In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Spray-Net franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Spray-Net franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Spray-Net outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Spray-Net franchise opportunity

Section V – Presentation and analysis of Spray-Net’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average gross booking, gross sales (production), gross margin, and net promoter score for the 5 U.S. disclosed businesses open for 6 to 18 months as of December 31, 2023, and the 2 U.S. disclosed businesses open for 18 to 24 months as of December 31, 2023

• 2023 average gross booking, gross sales (production), gross margin, and net promoter score for the 7 single-unit Canadian businesses open for 24 months as of December 31, 2023, and the 8 multi-unit Canadian businesses open for 24 months as of December 31, 2023

• 2023 average, median, high, and low job size for the 26 U.S. businesses that operated during the 2023 calendar year and performed at least five exterior jobs during the 2023 calendar year; 17 U.S. businesses that operated during the 2023 calendar year and performed at least five interior jobs during the 2023 calendar year; 30 Canadian businesses that operated during the 2023 calendar year and performed at least five exterior jobs during the 2023 calendar year; and 22 Canadian  businesses that operated during the 2023 calendar year and performed at least five interior jobs during the 2023 calendar year

• 2023 average gross sales (production), disclosed expenses, estimated expenses, and estimated EBITDA derived from the 15 Canadian businesses and 7 US businesses that reported certain data to Spray-Net between January 1, 2023 and December 31, 2023

Section VI – Key ratios, comparables, computations, and analyses for the Spray-Net franchise opportunity (exclusive content for Platinum subscribers)

Section I – Spray-Net Franchise Costs

• Initial Franchise Fee:  $54,500
• Initial Training Fee:  $15,000
• Initial Marketing Investment:  $20,000 to $30,000
• Bookkeeping Service (Setup and First 3 Months):  $1,775
• Business Management Software (First 3 Months):  $1,050
• Equipment:  $30,000 to $40,000
• Pick-Up/Approved Vehicle Package:  $3,000 to $7,500
• Permits, Deposits, Business Licenses, Legal and Accounting Fees:  $2,000 to $3,500
• Travel and Living Expenses During Initial Training:  $2,000 to $4,000
• Insurance:  $3,500 to $6,000
• Start-Up Package:  $4,000 to $6,000
• Computer Hardware:  $1,000 to $2,000
• Approved Vehicle – Lease Payments for 3 Months:  $0 to $2,500
• Home Show Booth:  $6,000 to $8,000
• Mobile Services Unit:  $2,000 to $15,000
• Additional Funds for First 3 Months:  $30,000 to $40,000
• Total Estimated Spray-Net Franchise Costs:  $175,825 to $236,825

Section II – Spray-Net’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $54,500

• Royalty:  7% of (i) your Gross Sales generated by your Franchised Business or (ii) your Minimum Gross Sales, whichever is greater

• Local Advertising Requirement:  a fixed amount based on the number of Designated Territories you have purchased and the length of time your Franchised Business has been in operation

• Digital Marketing Spend:  at least 75% of your Local Advertising Requirement

• Contribution to Brand Development Fund (the “Fund”):  3% of annual Gross Sales under $1 million; 2% of annual Gross Sales over $1 million; subject to a minimum amount. The minimum amount is based on the number of Designated Territories you have purchased and the length of time your Franchised Business has been in operation.

Section III – Number of Franchised and Company-Owned Spray-Net Outlets

Franchised

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  11
• Net Change:  +10

2022

• Outlets at the Start of the Year:  11
• Outlets at the End of the Year:  26
• Net Change:  +15

2023

• Outlets at the Start of the Year:  26
• Outlets at the End of the Year:  26
• Net Change:  0

Company-Owned

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2023

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – News Updates on the Spray-Net Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Spray-Net Franchise (Item 19, 2024 FDD)

• Spray-Net’s affiliate, SN Canada, has offered and sold franchises for the right to own and operate Businesses that are (i) operated in a substantially similar manner to the Franchised Business being offered in the current Disclosure Document utilizing the same or substantially similar Proprietary Marks and System that Spray-Net licenses to you under your Franchise Agreement, and (ii) provided initial and ongoing training and other assistance that is substantially similar to the training and support you will be entitled to receive under your Franchise Agreement in connection with your Franchised Business (each, a “CN Business”).

