Can the continuing fees increase in a new 360 Painting franchise agreement executed during a transfer?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
- (xii) at Franchisor's option and request, Franchisee and the transferee (as applicable) execute Franchisor's then-current form of Franchise Agreement, which Franchise Agreement shall supersede in all
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, when a franchise is transferred, 360 Painting has the option to require both the franchisee and the transferee to execute the then-current form of the Franchise Agreement. This new agreement supersedes the previous one and may contain substantially different terms and conditions.
Specifically, the new Franchise Agreement may include additional fees or an increase in any or all continuing fees. This means that a new franchisee taking over an existing 360 Painting franchise could face higher royalty payments or other ongoing costs compared to what the original franchisee was paying.
This clause gives 360 Painting the flexibility to adjust the financial terms of the franchise agreement to reflect current market conditions or changes in their business model. Prospective franchisees should carefully review the then-current form of the Franchise Agreement to understand the potential financial implications of a transfer, including any increases in continuing fees.