Upgrading

When upgrading Sprite Factory to a new version, always follow these steps:

Back up your entire project folder! Do not skip this step!
Open Unity, load the project you want to update, and make sure the Sprite Factory window or tab is closed.
Unity 5 users, be sure the Sprite Factory folder is in the root of your assets folder (see below).
Close Unity and re-open it.
Install the new version of Sprite Factory.
Run Sprite Factory from the menu.
If you are presented with a dialog box notifying you that data needs to be rebuild, proceed.

Unity 5 Upgrade Notes

As of Unity 5.0, Unity changed the way Unitypackages are extracted into the project. Because of these changes, it is extremely important that you always move the SpriteFactory folder back to the root of your Assets folder in your project before updating Sprite Factory with a new version. This applies to ALL assets in the Unity Asset Store and all Unitypackages downloaded and installed. This is not an issue with Sprite Factory's design and it is not something that can be worked around.

Sprite Factory itself will work if you move it into another folder in your project. However, before updating, you must always remember to move it back to the root of the project.

Details

In Unity 5, Unity has changed the way the Unitypackage system works. In 4.x it used to find existing files that matched those being extracted by GUID and then replace those files even if they weren't in the same location as in the Unitypackage. Not anymore in U5. If you unpack a file that already exists in the project but it's not in the expected location, it will just unpack a copy into the root instead of replacing the one you moved and change all the GUIDs on these new files. You will be left with multiple copies of the scripts and DLLs which will interfere with each other and break script references on Monobehaviours. There is no way to work around this. Unitypackage is Unity's format and asset store developers cannot change the way it works.