factual

Besides royalties, what other fees are included in the franchise service fees for a 360 Painting franchise?

360_Painting Franchise · 2025 FDD

Answer from 2025 FDD Document

Franchisee must utilize this contact center exclusively, comply with any rules and regulations adopted by Franchisor (in the Brand Standards Manual or otherwise) governing the contact center and pay the fees described in Section 4.6, above.

The Marketing Fund Contribution will be expended for the benefit of Franchisor, Franchisee and all other franchisees or users of the System in the United States and Canada for the production or purchase of such radio, television, print and/or other advertising materials or services as Franchisor deems necessary or appropriate, in its sole discretion, on a national, regional or local basis (the "Marketing Fund"). The expenditure of such funds for advertising is to be under the control of, and in the discretion of, Franchisor at all times, or such other entities designated by Franchisor. Franchisee understands and acknowledges that the Marketing Fund is intended to maximize and support general public recognition, brand identity, sales and patronage of 360 Painting Businesses for the benefit of all 360 Painting Businesses and that Franchisor undertakes no obligation to ensure that the Marketing Fund benefits each 360 Painting Business in proportion to its respective contributions. Franchisor agrees that all funds contributed to the Marketing Fund may be used to meet any and all costs (including, without limitation, reasonable salaries and overhead incurred by Franchisor) of developing, maintaining, administering, directing and preparing national, regional or local advertising materials, programs and public relations activities including, without limitation, the costs of preparing and conducting television, radio, magazine, billboard, newspaper, direct response literature, direct mailings, brochures, collateral advertising material, designing and implementing websites for Franchisor and/or its franchises, surveys of advertising effectiveness and other media programs and activities, employing advertising agencies to assist therewith and providing promotional brochures, decals and other marketing materials. Franchisee further acknowledges that the Marketing Fund may be used to develop, maintain, administer, direct and prepare materials, programs and public relations activities which promote the System in conjunction with one or more franchise systems which may be owned by Franchisor or Franchisor's affiliates; provided that a substantial focus of such materials, programs or activities includes the promotion of the System. Notwithstanding the foregoing, Franchisor agrees that the Marketing Fund's assets shall not be used to create, design or disseminate advertising or promotional materials that are primarily intended, or whose principal effect is, to recruit new franchisees and develop new franchised businesses operating under the Marks.

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

What This Means (2025 FDD)

Based on the 2025 Franchise Disclosure Document, 360 Painting franchisees must utilize the franchisor's contact center exclusively and pay the fees described in Section 4.6. Additionally, franchisees contribute to the Marketing Fund, which is used for advertising materials and services. These contributions benefit the franchisor, franchisee, and all other users of the 360 Painting system in the United States and Canada. The franchisor has control over the expenditure of these funds.

The Marketing Fund is intended to maximize brand recognition and sales for all 360 Painting businesses. The franchisor is not obligated to ensure that the Marketing Fund benefits each business in proportion to its contributions. The funds may cover costs related to developing and maintaining advertising materials, programs, and public relations activities, including salaries and overhead incurred by the franchisor. These activities may promote the 360 Painting system in conjunction with other franchise systems owned by the franchisor or its affiliates, provided that a substantial focus includes promoting the 360 Painting system.

However, the Marketing Fund's assets cannot be used to create advertising or promotional materials primarily intended to recruit new franchisees or develop new franchised businesses operating under the 360 Painting marks. Franchisees should be aware that these fees, in addition to royalties, contribute to the overall cost of operating a 360 Painting franchise and should factor them into their financial projections.

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.