How does Spray Net determine the scope of a franchisee's Designated Territory?
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.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the scope of a franchisee's Designated Territory is determined at the time of signing the Franchise Agreement and can vary depending on local factors and market conditions. A Base Territory generally includes a geographic area with approximately 75,000 qualified single-family households having an annual household income exceeding $60,000. The determination of qualified households is based on raw data without regard to demographics or age. Franchisees have the option to increase the size of their Designated Territory by purchasing additional Qualified Single-Family Households and/or Additional Territories, subject to Spray Net's approval and payment of additional Initial Franchise Fees as detailed in Item 5. Each Additional Designated Territory also includes approximately 75,000 Qualified Single-Family Households.
The FDD also states that Spray Net may reduce the size of a franchisee's Designated Territory if the Franchised Business fails to generate Gross Sales amounting to at least 70% of the applicable minimum Gross Sales for a given period of operations. In such cases, Spray Net will provide an addendum detailing the size and boundaries of the reduced territory, which the franchisee must execute within ten calendar days. If the franchisee's Designated Territory is reduced, they will not receive compensation for the forfeited portion, and Spray Net may then operate or license others to operate businesses outside the revised Designated Territory.
While franchisees may accept customers from outside their Designated Territory, they are restricted from soliciting or advertising within another franchisee's Designated Territory without express consent. Spray Net also reserves the right to offer Ancillary Services within a franchisee's Designated Territory themselves, through an affiliate, or through another franchisee, without granting the franchisee exclusivity or a right of first refusal related to these Ancillary Services. The FDD specifies that franchisees do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution.