factual

Does the agreement to attempt internal dispute resolution for 360 Painting survive the termination or expiration of the Franchise Agreement?

360_Painting Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (i) Internal Dispute Resolution. In recognition of the strain on time, unnecessary expense and wasted resources potentially associated with litigation and/or arbitration, and in the spirit of cooperation, the parties pledge to try to resolve any dispute amicably, without litigation or arbitration. Accordingly, Franchisee must first bring any claim or dispute between Franchisee and Franchisor to Franchisor's Chief Executive Officer, after providing notice as set forth in Section 26 of this Agreement, and make every effort to resolve the dispute internally. Franchisee must exhaust this internal dispute resolution procedure before Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)

What This Means (2025 FDD)

According to the 2025 360 Painting Franchise Disclosure Document, the agreement to first attempt internal resolution of disputes survives the termination or expiration of the Franchise Agreement. Before a franchisee can bring a claim or dispute before a third party, the franchisee must first bring the claim to 360 Painting's Chief Executive Officer, after providing notice as set forth in Section 26 of the agreement. The franchisee must make every effort to resolve the dispute internally and exhaust this procedure before pursuing other avenues.

This requirement to attempt internal dispute resolution even after the franchise agreement ends could benefit both 360 Painting and the franchisee. It provides a structured way to address disagreements and potentially avoid costly and time-consuming litigation or arbitration. For the franchisee, this could mean a chance to resolve issues more quickly and directly with the franchisor, even after the formal business relationship has concluded.

However, it's important to note that this internal dispute resolution is only the first step. If the dispute cannot be resolved internally, the franchisee may then proceed to other methods such as non-binding mediation or litigation. The survival of this clause ensures that both parties have an opportunity to find common ground before resorting to more formal and adversarial processes, even after the franchise term has ended.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.