Spray-Net Franchise Review – Average Gross Sales, Cost of Goods Sold, Gross Profit Margin, Marketing Expenses for Franchised Businesses (2020 FDD) | Franchise Chatter10 min read

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America's Most Lucrative Franchises of the Year

Spray Net Franchise

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

  • Section I – Background information on the Spray-Net franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Spray-Net franchise, based on Item 7 of the company’s 2020 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Spray-Net franchise, based on Items 5 and 6 of the company’s 2020 FDD
  • Section IV – Number of franchised and company-owned Spray-Net outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
  • Section V – Presentation and analysis of Spray-Net’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
  • 2019 average, median, high, and low gross sales for the 7 Canadian Spray-Net franchised businesses operating in a single territory and the 6 Canadian Spray-Net franchised business operating in 2 territories during the entire 2019 calendar year (separately stated)
  • 2019 average gross sales, cost of goods sold (COGS), gross profit margin, marketing expenditures, royalty fees, estimated technology fees, and gross sales less COGS, marketing expenditures, royalty and technology fees for the 7 Canadian Spray-Net franchised businesses operating in a single territory and the 6 Canadian Spray-Net franchised business operating in 2 territories during the entire 2019 calendar year (separately stated)

Section I – Background Information

14 Things You Need to Know About the Spray-Net Franchise

Wins Big at International Franchise Association’s 2020 Annual Convention

1.  In mid-February 2020, Spray-Net won the All-Star Round of NextGen in Franchising Global Competition at the International Franchise Association’s 60th Annual Convention in Orlando, Florida. The theme for 2020 challenged past winners to pitch how their businesses are getting ready for the next five years. Spray-Net’s pitch focused on how the company is hopping aboard the data train and using internal data through its proprietary software, “The Spray-Network,” to provide a more customized and personalized experience for customers and help its franchisees optimize their businesses.

2.  Carmelo Marsala, founder and CEO of Spray-Net, said, “Spray-Net is getting ready for the next five years, and our proprietary and custom-built software is going to allow us to do that. The Spray-Network compiles customer and job data from across our entire franchise network, ensures consistency and accuracy in pricing, provides our franchisees with the business intelligence to easily measure the performance of their businesses, does the basics of keeping the important stuff consistent such as pricing, quality and business intelligence, and collects enough data to know how and when to personalize things along the way.”

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3.  Marsala added, “By collecting data from Spray-Network and other data sources, we can aggregate it into different types of machine learning algorithms and with the right business architecture we can: personalize customer experience, employee experience, and marketing communications; create proactive and custom training for franchisees; and, ultimately, increase our franchisees’ effectiveness.”

4.  The NextGen in Franchising Global Competition finalists and winners shared what they have done to grow and improve their brand since the last time they were see them at the IFA Convention. They competed to present in the final round during the Closing General Session. The NextGen in Franchising Global Competition engages young entrepreneurs who are seeking careers and business opportunities in the franchising industry. By providing individuals from around the world with networking opportunities, constructive feedback, and a closer look into key components of the franchise process, NextGen is helping entrepreneurial dreams come true.

Hires New Director of Franchise Development

5.  In mid-November 2020, Spray-Net announced that it had hired a new director of franchise development, Jennifer Robinson. New to the United States (with a massive footprint already in Canada), Spray-Net’s mission is to use chemistry and software to deliver the best renovation solutions to homeowners. Spray-Net currently has U.S. locations in Columbus, Ohio; Northeast New Jersey; Chattanooga, Tennessee; and St. Louis, Missouri.

6.  Jennifer Robinson is the company’s first fully remote hire, working out of Toronto. In her role, Robinson will prospect for conversion and new development opportunities within U.S. and Canada territories and will also negotiate and execute new franchise agreements.

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7.  Robinson brings a wealth of franchise experience to the team. She started her franchise career at Freshii (a healthy food franchise with over 500 locations). In this franchise training role, she opened 26 locations across Canada and the US. After that, she moved into development, then operations, with another franchisor called SpinCo. Robinson said, “I love helping people live out their dreams of owning their own businesses through franchising.”

Opens Franchises in 15 New Territories

8.  At the beginning of February 2021, Spray-Net announced that it has awarded 15 new territories all over North America (United States and Canada) over the past 90 days. This includes five new US territories in Houston, two in St. Louis, two in Atlanta, two in the Suncoast area of Florida, and others in North Jersey and Northern Dallas. Spray-Net has also opened locations in Canada in Peterborough, Ontario; Granby, Quebec; and Drummondville, Quebec.

