What is the exception to the non-refundable nature of the initial franchise fee for a Spray Net franchise?

According to the 2025 Spray Net Franchise Disclosure Document, the initial franchise fee and other initial payments are deferred, not non-refundable, under certain conditions. Specifically, if the franchisor's financial condition necessitates it, state securities commissioners (such as in Maryland, North Dakota, and Virginia) may require a financial assurance. In these instances, all initial fees and payments owed by franchisees are deferred until Spray Net completes its pre-opening obligations under the franchise agreement. This deferral also applies to development fees and initial payments by area developers until the first franchise under the multi-unit development agreement opens.

This condition provides a level of financial protection for new Spray Net franchisees. Instead of paying the initial franchise fee upfront, which is typically non-refundable, the franchisee only pays after Spray Net has fulfilled its pre-opening obligations. This ensures that Spray Net is committed to providing the support and services necessary to get the franchise operational before receiving the franchise fee.

For a prospective Spray Net franchisee, this means reduced financial risk during the initial stages of the franchise. It is important to note that this deferral is contingent on the financial condition of Spray Net and the requirements of state securities commissioners. Franchisees should confirm with Spray Net and the relevant state authorities whether this deferral applies to their specific situation and understand what constitutes the completion of pre-opening obligations.