What insurance coverages must a Spray Net franchisee obtain before attending the Initial Training Program?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees and acknowledges that Franchisee must complete and/or satisfy the following Training Pre-Conditions before Franchisor will approve Franchisee or any of its designated trainees to attend the components of the Initial Training Program that are provided at Franchisor's headquarters or other designated training facility:
- iii. demonstrate that Franchisee has obtained all required insurance coverages required by this Agreement and the Manuals;
Franchisee must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as Franchisor periodically specifies), unless Franchisor designates specific carriers from which Franchisee must purchase coverage (in which case Franchisee may only purchase from the designated carrier(s)). Franchisor may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances. All insurance policies Franchisee purchases must name Franchisor and any affiliate Franchisor designate as additional insureds, and provide for thirty (30) days' prior written notice to Franchisor of a policy's material modification or cancellation. The cost of Franchisee's premiums will depend on the insurance carrier's charges, terms of payment, and Franchisee's insurance and payment histories. Franchisee shall make timely delivery of certificates of all required insurance to Franchisor, each of which shall contain a statement by the insurer that the policy will not be cancelled or materially altered without at least thirty (30) days' prior written notice to Franchisor. The procurement and maintenance of such insurance shall not relieve Franchisee of any liability to Franchisor under any indemnity requirement of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a franchisee must demonstrate that they have obtained all required insurance coverages as mandated by the Franchise Agreement and the Manuals before being approved to attend the Initial Training Program at Spray Net's headquarters or designated training facility.
Spray Net requires franchisees to buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc., or according to similar criteria specified by Spray Net. However, Spray Net may designate specific carriers from which the franchisee must purchase coverage. Spray Net retains the right to periodically increase the required coverage amounts or mandate different or additional insurance coverage to reflect factors such as inflation, new risks, changes in law, higher damage awards, or changing economic conditions.
All insurance policies must name Spray Net and any designated affiliates as additional insureds and provide for thirty days' prior written notice to Spray Net in case of material modification or cancellation. Franchisees are responsible for the cost of their insurance premiums, which depend on the insurance carrier's charges, payment terms, and the franchisee's insurance and payment histories. Franchisees must provide timely certificates of all required insurance to Spray Net, including a statement from the insurer that the policy will not be canceled or materially altered without at least thirty days' prior written notice to Spray Net. Obtaining and maintaining insurance does not relieve the franchisee of any liability to Spray Net under any indemnity requirement of the Franchise Agreement.
Prospective Spray Net franchisees should carefully review the Franchise Agreement and Manuals to understand the specific insurance coverages required, approved carriers, and any potential changes to insurance requirements. It is also important to factor in the cost of insurance premiums when assessing the overall investment required to start and operate a Spray Net franchise.