Is participation in the Spray Net Referral Program mandatory for franchisees?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
- AA. Referral Program Participation. Franchisor may establish a referral program that governs the referrals of customers between System franchisees, including Franchisee (the "Referral Program"). Franchisee must participate in Franchisor's Referral Program and perform all then-current obligations set forth in the Referral Program, which Franchisor may, in its sole discretion, change from time to time.
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- Current Referral Program Terms. As of the Effective Date of this Agreement, Franchisor has established the Referral Program and Franchisee must participate and perform the following, which may be subject to change in Franchisor's sole discretion:
- a. Referral Payment and Discount. When a customer is referred to Franchisee through the Referral Program and such customer engages and pays Franchise for goods and services, Franchisee shall pay a referral fee in the form of a prepaid Visa Gift Card to the person who referred such customer (the "Referral Payment") and apply a discount on goods and services purchased from Franchisee by the referred customer ("Referral Discount"). Franchisor may designate the form of payment, vendor, and process for ordering and sending the Referral Payment, and Franchisor may, in its sole discretion, issue the Referral Payment and collect reimbursement from Franchisee. The Referral Payment amount shall be based on the amount the referred customer actually pays to Franchisee and the Referral Discount shall be based on the amount the referred customer agrees to pay Franchisee (both the "Job Amount") according to the table below:
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Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, participation in the Referral Program is mandatory for franchisees. The FDD states that Spray Net may establish a referral program, and franchisees must participate in it.
As part of this program, franchisees are obligated to provide a referral fee in the form of a prepaid Visa Gift Card and apply a discount on goods and services to customers referred to them through the program. The franchisor has the right to designate the payment method, vendor, and process for sending the referral payment. Spray Net also has the option to issue the referral payment and then collect reimbursement from the franchisee.
The amount of the referral payment is based on what the referred customer actually pays the franchisee, and the referral discount is based on the amount the referred customer agrees to pay. These amounts are tied to the 'Job Amount,' as determined by Spray Net. Because participation in the referral program is mandatory, this impacts the franchisee's revenue and expenses.