On what date did 360 Painting enter into a Consent Order with the Securities Commissioner of Maryland?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
360 Painting, LLC and Paul Flick. On August 18, 2016, the defendants entered into a Consent Order with the Securities Commissioner, in which they agreed, without admitting or denying any of the Commissioner's statements of fact or conclusions of law, except as to the Commissioner's jurisdiction in the proceeding, (1) to immediately and permanently cease and desist from the offer and sale of franchises in violation of the Maryland Franchise Registration and Disclosure Law; (2) to promptly file with the Securities Division and diligently pursue the completion of an initial application to register the 360 Painting franchise offering in Maryland; and (3) to send offers of rescission to two Maryland Franchisees, offering them the right to rescission of their 360 Painting franchise agreements and to obtain a refund of initial franchise fees. In an Order Modifying Consent Order dated January 4, 2017, the Consent Order was modified so that 360 Painting was not required to register its 360 Painting franchise offering in Maryland as long as no offers or sales of 360 Painting franchises were made in Maryland or to any Maryland residents. In the Consent Order, the Commissioner concluded that defendants had violated §§ 14-214, 14-216, 14- 228 and 14-229 of the Maryland Franchise Registration and Disclosure Law by offering and selling franchises in Maryland and to Maryland residents while not registered to offer and sell franchises in Maryland and using a Franchise Disclosure Document that failed to set forth all information the Securities Division requires to be included in a Maryland registered Franchise Disclosure Document under the Maryland Franchise Registration and Disclosure Law and Maryland's Franchise Regulations.
Source: Item 3 — LITIGATION (FDD pages 13–18)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting entered into two Consent Orders with the Securities Commissioner of Maryland. The first Consent Order was entered on August 18, 2016. In this order, 360 Painting agreed to cease offering and selling franchises in violation of Maryland franchise laws, to pursue registration of its franchise offering in Maryland, and to offer rescission to two Maryland franchisees.
The second Consent Order was entered on April 19, 2023. In this order, 360 Painting agreed to cease offering and selling franchises in violation of Maryland franchise laws and to pay a civil monetary penalty of $50,000 to the Office of the Attorney General. The consent order is a disclosable order as described under the Maryland Franchise Law, and Item 3 of the NASAA Franchise Registration and Disclosure Guidelines and Amended.
These actions indicate that 360 Painting has faced regulatory scrutiny regarding its franchise sales practices in Maryland. Prospective franchisees should carefully review Item 3 of the FDD, consult with a franchise attorney, and conduct thorough due diligence to understand the implications of these past regulatory issues.