What is the minimum weekly royalty fee that a 360 Painting franchisee must pay?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iii) Franchisee shall execute, at Franchisor's option, Franchisor's then-current form of Franchise Agreement, which Franchise Agreement shall supersede in all respects and may contain terms and conditions substantially different from those set forth herein, including, without limitation: (a) additional fees and/or an increase in any or all Continuing Fees (as such term is hereinafter defined), (b) a change in the size or composition of the Protected Territory, (c) the renewal Franchise Agreement shall only provide for the number of additional renewal terms called for by this Agreement, and (d) mandatory minimum periodic royalty requirements that, in Franchisor's determination, take into account the thencurrent market, the maturity of the Business and its record of Gross Sales during the term;
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the franchisor, 360 Painting, has the option to implement mandatory minimum periodic royalty requirements in its franchise agreements. These minimums are determined by the franchisor and take into account factors such as the current market conditions, the maturity of the business, and its gross sales record during the term.
For a prospective franchisee, this means that the royalty fees could potentially increase over the term of the agreement. The franchisor can adjust the minimum royalty requirements based on its assessment of the franchisee's business performance and prevailing market conditions. This introduces an element of uncertainty, as the franchisee's financial obligations could change over time.
It is important for potential franchisees to discuss these potential changes with 360 Painting. Understanding the specific conditions under which the franchisor might impose or adjust minimum royalty requirements is crucial for financial planning and risk assessment. Franchisees should also inquire about the historical frequency and magnitude of such adjustments in existing franchise agreements to better anticipate future financial obligations.