9.  Thanks to its patented weather-adjustable paint process and proprietary chemistry, Spray-Net delivers a factory finish on aluminum and vinyl siding, stucco, brick, and even surfaces that are not traditionally painted on-site, like front and garage doors and windows. “Our company is extremely unique as we paint surfaces that most other painters don’t, like aluminum, vinyl and windows,” says Carmelo Marsala, CEO of Spray-Net. “We are looking forward to providing this service all over the US and Canada, by way of our franchisees.”

10.  The company is currently offering franchise opportunities to qualified candidates throughout the United States. Qualified applicants who are awarded the opportunity to own and operate a franchise will be provided with an exceptional business model, extensive training, and consistent, ongoing support from senior management. Marsala added, “By bringing the factory painting experience on-site, we give homeowners a new way to paint their homes and our franchise partners a unique home-improvement franchise opportunity.”

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Company History

11.  Spray-Net was founded in 2009 by Carmelo Marsala in Montreal, Québec, Canada. While Marsala was in college, he had become a franchisee for College Pro, a house painting and window cleaning service provider headquartered in Toronto. Marsala was often asked by customers if he could paint aluminum and vinyl doors and window frames, but he had to refuse as traditional painting methods would leave a streaky-looking finish that would eventually peel off. He eventually realized that there was a need to fill these types of painting services and started doing some research.

12.  With an understanding of how new siding, window frames, and doors were painted in a factory, Marsala thought he could find a way to reproduce the same factory-quality finish and durability on-site. Marsala’s research led to the development of industrial-strength, spray-applied paints and coatings, and specialized techniques for not only siding, windows, and doors, but also stucco and brick.

13.  Armed with his new tools and painting technique, Marsala developed Spray-Net and within three years, the business grew from three trucks to six. Marsala started franchising the Spray-Net concept in 2014, with the first two franchises opening in Quebec City and Gatineau, Quebec. Over the next few years, Spray-Net continued to grow around Canada and development for franchising in the United States began in 2018. Spray-Net currently has U.S. locations in Columbus, Ohio; Northeast New Jersey; Chattanooga, Tennessee; and St. Louis, Missouri, with more coming soon.

Entrepreneur’s Franchise 500

14.  Spray-Net did not rank on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Spray-Net franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Spray-Net’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

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

2018

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

2019

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

Company-Owned

2017

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

2018

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

2019

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

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

  • Spray-Net’s affiliate, SN Canada, has offered and sold franchises for the right to own and operate Businesses that are (a) 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 (b) 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.
  • In light of the foregoing, there is a reasonable basis for the included historical financial information regarding the Existing Canadian (CN) Businesses that are actively owned and operated in Canada as of the Issue Date in this Item.
  • For purposes of this Item, the term “Gross Sales” for a given Existing CN Business means the total revenue that the Existing CN Businesses generated over a period of time comprised of the 23 to 26 week season in Canada that takes place from approximately mid-April to mid-October (the “Measurement Period”) from the sale and provision of the Approved Services and Approved Products that the System franchisees will be authorized to offer and sell at their respective Franchised Businesses in the United States.
  • Whenever “Gross Sales” are disclosed in this Item 19, 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 Issue Date may not be the same rate at the time you are disclosed with the Disclosure Document and/or purchase franchise rights from Spray-Net.
  • From Part 1 and Part 2 below, Spary-Net excluded: (i) 7 Existing CN Businesses that opened in 2019 and did not operate the entire 2019 Calendar Year; (ii) 6 Existing CN Businesses that signed Franchise Agreements, but are not yet open; (iii) 1 corporate business; and (iv) 2 Existing CN Businesses that are operated in a “Designated Territory” that is comprised of more than 2 territories because Spray-Net only offers franchises under the Disclosure Document to own and operate a Franchised Business in 1 or 2 territories.

Part 1 – Average and Median Gross Sales Over Measurement Period Amongst Disclosed CN Businesses Operating in 1 or 2 Territories

  • Part 1 of this Item discloses the average “Gross Sales” generated amongst all and certain subsets of the 13 Existing CN Businesses that had commenced soliciting prospective customers and providing Approved Services over the Measurement Period (collectively, the “Disclosed CN Businesses”).
  • Of these 13 Disclosed CN Businesses, there were: (i) 7 Disclosed CN Businesses operating in a “Designated Territory” comprised of a single territory over the Measurement Period; and (ii) 6 Disclosed CN Businesses operating in 2 territories over the Measurement Period.

Disclosed CN Businesses Operating in a Single Territory Over Measurement Period (7 Businesses)

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