Who must own the equity and voting power of the Controlled Entity for a 360 Painting franchise transfer?

According to the 2025 360 Painting Franchise Disclosure Document, if a franchisee seeks to transfer their franchise to a Controlled Entity, the franchisee or all holders of a legal or beneficial interest in the franchisee must own all of the equity and voting power of the outstanding stock or other capital interest in the Controlled Entity.

This requirement ensures that the original franchisee or those with a vested interest in the franchise maintain control over the business even after the transfer to the Controlled Entity. This provision likely aims to preserve the integrity and operational consistency of the 360 Painting franchise by preventing ownership from falling into the hands of unrelated or unapproved parties.

In addition to the equity and voting power requirement, the Controlled Entity must enter into a written agreement with 360 Painting, expressly assuming all obligations of the franchise agreement and other related agreements. All holders of legal or beneficial interest in the Controlled Entity must also enter into an agreement with 360 Painting, jointly and severally guaranteeing the full payment of the Controlled Entity's obligations and performance under the franchise agreement. These stipulations further protect 360 Painting's interests and ensure the continued adherence to the franchise terms.