Under what conditions can Spray Net terminate the franchise agreement with written notice but without an opportunity to cure?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Franchisor elects to reduce Franchisee's Designated Territory and/or terminate Franchisee's exclusive rights therein, Franchisor will provide Franchisee with written notice thereof.
Upon receipt of such notice, Franchisee will have ten (10) calendar days to execute an addendum to this Agreement detailing the revised boundaries of the Designated Territory and/or termination of exclusive rights therein.
If Franchisee does not execute this Addendum with the prescribed time period, then Franchisor may, at its option, immediate terminate this Agreement upon notice to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, if a franchisee fails to execute an addendum detailing revised territory boundaries or the termination of exclusive rights within ten calendar days of receiving written notice from Spray Net, Spray Net has the option to immediately terminate the agreement upon notice to the franchisee. This means that Spray Net can reduce the size of a franchisee's territory or terminate their exclusive rights if the franchisee defaults under Section 6(Z) of the agreement.
In such cases, Spray Net will provide written notice, and the franchisee has only ten calendar days to sign an addendum reflecting these changes. If the franchisee fails to sign the addendum within this short timeframe, Spray Net can immediately terminate the franchise agreement. This is a significant deviation from the standard practice of providing a cure period for breaches of contract, as the franchisee has no opportunity to rectify the situation other than agreeing to Spray Net's terms regarding the territory.
This clause presents a notable risk for prospective Spray Net franchisees. It is crucial to understand the conditions under Section 6(Z) that could trigger a reduction in territory or termination of exclusive rights. A franchisee should carefully consider their ability to comply with these terms and the potential consequences of failing to do so, as it could lead to immediate termination without an opportunity to correct the issue. Prospective franchisees should seek legal counsel to fully understand the implications of this clause and negotiate for more reasonable terms if possible.