Is the 360 Painting franchisor required to share supplier payments with other franchisees?
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 supplier payments with franchisees. The franchisor and its affiliates may receive payments, discounts, or other forms of consideration from suppliers due to the suppliers' dealings with the franchisees or the 360 Painting system. The FDD states that 360 Painting can use these amounts without any restrictions.
Specifically, 360 Painting is not obligated to provide an accounting of these supplier payments to franchisees, nor are they required to share any benefits derived from these payments with franchisees or other members of the 360 Painting franchise system. This means that any financial advantages 360 Painting gains from supplier relationships do not have to be passed on to the franchisees.
This arrangement is fairly common in franchising, where franchisors often negotiate discounts or rebates with suppliers based on the collective buying power of the franchise network. While franchisees may indirectly benefit from these arrangements through potentially lower supply costs, the franchisor is typically not obligated to directly share the payments received from suppliers.