What law is the Virginia Law Modification of the 360 Painting Franchise Agreement recognizing?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for 360 Painting, LLC for use in the Commonwealth of Virginia shall be amended as follows:
Item 5, Additional Disclosures. The following statement is added to Item 5:
The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement.
Item 17, Additional Disclosure. The following statements are added to Item 17.g. and Item 17.h.
Section 13.1-564 of the Virginia Retail Franchising Act makes it unlawful for a franchisor to cancel a franchise agreement without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, the Virginia Law Modification to the 360 Painting Franchise Agreement recognizes the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act. This recognition leads to amendments in the Franchise Disclosure Document specifically for franchisees in Virginia.
Item 5 regarding Additional Disclosures is amended to include a statement that the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires 360 Painting to defer payment of the initial franchise fee and other initial payments until 360 Painting has completed its pre-opening obligations under the franchise agreement.
Additionally, Item 17 regarding Additional Disclosure is amended to state that Section 13.1-564 of the Virginia Retail Franchising Act makes it unlawful for a franchisor to cancel a franchise agreement without reasonable cause. The amendment clarifies that if any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause" as defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable. This ensures that 360 Painting's franchise agreements comply with Virginia law, providing additional protection to franchisees against unwarranted termination.