Is the 360 Painting franchisor required to share the benefit of supplier payments with the franchisee?
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting is not required to share any supplier payments with its franchisees. The franchisor and its affiliates may receive payments, discounts, or other forms of consideration from suppliers in exchange for the suppliers' dealings with franchisees or the 360 Painting system as a whole. The FDD states that 360 Painting can use these amounts without any restrictions.
This means that a 360 Painting franchisee will not be entitled to any portion of the payments or discounts that the franchisor receives from suppliers. These supplier payments are solely for the benefit of the franchisor. The franchisee has no claim to these funds, which could impact the overall profitability of the franchise system from the franchisee's perspective.
Furthermore, 360 Painting does not have to provide an accounting of these supplier payments to the franchisee. This lack of transparency means franchisees may not know the extent to which the franchisor benefits from these supplier arrangements. Franchisees are responsible for ensuring that all products and services they use comply with applicable laws, even if sourced from approved or designated suppliers.