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In Maryland, are all development fees and initial payments by Spray Net area developers deferred?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the multi-unit development agreement opens.

Source: Item 23 — RECEIPTS (FDD pages 75–219)

What This Means (2025 FDD)

According to Spray Net's 2025 Franchise Disclosure Document, in Maryland, the Maryland Securities Commissioner requires a financial assurance based on Spray Net's financial condition. Because of this, all development fees and initial payments by area developers are deferred. These fees are deferred until the first franchise opens under the multi-unit development agreement.

This deferral of fees is a significant benefit for prospective Spray Net area developers in Maryland. It reduces the upfront financial burden, allowing developers to allocate capital towards establishing their first franchise location. This arrangement helps to mitigate some of the initial financial risks associated with starting a new franchise business.

It is important for potential area developers to understand the conditions attached to this deferral. The fees are not waived entirely but are postponed until a specific milestone is reached—the opening of the first franchise under the development agreement. Developers should factor this timeline into their financial planning and ensure they have sufficient capital to cover these fees once they become due. They should also confirm with Spray Net what constitutes completion of pre-opening obligations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.