What is the potential consequence for a 360 Painting franchisee who fails to implement a remediation plan instituted by the franchisor during a Crisis Management Event?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
ndors and the general public adhere to the highest standards of honesty, fair dealing and ethical conduct. If Franchisor deems that Franchisee did not fairly handle or resolve (in a manner that meets Franchisor's standards) a customer complaint, Franchisor has the right to intervene and address such customer complaint (as Franchisor may deem appropriate). Franchisor has the right to terminate this Agreement for repeated violations of this Section 9.9. Franchisee shall reimburse Franchisor for all costs incurred by Franchisor in providing or arranging service for a customer of the Business pursuant to this Section 9.9. Further, upon the occurrence of any event that occurs at or otherwise involves the Business, or that occurs generally at a local, regional, national or even global scale, which has or may cause harm or injury to customers or employees, such as contagious diseases, natural disasters, terrorist acts, shootings or other acts of violence, or any other similar circumstance which may materially and adversely affect the System or the goodwill symbolized by the marks
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, a 360 Painting franchisee's failure to implement a remediation plan instituted by the franchisor during a Crisis Management Event can lead to the termination of their Franchise Agreement. A "Crisis Management Event" is defined as an event that occurs at or involves the business, or occurs generally on a local, regional, national, or global scale, which may cause harm or injury to customers or employees. Examples include contagious diseases, natural disasters, terrorist acts, shootings or other acts of violence, or any other similar circumstance which may materially and adversely affect the 360 Painting system or the goodwill symbolized by its marks.
In the event of a Crisis Management Event, the franchisee must immediately inform 360 Painting by telephone or electronic means and fully cooperate with 360 Painting's response. The franchisee is obligated to implement any remediation plan instituted by 360 Painting, which may include a temporary closure of the business.
Repeated violations of Section 9.9 of the franchise agreement, which outlines these obligations, gives 360 Painting the right to terminate the agreement. This means that a franchisee who does not comply with the franchisor's required remediation plan during a crisis risks losing their franchise. This underscores the importance of franchisees maintaining open communication with 360 Painting and adhering to the franchisor's directives during unforeseen events to protect the brand and ensure the safety of customers and employees.