Does 360 Painting negotiate distribution and supply arrangements for franchisees?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
There are currently no purchasing or distribution cooperatives. We have negotiated distribution and supply arrangements, commissions, and group rates for purchases of certain inventory and supplies necessary for the operation of the Business. The terms of these arrangements may vary, but may include preferential
pricing or purchasing terms for franchisees, contributions to the Marketing Fund, franchisee training and educational programs provided by the vendor, rebates paid to us and/or payments to us to support our annual convention or other franchisee meetings. Rebates and other financial considerations from vendors may be flat payments or based on the aggregate amount of franchisee purchases.
We and our affiliates will derive revenues or other material consideration as a result of required purchases or leases by franchisees. We may use any payments, discounts, or other amounts received from suppliers, lessors, or other parties in connection with those arrangements without restriction. We are not required to give you any accounting of those payments, discounts or other amounts or share the benefit of them with you. Any such amounts may be kept by us as compensation for locating and negotiating with suppliers for the System. We do not provide material benefits to franchisees based on their use of designated or approved suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, 360 Painting negotiates distribution and supply arrangements for certain inventory and supplies needed to operate the business. These arrangements may include preferential pricing or purchasing terms for franchisees. They can also include contributions to the Marketing Fund, franchisee training and educational programs provided by the vendor, rebates paid to 360 Painting, and/or payments to 360 Painting to support their annual convention or other franchisee meetings. These rebates and financial considerations can be flat payments or based on the total amount of franchisee purchases.
360 Painting and its affiliates may receive revenues or other material consideration as a result of required franchisee purchases or leases. 360 Painting can use any payments, discounts, or other amounts received from suppliers, lessors, or other parties without restriction. They are not required to provide franchisees with an accounting of these payments, discounts, or other amounts, nor are they required to share the benefit of them with franchisees. 360 Painting may keep these amounts as compensation for locating and negotiating with suppliers for the 360 Painting system. The FDD states that 360 Painting does not provide material benefits to franchisees based on their use of designated or approved suppliers.
For franchisees, this means that while 360 Painting actively seeks to establish beneficial supply arrangements, the direct financial benefits of these arrangements may not always be transparent or directly passed on to the franchisee. A significant portion of the benefits, such as rebates and payments, may be retained by 360 Painting as compensation for their efforts in negotiating these deals. Franchisees should consider this when evaluating the overall cost and benefits of the franchise, and factor in the potential impact of these arrangements on their purchasing decisions and profitability.