What happens if a 360 Painting franchisee's payment is not honored by their financial institution?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, for any reason, withhold payment of any Royalty Fees or other amounts due to Franchisor or to any of its affiliates. Franchisee shall not withhold or offset any amounts, damages or other monies allegedly due to Franchisee against any amounts due to Franchisor. No endorsement or statement on any payment for less than the full amount due to Franchisor will be construed as an acknowledgment of payment in full, or an accord and satisfaction, and Franchisor has the right to accept and cash any such payment without prejudice to Franchisor's right to recover the full amount due, or pursue any other remedy provided in this Agreement or by law. Franchisor has the right to apply any payments made by Franchisee against any of Franchisee's past due indebtedness as Franchisor deems appropriate. Franchisor shall set off sums Franchisor owes to Franchisee against any unpaid debts owed by Franchisee to Franchisor.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting franchisees are not allowed to withhold payments for any reason. Franchisees cannot withhold or offset any amounts, damages, or other monies allegedly due to them against any amounts due to 360 Painting. Any endorsement or statement on a payment for less than the full amount due will not be considered as an acknowledgement of payment in full. 360 Painting has the right to accept and cash any such payment without losing its right to recover the full amount due.
360 Painting has the right to apply any payments made by the franchisee against any of the franchisee's past due indebtedness as 360 Painting deems appropriate. 360 Painting can also set off sums it owes to the franchisee against any unpaid debts owed by the franchisee to 360 Painting.
This means that if a franchisee's payment is not honored, 360 Painting has strong rights to pursue the full amount owed, regardless of any disputes or claims the franchisee may have. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's revenue stream and ensure consistent payment of fees.