Does 360 Painting's reimbursement of legal expenses include the franchisee's costs for removing signage?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
We will reimburse you for all of your expenses reasonably incurred in any legal proceeding disputing your authorized use of any Mark, but only if you notify us of the proceeding in a timely manner and you have complied with our directions with regard to that proceeding. We have the right to control the defense and settlement of that proceeding. Our reimbursement does not include your expenses for removing signage or discontinuing your use of any Mark. Our reimbursement also does not apply to any disputes where we challenge your use of a Mark. Our reimbursement does not apply to legal fees you incur in seeking separate, independent legal counsel.
Source: Item 13 — TRADEMARKS (FDD pages 39–41)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, under certain circumstances, 360 Painting will reimburse a franchisee for legal expenses incurred in proceedings disputing the franchisee's authorized use of a mark. However, this reimbursement is conditional. The franchisee must notify 360 Painting of the proceeding in a timely manner and comply with 360 Painting's directions regarding the proceeding. 360 Painting retains the right to control the defense and settlement of any such proceeding.
Importantly, 360 Painting's reimbursement explicitly does not include the franchisee's expenses for removing signage or discontinuing the use of any mark. Additionally, reimbursement does not apply to disputes where 360 Painting challenges the franchisee's use of a mark, or for legal fees the franchisee incurs seeking separate, independent legal counsel.
This policy has significant implications for prospective franchisees. While 360 Painting offers some protection against legal challenges to trademark use, franchisees should be aware of the limitations. They will be responsible for covering the costs of removing or changing signage if required, as well as any legal fees incurred if they seek independent counsel or if the dispute involves 360 Painting challenging their mark usage. Franchisees should factor these potential costs into their financial planning and understand the circumstances under which they would be responsible for these expenses.
In the franchise industry, it is not uncommon for franchisors to offer some level of legal support or reimbursement related to trademark protection. However, the specific terms and conditions can vary widely. Franchisees should carefully review the trademark section of the FDD and consult with an attorney to fully understand their rights and obligations.