Is a 360 Painting franchisee required to use 360 Painting's 'Accounting and Business Advisory Services'?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
From time to time, Franchisor may designate approved suppliers, including itself or its affiliates, whose enumerated products or services shall be deemed to satisfy Franchisor's standards.
Unless otherwise required by Franchisor, or if Franchisor designates an exclusive designated supplier, Franchisee may purchase any and all products, supplies, Vehicles, equipment and tools from any available source, so long as such products, supplies, Vehicles, equipment and tools conform to the standards and specifications established by Franchisor.
If Franchisor designates itself as a supplier, Franchisor has the right to earn a profit on any items it supplies.
Franchisor and its affiliates may receive payments, discounts or other consideration from suppliers in consideration of such suppliers' dealings with Franchisee and/or the system of 360 Painting franchisees, and may use all amounts received by it without restriction.
Franchisor is not required to give Franchisee an accounting of supplier payments or to share the benefit of supplier payments with Franchisee or other 360 Painting franchisees.
Moreover, Franchisee acknowledges and agrees that Franchisor will not be liable for any losses (financial or otherwise) or damages including consequential or special damages, resulting from any delay in delivery or availability of any of the products or services designated by Franchisor.
Franchisee is responsible for verifying and ensuring the any products or services it uses in the operation of the Business comply with applicable law.
In the event that Franchisee determines that any product of an approved or designated supplier does not comply with applicable law, Franchisee may propose an alternate product or supplier in writing and Franchisor shall approve or disapprove such alternate product or supplier within 10 business days.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not explicitly state whether a 360 Painting franchisee is required to use 360 Painting's 'Accounting and Business Advisory Services'. However, the FDD does state that the franchisor may designate approved suppliers, including themselves or affiliates, whose products or services are deemed to satisfy 360 Painting's standards. Unless otherwise required by 360 Painting, the franchisee may purchase products and supplies from any available source, so long as they conform to the standards and specifications established by 360 Painting.
This suggests that while franchisees are generally free to choose their suppliers, 360 Painting retains the right to mandate the use of specific suppliers, including themselves, for certain products or services. If 360 Painting designates itself or an affiliate as the exclusive supplier for accounting and business advisory services, franchisees would be required to use those services.
It is important for prospective franchisees to clarify with 360 Painting whether the 'Accounting and Business Advisory Services' are a required service, and if so, what the associated costs and obligations would be. Understanding the circumstances under which the franchisee is obligated to use designated suppliers is crucial for assessing the financial implications of the franchise.