What is the effect of a court or agency determining a provision of the 360 Painting Franchise Agreement to be invalid?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Section 30, "SEVERABILITY," paragraph one, of the Franchise Agreement shall be deleted in its entirety and shall have no force or effect and the following shall be substituted in lieu of the first paragraph of Section 30:
- 30. SEVERABILITY. Except as expressly provided to the contrary in this Agreement, each section, part, term, and/or provision of this Agreement shall be considered severable; and if, for any reason, determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such shall not impair the operation of provisions of this Agreement as may remain otherwise intelligible; and, the latter shall continue to be given full force and effect and bind the parties to this Agreement; and said invalid sections, parts, terms, and/or provisions shall be deemed not to be a part of this Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, if a court or agency with jurisdiction determines any part of the 360 Painting Franchise Agreement to be invalid or in conflict with existing or future laws or regulations, it will not negate the remaining provisions of the agreement. The remaining provisions will remain in full effect, binding both parties. The invalid sections will be considered as if they were never part of the agreement.
This "severability" clause ensures that the entire agreement does not become void due to one problematic provision. This is a fairly standard clause in franchise agreements. It allows the relationship between 360 Painting and the franchisee to continue under the remaining valid terms, providing stability and predictability.
However, the FDD also includes addenda for specific states like Indiana, Maryland, New York, and Virginia, which modify the standard agreement to comply with local franchise laws. These addenda specify that if any provision of the Franchise Agreement regarding termination, non-renewal, governing law, venue for litigation, modification, covenants not to compete, or limitations periods is inconsistent with state law, then state law will take precedence. This means that in those states, a court or agency ruling based on state law could have a more significant impact, potentially overriding specific sections of the franchise agreement to ensure compliance with local regulations.