Is the 360 Painting franchisor required to give the franchisee an accounting of supplier payments?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
According to the 2025 FDD, 360 Painting is not required to provide franchisees with an accounting of any payments it receives from suppliers. This means that 360 Painting and its affiliates may receive payments, discounts, or other forms of consideration from suppliers based on the suppliers' dealings with franchisees in the 360 Painting system.
This policy allows 360 Painting to use these supplier payments without any obligation to share the benefits with franchisees. As a result, franchisees may not directly benefit from any negotiated discounts or incentives that 360 Painting receives from suppliers.
Furthermore, 360 Painting will not be held liable for any financial losses or damages resulting from delays in the delivery or availability of products or services designated by the franchisor. The franchisee is responsible for ensuring that all products and services used in their business comply with applicable laws, and they can propose alternative products or suppliers if they find any non-compliance issues.