Detailed Estimates of Spray-Net Franchise Costs Based on Item 7 (Estimated Initial Investment) of Spray-Net’s 2020 Franchise Disclosure Document
Single Territory with No Additional Territory Award
1. Initial Franchise Fee: $45,000
2. Initial Training Fee: $15,000
- This is Spray-Net’s current Initial Training Fee that is paid to Spray-Net to help defray the costs and expenses that are incurred in connection with the initial training it provides to you prior to and around the time you commence operating your Franchised Business, including the initial training program for you (or, if you are entity, your operating principal) and, if appropriate, the manager that you designate to handle the day-to-day operations of your Franchised Business and that Spray-Net approves (a “Designated Manager”).
- With that said, Spray-Net’s standard franchise offering assumes that you or, if applicable, your operating principal will be directly managing the day-to-day operations of the Franchised Business over at least the first full year of operations.
3. Initial Marketing Investment: $15,000
- While the Initial Marketing Investment will be paid out to Spray-Net’s approved or designated third-party suppliers for these kinds of services, Spray-Net expects and intends to collect this amount directly from you and may keep a portion of the Initial Marketing Investment as consideration for managing the placement and suppliers associated with this initial marketing and related activities designed to (a) increase visibility of the Franchised Business within your Designated Territory, and/or (b) generate prospective client interest and sales appointments prior to and up through the opening and initial operations of your Franchised Business.
4. Leased Equipment Package – Deposit: $3,000 to $10,000
- The standard franchise offering assumes that you will lease the Mobile Services Unit, Home Show Booth, and certain corresponding equipment, tools, and supplies necessary to outfit and equip the same for initial operations. As such, the estimated range above is designed to capture the initial deposit payments you will make to a third-party lessor to lease this equipment package directly from that third party.
- The other lease-related payments in connection with the Leased Equipment Package over the initial three months of operation, if any, are accounted for under the “Additional Funds” range described more fully below.
- If you determine not to follow Spray-Net’s System-recommended practice and standard franchise offering details and instead purchase this equipment package outright, Spray-Net estimates that the costs of such purchase will be between $55,000 and $60,000.
5. Permits, Deposits, Business Licenses, Legal and Accounting Fees: $2,000 to $3,500
- You are required to obtain all business licenses, permits, certificates, or approvals before you start your business. Local, municipal, county, and state regulations vary on what licenses and permits are required by you to operate. You are solely responsible for researching all laws applicable to where your Franchised Business is operated to determine what licenses and permits are necessary.
- You may need the assistance of an attorney, accountant, or other consultants to assist in establishing your Franchised Business. These fees may vary from location to location depending upon the prevailing rate of attorneys’, accountants’, and consultants’ fees.
- These fees are typically not refundable.
6. Travel and Living Expenses During Initial Training: $1,500 to $2,500
- This is the range designed to cover the travel and living expenses, including lodging, airfare, and meals, which you will incur to attending the Initial Training Program. The cost you incur will vary depending on factors such as distance traveled, mode of transportation, travel preferences, nature of accommodations, per diem expenses, and the number of persons who attend training.
7. Insurance: $1,500 to $4,500
- Your costs for insurance will vary depending on your market, the amount of coverage you select, your insurance carrier, and other factors. This is an estimate of insurance premiums for the initial three months of business operation.
8. Start-Up Package: $2,000 to $5,000
9. Vehicle Signage: $1,250 to $3,000
- This amount covers the costs associated with getting your Mobile Services Unit trailer branded with the wrap and/or other design Spray-Net designates from its designated or approved supplier.
10. Computer Hardware: $1,000 to $2,000
- This range is intended to cover the estimated cost of an iPad, cell phone, printer, and laptop computer. The lower estimate assumes you already own some of the required items. The high end assumes you will have to purchase each.
11. Approved Vehicle – Lease Payments for 3 Months (if needed): $0 to $2,000
- Low end assumes you already have a vehicle that can tow the Mobile Services Unit and that otherwise meets Spray-Net’s System standards and specifications for use in connection with a Franchised Business. High end assumes you will be required to lease such a vehicle that meets Spray-Net’s System standards and specifications from a third-party lessor and is designed to cover the estimated lease payments over your first three months of operation.
12. Additional Funds for First 3 Months: $12,000 to $35,000
- Spray-Net recommends that you have a minimum amount of working capital available to cover certain expenses incurred before you open and in your first three months of operation, including operating expenses, vehicle payments, and salaries. You will need to have sufficient capital to cover employment costs for your Franchised Business. You must be prepared to reorder inventory and supplies as necessary and to cover the costs of operations.
- Spray-Net cannot guarantee that you will not have additional expenses. This estimate is for your business expenses only and does not account for sales revenue from operations used to pay these costs.
- This estimate for “Additional Funds” does not include any of your personal living expenses, and does not include any fees associated with debt services. This range does not include any draw or salary for you.
13. Total: $99,250 to $142,500
- In calculating these estimates, Spray-Net relied on (a) the experience of its affiliate that administers the franchise system in Canada, (b) the experience of the Existing Canadian Businesses, and (c) estimates Spray-Net has received from certain third-party vendors.
With Additional Territory Fee and Rights
- Total: $129,250 to $172,500