If someone buys my 360 Painting franchise, must they comply with applicable laws?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO 360 PAINTING, LLC FRANCHISE DISCLOSURE DOCUMENT FOR INDIANA FRANCHISEES
The Indiana Deceptive Franchise Practices Law (Indiana Code 23-2-2.7) contains certain laws governing the relationship between a Franchisor and Franchisee. Certain of these laws conflict with provisions contained in our customary Franchise Agreement and related documents. Set forth below is an overview of certain disclosures contained in the attached Franchise Disclosure Document which are amended by virtue of the Indiana law.
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- The Franchise Agreement and related documents by and between us and you, as an Indiana franchisee, will be governed by Indiana law and not the law of the Commonwealth of Virginia.
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- You, as an Indiana franchisee, have the right to litigate in Indiana and are not restricted to the requirements in the Franchise Agreement to sue only in Albemarle Virginia.
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- The covenants of non-competition with respect to you, as an Indiana franchisee, will be limited to an area equal to the protected area granted to you and other Franchisees.
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- Indiana law prohibits a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Law.
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- The reservation of rights to any specified remedy or limitation of remedies available to you, as an Indiana franchise, contained in Sections 19.1 and 27.4 of the Franchise Agreement is subject to the provisions of the Indiana Deceptive Franchise Practices Law [IC 23-2-2.7-1(10)].
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- The Sections in the Franchise Agreement that relate to termination, non-renewal, governing law, venue for litigation, modification, covenants not to compete and any limitations period for bringing claims are only applicable to the extent they are not inconsistent with or prohibited by Indiana law. Indiana law will control to the extent of any inconsistency or prohibition.
AMENDMENT TO 360 PAINTING, LLC FRANCHISE AGREEMENT FOR THE STATE OF INDIANA
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 360 Painting includes several state-specific addenda that address compliance with applicable laws. For instance, the addendum for Indiana franchisees states that the Franchise Agreement will be governed by Indiana law, and provisions related to termination, non-renewal, governing law, venue for litigation, modification, covenants not to compete, and limitations periods are applicable only to the extent they are consistent with Indiana law. Similarly, the addendum for Illinois franchisees specifies that Illinois law governs the agreements and voids any provision designating jurisdiction or venue outside of Illinois, although arbitration outside of Illinois is permitted.
For Maryland franchisees, the addendum notes that the termination of the Franchise Agreement due to bankruptcy may not be enforceable under applicable federal law. It also clarifies that franchisees may bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, with a three-year statute of limitations. The general release required for renewal, sale, or transfer will not apply to liabilities under this law.
Minnesota's addendum prohibits 360 Painting from requiring litigation to be conducted outside of Minnesota, requiring waiver of a jury trial, or requiring consent to liquidated damages, termination penalties, or judgment notes. It also states that nothing in the Disclosure Document reduces any rights provided under Minnesota law. These state-specific addenda ensure that franchisees' rights and obligations are aligned with the laws of their respective states, providing additional protection and clarity beyond the standard Franchise Agreement. Therefore, a franchisee must comply with all applicable laws.