• In light of the foregoing, there is a reasonable basis to include certain historical financial information regarding the CN Businesses that (i) were actively owned and operated throughout the relevant measurement periods and (ii) meet certain other System criteria found in the Disclosure Document.

• Whenever “Gross Sales” and “Gross Bookings” are disclosed for CN Businesses, they are disclosed in Canadian Dollars because: (i) that is how the sales were reported to Spray-Net by its affiliate or its affiliate’s franchisees; and (ii) the currency exchange rate between United States currency (the U.S. Dollar or “USD”) and Canadian currency (the Canadian Dollar or “CAD”) is constantly in flux such that the rate as of the Issuance Date of the Disclosure Document may not be the same rate at the time you are disclosed with the Disclosure Document and/or purchase franchise rights from Spray-Net.

Part 1 – CN Businesses and US Disclosed Businesses Business Performance During 2023 Calendar Year

• Spray-Net discloses certain historical performance information regarding the 15 CN Businesses that were open and operating for a period of one year as of December 31, 2023. Spray-Net has excluded seven CN Businesses that did not operate for a full year as of December 31, 2023. Spray-Net has also excluded two CN Businesses that did not report their
  complete financials to it.

• Spray-Net discloses certain historical financial performance information regarding the remaining seven U.S. franchisees that operated for the entire 2023 Calendar Year and reported complete financial data to it (the “US Disclosed Businesses”).

US Disclosed Businesses Open for 6 to 18 Months as of December 31, 2023

• Number of Businesses:  5
• Average Gross Booking USD:  $337,570
• Average Gross Sales (Production) USD:  $280,316
• Average Gross Margin:  54.6%
• Average Net Promoter Score:  100

US Disclosed Businesses Open for 18 to 24 Months as of December 31, 2023

• Number of Businesses:  2
• Average Gross Booking USD:  $727,194
• Average Gross Sales (Production) USD:  $650,079
• Average Gross Margin:  55.6%
• Average Net Promoter Score:  90

Single-Unit CN Businesses Open for 24 Months as of December 31, 2023

• Number of Businesses:  7
• Average Gross Booking CAD:  $630,765
• Average Gross Sales (Production) CAD:  $554,351
• Average Gross Margin:  57.2%
• Average Net Promoter Score:  87

Multi-Unit CN Businesses Open for 24 Months as of December 31, 2023

• Number of Businesses:  8
• Average Gross Booking CAD:  $1,663,555
• Average Gross Sales (Production) CAD:  $1,298,352
• Average Gross Margin:  59.5%
• Average Net Promoter Score:  89

• In this Item 19, the term “Gross Booking” means the total amount of work that was booked by the applicable Businesses. This includes all jobs that the applicable Businesses were hired to perform.

• In this Item 19, the term “Gross Sales” means all revenue generated by the CN Businesses and US Businesses, as applicable. This is also referred to as “Production.”

• The term “Gross Sales” does not include (a) tips that customers paid to subcontractors or other personnel that are not remitted to the businesses or (b) sales tax that is collected directly from customers and paid to the appropriate taxing authority.

• “Gross Sales” amounts were generated from the offer, provision, and sale of the Approved Products and Approved Services that Spray-Net’s System franchisees in the United States are authorized to offer except that none of the Gross Sales depicted herein were derived from roofing services, which are an optional service for U.S. franchisees.

Part 2 – CN Businesses and US Businesses Average Job Size (January 1, 2023 to December 31, 2023)

The chart in this Part 2 reflects the Average Job Size from the US Businesses and CN Businesses that operated during the 2023 Calendar Year and performed at least five jobs during the 2023 Calendar Year.

US Businesses (USD)

Exterior

• Number of Businesses:  26
• Number of Jobs:  664
• Average Job Size:  $5,286
• Median Job Size:  $4,973
• High Job Size:  $11,223
• Low Job Size:  $2,559
• Number and Percentage of Businesses That Met or Exceeded the Average:  12 (46%)

Interior

• Number of Businesses:  17
• Number of Jobs:  379
• Average Job Size:  $5,712
• Median Job Size:  $5,298
• High Job Size:  $9,202
• Low Job Size:  $3,492
• Number and Percentage of Businesses That Met or Exceeded the Average:  7 (41%)

CN Businesses (CAD)

