Does 360 Painting retain the right to keep payments received from suppliers as compensation for negotiating with suppliers for the 360 Painting system?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
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 retains the right to keep payments, discounts, or other amounts received from suppliers, lessors, or other parties in connection with arrangements made for the benefit of the franchise system. These funds are not required to be accounted for or shared with franchisees and may be kept by 360 Painting as compensation for locating and negotiating with these suppliers.
This arrangement means that 360 Painting franchisees will not directly benefit from any rebates, discounts, or other financial considerations that 360 Painting receives from suppliers. While these negotiations may result in preferential pricing or purchasing terms for franchisees, the direct monetary benefits go to 360 Painting. This is a common practice in franchising, where franchisors often negotiate with suppliers on behalf of the entire system and receive compensation for their efforts.
For a prospective 360 Painting franchisee, this means that while 360 Painting is incentivized to negotiate favorable terms with suppliers, the franchisee will not see a direct reduction in costs due to supplier rebates or discounts. Instead, 360 Painting benefits directly from these financial arrangements. Franchisees should consider this when evaluating the overall cost structure and potential profitability of a 360 Painting franchise. It is important to note that 360 Painting does not provide material benefits to franchisees based on their use of designated or approved suppliers.
In 2024, 360 Painting derived $935,482 from franchisee purchases and leases, which represented 11.61% of their total revenue of $10,745,617. This demonstrates the financial significance of these supplier arrangements to 360 Painting's overall revenue stream. Franchisees should be aware of this revenue model and how it might influence 360 Painting's decisions regarding supplier relationships and product/service offerings.