Under the Spray Net agreement, what constitutes a default due to late payments?

Based on the 2025 Spray Net Franchise Disclosure Document, failure to pay invoices can result in restricted access to the Spray-Network. The software fees for using the Spray-Network include reoccurring monthly fixed fees, as outlined in the franchise agreement, and a weekly Tech fee royalty amount due, which accounts for 0.0025 of the total job value produced the previous week. Spray-Net retains the right to adjust the frequency and amount of the Spray-Network software fees and tech royalty invoiced. Additional software fees may apply in the event of major upgrades or integration of third-party applications.

If a Spray Net franchisee fails to pay these invoices, Spray-Net retains the right to restrict access to the Spray-Network. This can significantly impact the franchisee's ability to operate, as the Spray-Network appears to be a crucial software platform for managing the business. The FDD does not specify a grace period or a specific number of days late that would trigger this restriction, but rather states that non-payment can lead to restricted access.

It is important for prospective Spray Net franchisees to understand the payment terms and ensure they have sufficient cash flow to cover these fees. Franchisees should also clarify with Spray Net the exact procedures and timelines related to late payments and potential restrictions on access to the Spray-Network. Understanding these details can help franchisees avoid disruptions to their business operations and maintain a good relationship with the franchisor.