Can 360 Painting change the royalty payment due date or frequency?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, for any reason, withhold payment of any Royalty Fees or other amounts due to Franchisor or to any of its affiliates. Franchisee shall not withhold or offset any amounts, damages or other monies allegedly due to Franchisee against any amounts due to Franchisor. No endorsement or statement on any payment for less than the full amount due to Franchisor will be construed as an acknowledgment of payment in full, or an accord and satisfaction, and Franchisor has the right to accept and cash any such payment without prejudice to Franchisor's right to recover the full amount due, or pursue any other remedy provided in this Agreement or by law. Franchisor has the right to apply any payments made by Franchisee against any of Franchisee's past due indebtedness as Franchisor deems appropriate.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the 360 Painting franchise agreement does not explicitly state whether the franchisor can unilaterally change the royalty payment due date or frequency. However, the document does state that the franchisee cannot withhold royalty payments for any reason.
Specifically, the FDD emphasizes that franchisees are obligated to pay all Royalty Fees and other amounts due to 360 Painting or its affiliates without any deductions or offsets. This suggests that the franchisee's ability to negotiate or alter payment terms is limited. The franchisor also retains the right to apply any payments made by the franchisee to past due debts as it deems appropriate, further reinforcing the franchisor's control over payment application.
While the FDD does not directly address the franchisor's ability to change payment due dates or frequency, the strong emphasis on the franchisee's obligation to make timely and full payments suggests that any changes to these terms would likely be at the franchisor's discretion. A prospective franchisee should seek clarification from 360 Painting regarding the conditions under which royalty payment terms can be modified and whether there is any room for negotiation on these matters.
It would be prudent for a potential franchisee to discuss this point with existing franchisees and to seek legal counsel to fully understand their rights and obligations regarding royalty payments and potential changes to payment terms during the franchise agreement.