Does Spray Net receive revenue, rebates, commission, or other material consideration from franchisee purchases?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
evoked product, or with the revoked supplier.
Required Purchases and the Right to Derive Revenue
We estimate that the costs of your purchases from designated or approved suppliers, or according to our standards and specifications, may range from 90% to 95% of your total purchases in connection with the establishment of your Franchised Business, and between 35% and 45% of your ongoing expenses. We may designate sources for additional goods and services, we may receive revenue, rebates, commission or other material consideration from franchisee purchases.
We derive revenue as a result of required purchases or leases by you in accordance with specifications or standards required by us, or from suppliers approved by us. Except as noted above, there are no goods or services required in the operation of the outlet for which we or persons affiliated with us are the only approved suppliers. We currently receive rebates from suppliers amounting to approximately 2-3% of the purchase price our franchisees pay them. During the year ending December 31, 2024, we received $14,161.24 in rebates from these suppliers based on our franchisee's purchases from them.
In the year ending December 31, 2024, we derived $1,490,118 in revenue from Franchisee required purchases of digital marketing, initial marketing investment, and tech packages, or 52.03% of our total revenue of $2,863,931 per our most recent audited financials. These amounts were, in turn, paid directly to third-party suppliers of digital marketing and technology services. This amount does not include initial franchise fees or training fees.
In the year ending December 31, 2024, SN Distributio
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–36)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net does receive revenue, rebates, commissions, and other material consideration from franchisee purchases. The FDD states that Spray Net "may receive revenue, rebates, commission or other material consideration from franchisee purchases." In 2024, Spray Net received $14,161.24 in rebates from suppliers based on franchisee purchases. These rebates amounted to approximately 2-3% of the purchase price franchisees paid to the suppliers.
In addition to rebates, Spray Net also derives revenue from required franchisee purchases of digital marketing, initial marketing investment, and tech packages. In 2024, this revenue totaled $1,490,118, which represented 52.03% of Spray Net's total revenue of $2,863,931. This revenue is then paid directly to third-party suppliers of digital marketing and technology services. The revenue figure does not include initial franchise fees or training fees.
Furthermore, SN Distribution, which has owners with interests in Spray Net, generated $1,172,603 in revenue from the sale of paints and supplies to U.S. franchisees in 2024. Prospective franchisees should be aware that a significant portion of Spray Net's revenue is tied to franchisee purchases, and that purchasing from approved or designated suppliers is a requirement that can impact their operational costs.