After what period of operating a Spray Net franchise in compliance with the Franchise Agreement can a franchisee request the right to provide Ancillary Services?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
zed Painter with respect to the Authorized Painter Services that the individual intends to provide to customers of the Franchised Business.
- Once you have launched your Franchised Business and been operating in compliance with your Franchise Agreement for a period of one (1) year (or other period of time we agree to in a separate writing outside our standard franchise offering), you may request the right to provide one (1) or more of the Ancillary Services that we generally allow only our more experienced Business operators promote and perform on behalf of Clients. As of the Issuance Date, we may condition our approval of any request you make to provide a given Ancillary Service on the following (the "Current Ancillary Service Conditions" or "CASCs"):
- o Your operation of the Franchised Business over the one (1) year period disclosed above;
- o You demonstrating to us that the Franchised Business has otherwise been able to timely provide the Approved Services and progress Client Projects without Client complaint, or any reporting or other issue;
- o Acquiring any additional equipment and/or other operating supplies we designate as necessary to commence offering the Ancillary Service(s) at issue (total cost of this is approximately $20,000 to $30,000), as well as any additional or supplemental training we require and additional marketing expenditures for such Ancillary Service(s) (approximately $25,000), at your expense and prior to you offering or providing such Ancillary Service(s) via your Franchised Business in any manner;
- o Your Franchised Business generating Gross Sales necessary to meet and exceed your thencurrent Minimum Gross Sales under the Franchise Agreement by 15% for a period of at least three (3) consecutive months; and
- o You entering into a form of addendum to the Franchise Agreement memorializing your satisfaction of the above conditions, the specific Ancillary Service(s) you will be authorized to offer moving forward until such time that we advise you that (a) you are in material default of your Franchise Agreement and must therefore cease provision of the Ancillary Services until such default is cured, or (b) we are no longer authorizing the provision of the Authorized Services by your Franchised Business and the bases for this decision (with at least 30 days' prior notice, if and as possible), which may also contain a general release by you of us and our related parties.
We may modify the CASCS in the Manuals or otherwise in writing to our System franchisees, but we expect and intend to use the above conditions as the primary criteria for evaluating any request to provide such Ancillary Services.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 55–57)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a franchisee can request the right to provide Ancillary Services after operating their franchise in compliance with the Franchise Agreement for one year. However, this is not guaranteed, as Spray Net may agree to a different timeframe in writing outside of the standard franchise offering.
Even after the one-year mark, Spray Net stipulates certain conditions that must be met before a franchisee can offer Ancillary Services. These conditions include demonstrating the ability to provide Approved Services and progress client projects without complaints or issues. Additionally, the franchisee must acquire any necessary additional equipment and operating supplies, which could cost between $20,000 and $30,000, and complete any required supplemental training, with marketing expenditures of approximately $25,000, all at the franchisee's expense.
Furthermore, the Spray Net franchisee's business must exceed the current Minimum Gross Sales under the Franchise Agreement by 15% for at least three consecutive months. The franchisee must also enter into an addendum to the Franchise Agreement, which formalizes the satisfaction of these conditions and specifies the Ancillary Services the franchisee is authorized to offer. Spray Net retains the right to terminate the provision of Ancillary Services if the franchisee materially defaults on the Franchise Agreement or if Spray Net ceases to authorize these services, providing at least 30 days' notice when possible.
It is also worth noting that if a Spray Net franchisee does not request to provide Ancillary Services after two years of operation, Spray Net may require the franchisee to commence providing certain Ancillary Services and acquire the necessary equipment and training to do so. This demonstrates Spray Net's proactive approach to expanding service offerings within its franchise system.