Does the 'Gross Sales' definition for Spray Net include revenue from roofing services?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Sales (Production). In this Item 19, the term "Gross Sales" means all revenue generated by the CN Businesses and US Businesses, as applicable. This is also referred to as "Production." The term "Gross Sales" does not include (a) tips that customers paid to subcontractors or other personnel that are not remitted to the businesses or (b) sales tax that is collected directly from customers and paid to the appropriate taxing authority. "Gross Sales" amounts were generated from the offer, provision and sale of the Approved Products and Approved Services that our System franchisees here in the United States are authorized to offer except that none of the Gross Sales depicted herein were derived from roofing services, which are an optional service for our U.S. franchisees.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 63–72)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the definition of "Gross Sales" specifically excludes revenue derived from roofing services for U.S. franchisees. The FDD clarifies that while Spray Net franchisees are authorized to offer approved products and services, the gross sales figures presented do not include any revenue from roofing services. Roofing services are considered an optional service for franchisees in the United States.
This distinction is important for prospective franchisees to understand, as the financial performance representations provided in Item 19 are based on revenue streams that exclude roofing services. If a franchisee chooses to offer roofing services, the potential revenue from those services would be in addition to the gross sales figures presented in the FDD. This also means that the disclosed expenses and estimated expenses, such as royalties which are calculated as a percentage of gross sales, are based on the revenue generated without roofing services.
For a potential Spray Net franchisee, this means that the financial projections and performance data provided in the FDD may not fully represent their potential earnings if they plan to offer roofing services. It would be prudent for a prospective franchisee to discuss the potential revenue and associated costs of offering roofing services with existing franchisees or with Spray Net's management to gain a more comprehensive understanding of the potential financial impact. This will allow them to make a more informed decision about whether to include roofing services in their business model and to adjust their financial projections accordingly.