
| Initial Training Program; (iii) if you receive 3 or more notices to | ||
| cure the same or similar defaults within any 12-month period; (iv) | ||
| you violate the in-term restrictive covenant; (v) you misuse the | ||
| Proprietary | ||
| Marks or Confidential Information; (vi) you misuses | ||
| any proprietary software; (vii) you default under any other | ||
| agreement with us, our affiliate(s) or any Approved Supplier and | ||
| such default is not cured according to such agreement; (viii) you | ||
| default under your lease; (ix) you fail to open the Franchised | ||
| Business in the time required; (x) you abandon the Franchised | ||
| Business; (xi) you are convicted of a felony or other crime that | ||
| adversely affects the System; (xii) you take for your own personal | ||
| use the assets or property of the Franchised Business | ||
| for any | ||
| competitive or other commercial use; (xiii) there are insufficient | ||
| funds in your Payment | ||
| Account 3 or more times in any 12-month | ||
| period; (xiv) you commit repeated violates of any applicable | ||
| laws; or (xv) you on 3 or more occasions, fail to comply with the | ||
| standards and specifications found | ||
| in the Spray-Net | ||
| Operations | ||
| Manual | ||
| during any 18 month period, whether or not these failures | ||
| were timely cured. | ||
| i. |
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, a franchisee can face termination of their Franchise Agreement under several specific conditions. These conditions generally fall into categories of financial instability, failure to comply with brand standards, or actions detrimental to the Spray Net system.
Specifically, Spray Net can terminate the agreement if the franchisee makes a general assignment for the benefit of creditors, faces bankruptcy proceedings that are not dismissed within 30 days, has a receiver appointed for their assets, or has a final judgment of $10,000 or more entered against them that remains unsatisfied for 60 days. Attempting an invalid transfer of the franchise also constitutes grounds for termination.
Additionally, Spray Net can terminate the agreement with notice but without an opportunity to cure if the franchisee commits fraud or misrepresentation, fails to complete the initial training program, receives three or more notices to cure similar defaults within a 12-month period, violates restrictive covenants, misuses proprietary marks or confidential information, defaults under any agreement with Spray Net or its affiliates, defaults under their lease, fails to open the franchised business on time, abandons the business, is convicted of a felony, misuses business assets, has insufficient funds in their payment account multiple times, repeatedly violates laws, or fails to comply with operational standards in the Spray-Net Operations Manual on three or more occasions within an 18-month period.