What is the 'Local Advertising Requirement' for a Spray Net franchise?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
ion Fee, and Brand Fund Contribution)**. You must spend a minimum annual amount on local advertising for your Franchised Business ("Local Advertising Requirement"). You are required to spend 75% of your Local Advertising Requirement on digital marketing ("Digital Marketing Spend" or "DMS") on a monthly basis. We are currently the only Approved Supplier for digital marketing, and we may either perform the digital marketing services or contract with another supplier to provide them. Whether we provide the digital marketing services or engage another supplier to provide them, you are required to pay us our then-current fee for managing such digital marketing services (the
"Production Fee"), which covers the administrative cost of placing the digital advertising and is subject to a cap or maximum amount. You must also pay us a Brand Fund Contribution each month. The Local Advertising Requirement, Digital Marketing Spend, Production Fee, and Brand Fund Contribution are reflected in the charts below, based on the number of Designated Territories you purchase.
| Period | Annual Local Advertising Requirement | Annual Digital Marketing Spend (spent monthly) | Annual Production Fee Cap (collected monthly) | Annual Brand Fund Contribution (collected monthly) | |
|---|---|---|---|---|---|
| First Year of Operation | $40,000 | $30,000 | $6,300 | $9,000 | |
| Second Year of Operation | $46,000 | $34,500 | $9,000 | $12,938 | |
| Third Year of Operation | $54,000 | $40,500 | $9,000 | $15,188 | |
| Fourth Year of Operation | $56,700 | $42,525 | $9,000 | $15,947 | |
| Fifth | $59,535 | $44,651 | $9,000 | $16,744 | |
| Year of Operation | |||||
| Sixth | $62,511.75 | $46,884 | $9,000 | $17,581 | |
| Year of Operation | |||||
| Seventh | $65,637.34 | $49,228 | $9,000 | $18,461 | |
| Year of Operation | |||||
| Eighth | $68,919.20 | $51,689 | $9,000 | $19,384 | |
| Year of Operation | |||||
| Ninth | $72,365.16 | $54,274 | $9,000 | $20,353 | |
| Year of Operation | |||||
| Tenth | $75,983.42 | $56,988 | $9,000 | $21,370 | |
| Year of Operation |
| Period | Annual Local Advertising Requirement | Annual Digital Marketing Spend (spent monthly) | Annual Production Fee Cap (collected monthly) | Annual Brand Fund Contribution (collected monthly) |
|---|---|---|---|---|
| First Year of Operation | $40,000 | $30,000 | $8,400 | $10,500 |
| Second Year of Operation | $60,000 | $45,000 | $12,000 | $14,250 |
| Third Year of Operation | $72,000 | $54,000 | $12,000 | $18,000 |
| Fourth Year of Operation | $75,600 | $56,700 | $12,000 | $21,000 |
| Fifth | $79,380 | $59,535 | $12,000 | $22,050 |
| Year of Operation | ||||
| Sixth | $83,349 | $62,512 | $12,000 | $23,153 |
| Year of Operation | ||||
| Seventh | $87,516.45 | $65,637 | $12,000 | $24,310 |
| Year of Operation |
| Eighth Year of Operation | $91,892.27 | $68,919 | $12,000 | $25,526 |
|---|---|---|---|---|
| Ninth | $96,486.89 | $72,365 | $12,000 | $26,802 |
| Year of Operation | ||||
| Tenth | $101,311.23 | $75,983 | $12,000 | $28,142 |
| Year of Operation |
| Period | Annual Local Advertising Requirement | Annual Digital Marketing Spend (spent monthly) | Annual Production Fee Cap (collected monthly) | Annual Brand Fund Contribution (collected monthly) | ||
|---|---|---|---|---|---|---|
| First Year of Operation | $40,000 | $30,000 | $9,660 | $11,250 | ||
| Second Year of Operation | $64,000 | $48,000 | $13,800 | $17,250 | ||
| Third Year of Operation | $80,000 | $60,000 | $13,800 | $21,750 | ||
| Fourth Year of Operation | $96,000 | $72,000 | $13,800 | $24,000 | ||
| Fifth | $100,800 | $75,600 | $13,800 | $25,800 | ||
| Year of Operation | ||||||
| Sixth | $105,840 | $79,380 | $13,800 | $27,735 | ||
| Year of Operation | ||||||
| Seventh | $111,132 | $83,349 | $13,800 | $29,815 | ||
| Year of Operation | ||||||
| Eighth | $116,688.60 | $87,516 | $13,800 | $32,051 | ||
| Year of Operation | ||||||
| Ninth | $122,523.03 | $91,892 | $13,800 | $34,455 | ||
| Year of Operation | ||||||
| Tenth | $128,649.18 | $96,487 | $13,800 | $37,039 | ||
| Year of Operation |
- Initial Marketing Investment.
Source: Item 6 — > **ITEM 6 OTHER FEES (FDD pages 15–29)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees must spend a minimum annual amount on local advertising for their franchised business, referred to as the "Local Advertising Requirement." At least 75% of this requirement must be spent on digital marketing, termed "Digital Marketing Spend," on a monthly basis. Spray Net is currently the only approved supplier for digital marketing services, and franchisees are required to pay Spray Net's then-current fee for managing these services, known as the "Production Fee," which covers the administrative cost of placing the digital advertising and is subject to a cap or maximum amount. Franchisees must also contribute to the Brand Fund each month. The specific amounts for the Local Advertising Requirement, Digital Marketing Spend, Production Fee, and Brand Fund Contribution vary based on the number of Designated Territories purchased.
The FDD provides multiple tables outlining these fees for different Designated Territories. For example, one table shows that for the first year of operation, the Annual Local Advertising Requirement is $40,000, with $30,000 allocated for the Annual Digital Marketing Spend, a Production Fee Cap of $6,300, and a Brand Fund Contribution of $9,000. These amounts increase in subsequent years. By the tenth year, the Annual Local Advertising Requirement rises to $75,983.42, with $56,988 for Digital Marketing Spend, a Production Fee Cap of $9,000, and a Brand Fund Contribution of $21,370.
Another table shows different amounts based on the Designated Territories. In this table, the Annual Local Advertising Requirement is also $40,000 for the first year, with $30,000 for Digital Marketing Spend, but the Production Fee Cap is $8,400, and the Brand Fund Contribution is $10,500. By the seventh year, the Annual Local Advertising Requirement is $87,516.45, with $65,637 for Digital Marketing Spend, a Production Fee Cap of $12,000, and a Brand Fund Contribution of $24,310. A third table shows that for the first year of operation, the Annual Local Advertising Requirement is $40,000, with $30,000 allocated for the Annual Digital Marketing Spend, a Production Fee Cap of $9,660, and a Brand Fund Contribution of $11,250. By the tenth year, the Annual Local Advertising Requirement rises to $128,649.18, with $96,487 for Digital Marketing Spend, a Production Fee Cap of $13,800, and a Brand Fund Contribution of $37,039.
Prospective franchisees should carefully review the tables in Item 6 of the Spray Net FDD to understand the specific Local Advertising Requirement, Digital Marketing Spend, Production Fee Cap, and Brand Fund Contribution applicable to their Designated Territories and the number of years they have been in operation. Given that Spray Net is the only approved supplier for digital marketing, franchisees should also inquire about the details of these services and the associated Production Fee.