In a 360 Painting franchise transfer, what agreement must a transferee or holder of a greater than 5% interest make?

According to 360 Painting's 2025 Franchise Disclosure Document, in the event of a franchise transfer, the transferee, or all holders of a legal or beneficial interest of greater than five percent (5%) in the transferee, must agree to be personally bound jointly and severally by all provisions of the Franchise Agreement for the remainder of its term. This means that the new franchisee or the individuals with a significant stake in the new franchise entity (more than 5%) must commit to upholding all the obligations and responsibilities outlined in the original franchise agreement. This ensures that 360 Painting maintains consistent standards and contractual compliance even after a transfer of ownership.

This requirement protects 360 Painting by ensuring that the new owners are fully accountable for adhering to the franchise agreement. It reduces the risk that a transfer could lead to a decline in service quality or brand standards. By requiring a personal commitment from the transferee and major stakeholders, 360 Painting aims to maintain the integrity and consistency of its franchise network.

For a prospective franchisee, this condition means that if they plan to transfer their 360 Painting franchise in the future, the potential buyer and any significant investors they bring on board must be willing to accept full responsibility for the existing franchise agreement. This could influence the pool of potential buyers and the terms of the transfer agreement, as the transferee's willingness to be bound by the original agreement is a critical factor for approval by 360 Painting.