Exterior

• Number of Businesses:  30
• Number of Jobs:  2,512
• Average Job Size:  $5,750
• Median Job Size:  $5,891
• High Job Size:  $7,826
• Low Job Size:  $3,018
• Number and Percentage of Businesses That Met or Exceeded the Average:  15 (50%)

Interior

• Number of Businesses:  22
• Number of Jobs:  861
• Average Job Size:  $5,473
• Median Job Size:  $5,444
• High Job Size:  $8,260
• Low Job Size:  $3,715
• Number and Percentage of Businesses That Met or Exceeded the Average:  9 (41%)

Part 4 – Average Gross Sales (Production) and Certain Disclosed and Estimated Expenses from CN and US Businesses (January 1, 2023 to December 31, 2023)

• The chart in this Part 3 includes actual Gross Sales (Production) data and certain Disclosed Expenses and Estimated Expenses.

• The Gross Sales (Production) in this Part 3 is the actual amount that the 15 CN Businesses and 7 US Businesses experienced between January 1, 2023 and December 31, 2023 (see Part 1).

• “Estimated Gross Profit” in this Part 3 is estimated by multiplying the applicable Gross Sales (Production) (average, median, low, high) by the applicable Gross Margin (average, median, low, high).

• As used in this Part 3, the term “Gross Margin” means a particular business’s Gross Profit (Gross Sales (Production) less Labor and Paint costs divided by the business’s Gross Sales (Production).

• The Disclosed Expenses in this Part 3 are percentages derived from the CN Businesses and US Businesses that reported certain data to Spray-Net between January 1, 2023 and December 31, 2023. Not all of the CN Businesses and US Businesses reported financial data to Spray-Net for each category in these charts.

Average Gross Sales (Production) and Certain Disclosed and Estimated Expenses from CN Businesses

CN Businesses Months of Operation:  78 Months

CN Businesses Gross Sales (Production) CAD:  $951,152 (100.0%)

Gross Margin:  58.5%

Estimated Gross Profit CAD:  $555,951 (58.5%)

Disclosed Expenses

• Marketing:  7.6%
• Accounting, Professional Services, and Bank Fees:  1.4%
• Gas:  2.8%
• Liability Insurance:  1.2%
• Office Expenses:  0.4%
• Shipping:  1.0%
• Vehicle, Vehicle Insurance, and Repairs:  4.4%
• Total Disclosed Expenses:  18.8%

Estimated Expenses

• Estimated Royalties (7% of Gross Sales) CAD:  $66,581 (7.0%)
• Estimated Business Management Software CAD:  $6,578 (0.7%)
• Estimated Convention and Regional Meetings CAD:  $2,500 (0.3%)
• Estimated Tech Package CAD:  $300 (0.0%)
• Estimated Sales Commissions CAD:  $57,069 (6.0%)

Estimated EBITDA (Estimated Gross Profit Less Disclosed Expenses Percentages and Estimated Expenses) CAD:  $244,240 (25.7%)

Average Gross Sales (Production) and Certain Disclosed and Estimated Expenses from US Businesses

US Businesses Months of Operation:  17 Months

US Businesses Gross Sales (Production) USD:  $385,962 (100.0%)

Gross Margin:  54.9%

Estimated Gross Profit USD:  $212,050 (54.9%)

Disclosed Expenses

• Marketing:  19.0%
• Accounting, Professional Services, and Bank Fees:  1.2%
• Gas:  1.7%
• Liability Insurance:  1.9%
• Office Expenses:  0.8%
• Shipping:  2.4%
• Vehicle, Vehicle Insurance, and Repairs:  3.2%
• Total Disclosed Expenses:  30.1%

Estimated Expenses

• Estimated Royalties (7% of Gross Sales) USD:  $27,017 (7.0%)
• Estimated Business Management Software USD:  $5,165 (1.3%)
• Estimated Convention and Regional Meetings USD:  $2,500 (0.6%)
• Estimated Tech Package USD:  $300 (0.0%)
• Estimated Sales Commissions:  $0 (0.0%)

Estimated EBITDA (Estimated Gross Profit Less Disclosed Expenses Percentages and Estimated Expenses) USD:  $60,723 (15.7%)

• Some outlets have sold this amount. Your individual results may differ. There is no assurance you will sell as much.

Section VI – Spray-Net Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️