What is the Spray Net revenue threshold for the fifth year of operation with 1 designated territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
| Minimum Gross Sales | |||||
|---|---|---|---|---|---|
| Period(s) | 1 Designated Territory | 2 Designated Territories | 3 Designated Territories | ||
| First Year of Operation | $300,000 | $350,000 | $375,000 | ||
| Second Year of Operation | $431,250 | $475,000 | $575,000 | ||
| Third Year of Operation | $506,250 | $600,000 | $725,000 | ||
| Fourth Year of Operation | $531,563 | $700,000 | $800,000 | ||
| Fifth Year of Operation | $558,141 | $735,000 | $860,000 | ||
| Sixth | $586,048 | $771,750 | $924,500 | ||
| Year of Operation | |||||
| Seventh | $615,350 | $810,338 | $993,838 | ||
| Year of Operation | |||||
| Eighth | $646,118 | $850,854 | $1,068,375 | ||
| Year of Operation | |||||
| Ninth | $678,423 | $893,397 | $1,148,503 | ||
| Year of Operation | |||||
| Tenth | $712,345 | $938,067 | $1,234,641 | ||
| Year of Operation |
[Chunk 6 | Item 6: Other Fees] (chunk_id: 83206341-1a09-4235-8ef4-79bb9a360294) [Item 6: > **ITEM 6 OTHER FEES]
EXPLANTORY NOTES TO ITEM 6 CHART
- Gross Sales. "Gross Sales" shall include all revenue from the sale of all products and performance of services from the Franchised Business, whether in the form of cash, credit, barter or rebates, and regardless of collection in the case of credit, and income of every kind and nature related to the Franchised Business, including any consideration that Franchisee receives from third-party vendors/suppliers. "Gross Sales" from customers shall not include monies that are collected and submitted by Franchisee for transmittal to the appropriate taxing authority. In computing the Gross Sales, Franchisee shall be permitted to deduct the amount of cash refunds to, and coupons used by customers at the time the balance is fully paid to Franchisee, if such amounts have been included in Gross Sales of the Franchised Business. Your Minimum Gross Sales, which are based on the number of Designated Territories you purchase and the length of time your Franchised Business has been in operation, are below. Your Royalty Fee is subject to a minimum equal to 7% of the applicable Minimum Gross Sales below.
Source: Item 6 — > **ITEM 6 OTHER FEES (FDD pages 15–29)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a franchisee operating with one designated territory is expected to reach a minimum gross sales threshold of $558,141 during their fifth year of operation. This minimum gross sales figure is relevant because the franchisee's royalty fee is subject to a minimum equal to 7% of this amount. Therefore, even if a franchisee's gross sales are lower than $558,141, they will still need to pay a royalty fee calculated from that amount.
Spray Net defines "Gross Sales" as all revenue from the sale of products and services related to the franchised business. This includes cash, credit, barter, rebates, and any income related to the business, including consideration from third-party vendors or suppliers. The only exclusions from gross sales are monies collected for transmittal to taxing authorities and the amount of cash refunds or coupons used by customers at the time of payment.
This minimum gross sales threshold increases over time. For example, the minimum gross sales for the first year of operation with one designated territory is $300,000, increasing to $431,250 in the second year, $506,250 in the third year, and $531,563 in the fourth year. The minimum gross sales continue to increase each year, reaching $712,345 by the tenth year of operation. This escalating threshold suggests that Spray Net expects its franchisees to grow their revenue substantially over time.