Is Spray Net obligated to spend all advertising fund contributions during the fiscal year they are made?

According to Spray Net's 2025 Franchise Disclosure Document, Spray Net is not obligated to spend all advertising fund contributions during the fiscal year in which they are made. While Spray Net may choose to spend all contributions within that fiscal year, it has no duty to do so. Any excess amounts remaining in the fund at the end of the fiscal year will roll over into the fund for the following fiscal year.

This policy means that Spray Net has the discretion to manage the advertising fund as it sees fit, which could benefit franchisees through strategic long-term planning and resource allocation. However, it also carries the risk that contributions may not be used immediately or in the franchisee's specific market. Franchisees should be aware that they may not see an immediate return on their advertising fund contributions.

Spray Net retains the right to suspend or terminate the fund at any time. An unaudited accounting of the fund's operation will be prepared annually and available to franchisees upon written request, at least 120 days after Spray Net's fiscal year end. Franchisees should stay informed about the fund's activities and performance by requesting and reviewing these accountings to understand how their contributions are being used and to assess the effectiveness of the advertising and marketing programs.

Spray Net also states that the advertising fund is not a trust, and Spray Net has no fiduciary duty to franchisees in administering the fund. This means that Spray Net is not legally obligated to act in the franchisees' best interests when managing the fund. Franchisees should consider this when evaluating the franchise opportunity and understand that the franchisor has significant control over the fund's use.