What documents must a 360 Painting franchisee deliver to the franchisor when proposing a transfer?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee or any Equity Holder proposes a Transfer that will sell: (i) fifteen percent (15%) or more of the assets of the Franchised Business; or (ii) any ownership interest in this Agreement or a Franchisee entity, Franchisee shall obtain and deliver a bona fide, executed written offer or proposal to purchase, along with all pertinent documents including any contract or due diligence materials to Franchisor.
The offer must apply only to the sale of the above and may not include any other property or rights of Franchisee or its Equity Holders.
Franchisor shall, for thirty (30) days from the date of delivery of the last of all such required documents, have the right, exercisable by written notice to Franchisee, to purchase the proposed assets or ownership interests for the price and on the same terms and conditions contained in such offer or proposal.
Franchisor may substitute cash for the fair market value of any form of payment proposed in such offer or proposal.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, a 360 Painting franchisee must provide a bona fide, executed written offer or proposal to purchase, along with all pertinent documents including any contract or due diligence materials to 360 Painting if the franchisee proposes a transfer that will sell fifteen percent or more of the assets of the franchised business, or any ownership interest in the Franchise Agreement or a Franchisee entity.
This requirement allows 360 Painting to assess the proposed transfer and potential transferee thoroughly. By demanding all pertinent documents, including contracts and due diligence materials, 360 Painting ensures it has sufficient information to make an informed decision about the transfer. This protects the integrity and standards of the 360 Painting brand and network.
Furthermore, 360 Painting retains a right of first refusal, giving them the option to purchase the assets or ownership interests themselves under the same terms and conditions as the proposed offer. This clause enables 360 Painting to maintain control over its franchise network and prevent transfers that may not align with its strategic interests. The franchisor may substitute cash for the fair market value of any form of payment proposed in such offer or proposal.
It is important for prospective franchisees to understand these transfer conditions, as they can significantly impact the ability to sell the franchise. Franchisees should consult with legal and financial advisors to fully comprehend the implications of these requirements and ensure compliance when considering a transfer.