As for your friend's having been grandfathered in and not having to have a sprinkler system, well, that's fine for now, but what if he gets a new FM and that new FM is strictly by the books and wants to leave no stone unturned? That would change things.
Even more so, what happens if this season we have a repeat of the Six Flags incident, or a repeat of the Verdun Manor arson, at his haunt or a nearby haunt? Grandfathered in or not, I guarantee you, he'll have a sprinkler system in place the following season (assuming he even opens), and his FM will probably insist that all haunts on his watch (possibly including yours) will have one as well.
I'm sure there's some frightfully wise and sage advice to be found here about "better safe than sorry" and all that, but frankly if you can produce a safe show and your FM is okay with you not having a sprinkler system, per se, then that may be fine for now, but just be really ready to be really flexible, cuz you never know what your FM is going to say until s/he actually says it.
Just ask Frightener. He went from no adjustments needed, with his FM being as happy as a lark, to suddenly having to pony-up $40K for a sprinkler system. It took some real creativity to come up with another solution (one that didn't cost $40K) to make his FM happy.