Following termination or non-renewal of my 360 Painting franchise, what must I do with the vehicles used in the business?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Franchise Agreement | Summary you agree to mediate any dispute, controversy or claim before | |
|---|---|---|---|
| bringing suit. | |||
| v. | Choi ce of forum | Section 27.2 | Subject to applicable state law, any mediation or litigation must be pursued in courts located in the county and state in which we maintain our principal place of business (currently the City of Charlottesville, VA). |
| w. | Choi ce of law | Section 27.1 | Subject to applicable state law, Virginia law applies, except disputes over the Marks will be governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sec. 1051 et seq.). |
| Provision | Section in Franchise Agreement | Summary financial report or other data that underestimates fees; multiple defaults within a twelve month period; material default under any other agreement you have with us; or 3 or more failed payments within any 12 month period. | |
| i. | Franchisee's obligations on termination or non renewal | Section 20; Internet Web Sites and Listings Agreement; Telephone Listing Agreement | You must: return all Confidential Information; stop using the System and the Marks and refrain from doing business under a confusing name or manner; pay all sums owed to us; de identify the Vehicles and the Business; cancel or assign to us any assumed names; assign your telephone and facsimile numbers to us; fulfill warranties obligations and either (i) post a bond equal to 0.5% of your gross sales for the last 24 months, or (ii) pay us a fee; comply with the covenants not to compete and any other surviving provisions of the Franchise Agreement. |
| j. | Assignment of contract by franchisor | Section 17.1 | There are no restrictions on our right to assign our interest in the Franchise Agreement |
| k. | "Transfer" by franchisee – definition | Section 17.2 | "Transfer" includes transfer of ownership or any interest in the Business, the Franchise Agreement, the Vehicle(s), the Business's assets or the franchisee entity or its owners if an entity. |
| l. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, upon termination or non-renewal of the franchise agreement, franchisees must de-identify the vehicles used in the business. This means removing any 360 Painting branding, logos, or other identifying marks from the vehicles.
In addition to de-identifying the vehicles, franchisees must also return all confidential information, stop using the 360 Painting system and marks, and refrain from doing business under a confusingly similar name or manner. Franchisees are also obligated to pay all sums owed to 360 Painting, cancel or assign any assumed names to the company, assign telephone and facsimile numbers, and fulfill all warranty obligations.
Furthermore, franchisees must either post a bond equal to 0.5% of their gross sales for the last 24 months or pay a fee to 360 Painting. They must also comply with covenants not to compete and any other surviving provisions of the Franchise Agreement. 360 Painting also has the option to purchase any or all of the vehicles related to the operation of the franchised business at fair market value, and this option can be exercised within 30 days after the termination or expiration of the Franchise Agreement.