Under what conditions can Spray Net modify my Designated Territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
The failure of your Franchised Business fails to generate Gross Sales that amounts to at least 70% of the applicable minimum Gross Salesfor a given period of operations detailed in the Chart above will be grounds
for us to (a) terminate your Franchise Agreement or (b) otherwise reduce the number and/or size of your Designated Territory(ies) awarded under the governing Franchise Agreement.
If we elect to reduce the size of your Designated Territory(ies) as an alternative to terminating your Franchise Agreement, we will provide you an Addendum that details the size and boundaries of your reduced territory. You must execute this addendum within ten (10) calendar days of your receipt thereof, or your Franchise Agreement will be terminated. Once your Designated Territory is effectively reduced, we may own or operate, or license another to operate, additional Businesses anywhere outside your revised Designated Territory. If we reduce the size of your Designated Territory under the terms of Item 12, you do not have the right to nor will you receive compensation for any value of the forfeited portion of your Designated Territory. If the zip codes used to define your territory should be changed in the future by the U.S. Post Office or other government agency, we may require you to execute an addendum to your franchise agreement to redefine the physical territory using new zip code numbers. Redefinition of your territory to comply with the U.S. Post Office or other government agency's definition does not constitute a material change to the franchise agreement.
Except as stated above, we may not modify your Designated Territory for any reason other than by mutual agreement.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net can modify a franchisee's Designated Territory under specific conditions related to performance and external factors. If a Spray Net franchisee fails to achieve at least 70% of the minimum Gross Sales for a given operational period, as detailed in the FDD, Spray Net has the right to either terminate the Franchise Agreement or reduce the size of the Designated Territory.
If Spray Net chooses to reduce the territory instead of terminating the agreement, they will provide an addendum outlining the new territory boundaries. The franchisee must sign and return this addendum within ten calendar days, or the Franchise Agreement will be terminated. If the territory is reduced, Spray Net can then operate or license others to operate businesses outside the revised territory, and the franchisee will not receive any compensation for the forfeited portion of the territory.
Additionally, Spray Net may require the franchisee to execute an addendum to redefine the physical territory if zip codes are changed by the U.S. Post Office or another government agency. This redefinition to comply with governmental changes does not constitute a material change to the franchise agreement. Outside of these specific instances, Spray Net cannot modify the Designated Territory without mutual agreement from the franchisee. This means that a Spray Net franchisee's territory is primarily protected unless performance standards are not met or external factors necessitate a change, highlighting the importance of meeting sales targets and understanding the terms of the Franchise Agreement.