What is the meaning of 'AVC' in the context of the 360 Painting case?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
es accepted the rescission offer.
In the Matter of 360 Painting, LLC, No. 20-AVC-F001, investigation by Illinois Attorney General's Office. In January 2020, the Illinois Attorney General's Office began an investigation of potential violations of the Illinois Franchise Disclosure Act by 360 Painting regarding its failure to obtain a signed Illinois amendment to the franchise agreement for Illinois franchises between April 2017 and December 2019. 360 Painting did not contest that Illinois amendments were not executed by Illinois franchisees during this period, but asserted that: (a) each Illinois franchisee received a properly registered franchise disclosure document, including an addendum to the disclosures and an amendment to the franchise agreement containing modifications required by Illinois law; and (b) because each franchisee received the required disclosures, the failure to obtain executed amendments from each franchisee could not have affected the franchisees' decision to purchase the franchise. The Illinois Attorney General asserted that because 360 Painting brought suit against an Illinois franchisee in Virginia (before unilaterally dismissing the case by filing a Motion to Non-Suit), Illinois franchisees were harmed. On May 22, 2020, 360 Painting entered into an Assurance of Voluntary Compliance ("AVC"), under which 360 Painting agreed to offer affected franchisees the opportunity to rescind their franchise agreements, make a $6,000 payment to the state, disclose the AVC in its disclosure document, and comply with the Illinois Franc
Source: Item 3 — LITIGATION (FDD pages 13–18)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, "AVC" refers to an "Assurance of Voluntary Compliance." This is clarified within the context of an investigation by the Illinois Attorney General's Office into potential violations of the Illinois Franchise Disclosure Act by 360 Painting. The investigation concerned the failure to obtain signed Illinois amendments to the franchise agreement for Illinois franchises between April 2017 and December 2019.
To resolve the matter, on May 22, 2020, 360 Painting entered into an Assurance of Voluntary Compliance (AVC). As part of the AVC, 360 Painting agreed to several actions. These included offering affected franchisees the opportunity to rescind their franchise agreements, making a $6,000 payment to the state of Illinois, disclosing the AVC in its disclosure document, and ensuring future compliance with the Illinois Franchise Disclosure Act.
For a prospective 360 Painting franchisee, the presence of an AVC indicates a past regulatory issue that the company has addressed. It demonstrates that 360 Painting has taken steps to rectify the situation and ensure future compliance. However, it also highlights the importance of carefully reviewing the franchise agreement and disclosure documents to understand any potential risks or liabilities associated with the franchise.