What was the Spray Net brand fund liability for the year ending December 31, 2022?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
CT LIABILITY AND CONTRACT ASSETS
In compliance with the Financial Accounting Standards Board ("FASB") new accounting standards for revenue recognition ("Topic 606"), the Company records its non-refundable franchise fees, net of amounts earned based on allowable direct services, as deferred revenues, to be recognized over the life of the franchise agreement. The non-refunda
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the brand fund liability for the year ending December 31, 2022, was $80,280. The brand fund is maintained by Spray Net to collect and administer funds contributed for advertising and promotional programs for franchise units. These advertising fees are collected from franchisees based on a percentage of their gross revenues.
For a prospective Spray Net franchisee, this means that a portion of their gross revenue is allocated to this brand fund, which is then used for marketing and advertising efforts intended to benefit the entire franchise system. The brand fund liability represents the amount of money the fund owes or is obligated to spend as of the end of the fiscal year.
The FDD also indicates that the brand fund liability for the years ending December 31, 2024 and 2023 were both $0. It is important for potential franchisees to understand how these funds are managed and what specific advertising and promotional activities are supported by the brand fund. Reviewing the historical use of the brand fund and understanding the franchisor's strategy for marketing and advertising can help a franchisee assess the value and potential return on their contribution to the fund.