Spray-Net

The pending litigation case against the franchisor has been ongoing for at least several months. What is the nature of this case, what are the alleged claims, and what is the expected timeline for resolution?

2023 saw 10 unit closures and terminations out of 27 total units (37% turnover). What specific factors or policy changes contributed to this dramatic spike, and have conditions stabilized since then?

Terminations account for 14 of 17 total unit exits over 3 years. What are the most common reasons franchisees are being terminated, and do these align with the 23 listed termination causes in the agreement?

The technology fee of $100 monthly is significantly lower than the typical range of $156.5-$599.0. What technology services and platforms are included in this fee, and are there any hidden costs or additional technology-related charges?

Your non-compete restriction extends 50 miles, which exceeds typical industry standards of 25-40 miles. How is this radius enforced, and has the franchisor taken legal action against franchisees who violated these restrictions?

The agreement lists 23 termination causes, above the typical range of 14-21. Which of these causes have been most frequently invoked in actual terminations, and are any of them considered strict liability violations without a cure period?

Average gross sales are $557,539. Are these figures supported by Item 19 financial performance data, and what percentage of franchisees achieve or exceed this average?

Can you provide copies of the actual Item 19 statement and clarify the number of units that reported financial data, as well as the range of reported sales performance?

The system has grown 38.14% annually over 3 years, but with high turnover rates of 17.2% annually and 41.4% over 3 years. What are the unit acquisition costs and average payback period for franchisees?

The renewal fee is $10,000 and renewal requires re-imaging, renovating, and modernizing vehicles and facilities. What is the estimated total cost of renewal requirements, and can you provide examples of franchisees who have successfully renewed?

Of the 1 pending litigation case, can you disclose the identity of the other party, whether it involves a franchisee or another stakeholder, and the key allegations?

The Risk Factors score of 52 falls below the typical range of 58-76. What specific risk factors are driving this lower score, and how do they compare to competitor franchises?

Termination Rate of 6.9% exceeds the typical range maximum of 6.83%. Can you provide a breakdown of whether these are performance-based terminations, non-payment defaults, or other causes?

How many of the 23 termination causes are immediately actionable without a cure period (non-curable), versus those with a 10-30 day cure window?

Can you explain the rationale for the particularly broad indemnification clause requiring spouses' personal guarantees, and have any franchisees successfully negotiated modifications to this clause?

What is your historical renewal rate at the 10-year mark, and how many franchisees have opted not to renew versus choosing to transfer or exit in other ways?

The closure rate of 17.2% in the past year is elevated. Of the 5 units that closed in 2024, how many were voluntary closures by franchisees versus forced closures or terminations?

In 2024, 3 units ceased operations for 'other' reasons not specified as closure, termination, or transfer. Can you explain what these 3 situations were and whether they represent full business failures?

Given the Investment Costs score of 67 is below the typical range of 74-75, what factors are contributing to franchisees' concerns about initial investment structure or costs?

Can you provide contact information for at least 5-10 current franchisees operating profitably for 3+ years, as well as references from franchisees who have exited in the past 2 years?