Does Item 19 for Spray Net disclose the initial and ongoing cost of goods for the businesses?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Please note that nothing in this Item 19 discloses any of the (a) initial and ongoing cost of goods, labor, occupancy-related fees (i.e., rent and security deposit), taxes or any other of the initial and ongoing costs that the owners of the Businesses incurred in connection with the operation of each such Business over the applicable time periods described in this Item, or (b) the various fees and payments you will be required to pay to us or our Approved Supplier(s) under your Franchise Agreement.
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- Please note that each of the CN Businesses did not incur the kinds of initial start-up costs and investment during the time periods described in this Item 19 that you will likely incur in connection with establishing, building out and opening your Franchised Business, including, without
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 63–72)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Item 19 does not disclose the initial and ongoing cost of goods. Specifically, Item 19 omits details regarding initial and ongoing expenses, labor costs, occupancy fees like rent and security deposits, taxes, and other costs incurred by business owners. It also excludes fees and payments franchisees must make to Spray Net or its approved suppliers as stipulated in the Franchise Agreement.
Furthermore, the financial performance representation in Item 19 does not include the initial start-up costs and investments that a new Spray Net franchisee will likely face. These costs include utility and lease security deposits, leasehold improvements, furniture, fixtures, equipment, computer systems, signage, business permits, licenses, the initial franchise fee, and other pre-opening expenses. Additionally, legal fees, accounting fees, and administrative expenses incurred before, during, and after the grand opening are not included in the figures provided.
Given these omissions, a prospective Spray Net franchisee should carefully consider these costs and consult with financial advisors to develop realistic financial projections. It is essential to understand all potential expenses associated with establishing and operating a Spray Net franchise, as these are not fully detailed in Item 19. Contacting existing franchisees is also recommended to gain insights into their experiences with the system and the actual costs they have incurred.