Is a 360 Painting franchisee allowed to promote their business outside of their Protected Territory?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
eighty thousand (80,000) single family dwellings as of the date of this Agreement. If the United States Postal Service modifies any of the ZIP Codes encompassed by the Protected Territory or which represent the area included the Protected Territory, Franchisor may modify the Protected Territory to account for such ZIP Code modification(s). The modified Protected Territory may result in fewer people being included in or a smaller geographic area being represented by the Protected Territory. Franchisee shall not promote the Business outside of the Protected Territory, except in cooperation with other franchisees of Franchisor as specified in Section 11.4 herein, nor may Franchisee provide any 360 Painting services at any location outside the Protected Territory, except with the written permission of Franchisor (and if such permission is granted, such permission shall not be deemed to grant Franchisee general, ongoing, or permanent rights to service that customer or other customers outside of the Protected Territory). Franchisee agrees to open only one (1) Business within the Protected Territory, and further agrees not to relocate the Business within the Protected Territory without prior written consent from Franchisor. The location of the Business shall either be Franchisee's home office or an office location selected by Franchisee and approved by Franchisor. In all cases, Franchisee must operate the Business only in the Protected Territory and only from a home office (or other approved office space) and all Vehicles, and the home office (or other approved office space) and all Vehicles must be located in the Protected Territory at all times.
- 2.2 Territorial Protection. Subject to Sections 2.3 and 2.4, during the term of this Agreement, Franchisor shall not, nor shall Franchisor license any person other than Franchisee to, establish and operate a Business providing System services to residential or "light commercial" customers within the Protected Territory using the Marks or the System. The term "light commercial" means buildings and facilities that are similar in size and scope to single family residences.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, a 360 Painting franchisee is generally prohibited from promoting their business outside of their protected territory. However, there are exceptions to this rule. A franchisee can promote their business outside their territory if they cooperate with other 360 Painting franchisees or receive written permission from the franchisor.
If a potential client outside of a franchisee's protected territory requests their services, the franchisee is required to refer the client to either 360 Painting or the franchisee that operates in the client's territory. If no franchisee operates in that territory, the franchisee must refer the client to 360 Painting. The franchisor may then allow the franchisee to perform the requested services, but this permission does not grant the franchisee ongoing rights to service clients outside their territory.
360 Painting retains the right to conduct marketing and promotional activities within or outside the protected territory, including activities related to national accounts. This means that while franchisees are generally restricted from promoting outside their territory, 360 Painting itself can engage in broader marketing efforts. Franchisees should be aware of these territorial limitations and referral obligations to avoid violating the franchise agreement.