Under what conditions might Spray Net permit a franchisee to appoint a Designated Manager?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
We require that you personally participate in the actual operation of your Franchised Business. You, if an individual, and certain persons affiliated with you, are required to attend, and successfully complete to our satisfaction, our training programs (described more fully in Item 11 above), and certain other training programs that we designate provided by third parties. All training must be completed prior to opening the Franchised Business.
Under certain conditions and with our prior approval, we may permit you to appoint a Designated Manager to handle day-to-day management of the Franchised Business on-site at the premises. Your Designated Manager must complete all components of our initial training, but we do not require that your Designated Manager immediately have an ownership interest in a corporate or partnership franchisee. If you engage a Designated Manager to manage the day-to-day operations of the Franchised Business, your Designated Manager must, by one (1) year after the Franchised Business opens for business, either (i) own ten percent (10%) of the equity interest in Franchisee and/or the Franchised Business or (ii) be granted a compensation package that grants the Designated Manager ten percent (10%) of the equity interest in Franchisee and/or the Franchised Business within a reasonable period of time. The Designated Manager will need to be approved by us and will need to sign the form of Confidentiality and Non-Compete Agreement in a form substantially similar to the form attached to your Franchise Agreement. Any Designated Manager, including any replacement manager, must attend and complete all required training before assuming any management responsibility in connection with your Franchised Business.
If you or your Designated Manager are not physically present on-site at a given customer job, then there must be at least one (1) SN Specialist present that can provide the kind of Approved Services at issue, including any Approved Services involving any Proprietary Products.
It is important to note that we are not your employer and that you will have the right to control all decisions related to recruiting, hiring or firing any personnel, including any managers. Please note that nothing in this Disclosure Document or any agreement you enter into with us will create any type of employer or joint employer relationship between (a) you and/or your personnel, and (b) us.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 55)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees are generally expected to personally participate in the operation of their franchise. However, Spray Net may, under certain conditions and with their prior approval, allow a franchisee to appoint a Designated Manager to handle the day-to-day management of the franchised business on-site.
The Designated Manager must complete all components of Spray Net's initial training program. While the Designated Manager is not initially required to have an ownership interest in the franchise, within one year after the franchise opens, the Designated Manager must either (i) own ten percent of the equity interest in the franchisee or the franchised business, or (ii) be granted a compensation package that grants them ten percent of the equity interest within a reasonable period. The Designated Manager will also need to be approved by Spray Net and sign a Confidentiality and Non-Compete Agreement.
It's important to note that even with a Designated Manager, if neither the franchisee nor the Designated Manager is physically present on-site at a customer job, there must be at least one SN Specialist present who can provide the approved services, especially those involving proprietary products. This ensures that the quality and standards of Spray Net are maintained even when the franchisee is not directly overseeing the work. Spray Net also clarifies that the franchisee retains control over all personnel decisions, including hiring and firing, and that no employer or joint-employer relationship is created between Spray Net and the franchisee's personnel.