What conditions must Spray Net franchisees meet to add additional Qualified Single-Family Households or Additional Designated Territories?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
addition to our rights, you will still have to pay us the applicable attendance fees.
ITEM 12 TERRITORY
Grant of Territory
At the time of signing your Franchise Agreement we will designate your Designated Territory. The scope of your Designated Territory will vary from the scope and size of the operating territories of other franchisees in our System depending on local factors, market conditions, and whether or not, at the time of signing your Franchise Agreement, you increase the size of your Designated Territory from a Base Territory to a Base Territory that has been supplemented by the purchase of additional Qualified Single-Family Households and/or Additional Territories. A Base Territory, generally, will consist of a geographic area that includes approximately 75,000 qualified single family households with annual household income exceeding $60,000 (each a "Qualified Single-Family Household"). Subject to availability, our approval, and payment of additional Initial Franchise Fees identified in Item 5 of this Disclosure Document, you may add additional Qualified Single-Family Households and/or Additional Designated Territories. Each Additional Designated Territory will also include approximately 75,000 Qualified Single-Family Households. The number of single-family households with the required household income level will be determined in the aggregate and will be calculated based on raw data and without regard to demographics or age. Your local marketing expenditure will increase if you add Additional Designated Territories.
Relocation
We do not expect or intend to refuse your request for relocation unless it is clear that your proposed relocation site is not suitable for the operational base of a Franchised Business (including parking for all Approved Vehicle(s) that are equipped in accordance with System standards). If you can nolonger use the location due to circumstances beyond your control, including unreasonable lease terms or destruction of the premises, we will not unreasonably withhold our written consent to relocate.
Establishment of Additional Franchised Businesses
You do not have the right to establish additional Spray-Net Franchised Businesses.
Options and Rights of First Refusal to Acquire Additional Franchises
You are not granted any options, rights of first refusal, or similar rights to acquire additional franchises.
Territory Rights
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. For so long as you are in compliance with the terms of your Franchise Agreement, we will not establish any other Business utilizing the Proprietary Marks and System from a location within your Designated Territory.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees may add additional Qualified Single-Family Households and/or Additional Designated Territories to their base territory, subject to certain conditions. These conditions include the availability of additional territories, approval from Spray Net, and payment of additional initial franchise fees as outlined in Item 5 of the FDD. A base territory generally consists of a geographic area with approximately 75,000 qualified single-family households that have an annual household income exceeding $60,000. Each additional designated territory will also include approximately 75,000 qualified single-family households.
It's important to note that if a Spray Net franchisee adds additional designated territories, their local marketing expenditure will increase. The determination of qualified single-family households is based on raw data without regard to demographics or age. Furthermore, the FDD specifies that if a franchisee's business fails to generate gross sales that amount to at least 70% of the applicable minimum gross sales for a given period of operations, Spray Net may terminate the Franchise Agreement or reduce the number and/or size of the designated territories awarded under the governing Franchise Agreement.
If Spray Net elects to reduce the size of a franchisee's designated territories as an alternative to terminating the Franchise Agreement, they will provide an addendum detailing the size and boundaries of the reduced territory. The franchisee must execute this addendum within ten calendar days of receipt, or the Franchise Agreement will be terminated. Once the designated territory is effectively reduced, Spray Net may operate or license another to operate additional businesses anywhere outside the revised designated territory, without providing compensation for the forfeited portion of the territory.
Prospective Spray Net franchisees should carefully consider the costs and benefits of acquiring additional territories, including the increased marketing expenses and the risk of territory reduction due to underperformance. It is crucial to review Item 5 of the FDD to understand the additional initial franchise fees associated with expanding the territory. Additionally, franchisees should be aware of the minimum gross sales requirements and the potential consequences of failing to meet those targets.