What happens if a 360 Painting franchisee fails to relocate or defaults on a lease?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
- (xi) Upon demand by Franchisor, assign to Franchisor or its designee all of Franchisee's rights, title, and interest in the telephone numbers, telephone directory listings and advertisements, website URLs, e-mail addresses, all vendor contracts, all vendor accounts, store leases and governmental licenses or permits used for the operation of the Business.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 360 Painting states that a franchisee must secure prior written consent from the franchisor before relocating their business within their protected territory. The location of the business must be either the franchisee's home office or an office location approved by 360 Painting. The franchisee must operate the business only in the protected territory and from an approved location. All vehicles and the home office (or other approved office space) must be located within the protected territory at all times.
The FDD does not explicitly detail the consequences if a 360 Painting franchisee fails to relocate or defaults on a lease. However, the document does state that upon termination of the Franchise Agreement, the franchisee must assign to 360 Painting all rights to store leases used for the operation of the business, if the franchisor demands it.
To fully understand the implications of failing to relocate or defaulting on a lease, a prospective 360 Painting franchisee should seek clarification from the franchisor regarding specific penalties, termination clauses, and any support provided in such situations. This information is crucial for making an informed investment decision and understanding the full scope of the franchisee's obligations.