Can 360 Painting specify and change the form and content of notices used by the franchisee?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.4 Infringement. Franchisee shall promptly inform Franchisor in writing of any infringement or imitations of any Marks, the System, or any act of unfair competition against Franchisor or Franchisee as to which Franchisee has knowledge. Franchisee shall not make any demand or serve any notice, orally or in writing, or institute any legal action or negotiate, compromise or settle any controversy with respect to any such infringement or unfair competition without first obtaining Franchisor's written consent. Franchisor shall have the exclusive right to institute, negotiate, compromise, settle, dismiss, appeal or otherwise handle any such action and take such steps as it may deem advisable to prevent any such action and to join Franchisee and any other franchisees as a party to any such action to which Franchisor may be a party and to which Franchisee is or would be a necessary or proper party, but nothing herein shall be construed to obligate Franchisor to seek recovery of costs or damages of any kind in any such litigation, the assertion or waiver of such claims being within the sole discretion of Franchisor. The costs of any such action shall be paid by Franchisor, and any recovery obtained from such infringers shall be paid to Franchisor.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, franchisees are not allowed to make demands or serve notices, either orally or in writing, or start any legal action regarding infringements or unfair competition without first getting written consent from 360 Painting. 360 Painting has the exclusive right to handle any such action, including instituting, negotiating, compromising, settling, dismissing, or appealing. 360 Painting can also take steps to prevent such actions and involve franchisees in any action to which 360 Painting is a party. However, 360 Painting is not obligated to recover costs or damages in any litigation, as the decision to assert or waive such claims is at 360 Painting's sole discretion. The costs of any such action will be paid by 360 Painting, and any recovery from infringers will be paid to 360 Painting.
This means that if a 360 Painting franchisee becomes aware of any potential infringement on the 360 Painting trademarks or system, they must report it to 360 Painting but cannot take any independent action. This protects the brand by ensuring that all legal actions are managed consistently by the franchisor.
This approach is fairly typical in franchising, as it allows the franchisor to maintain control over the brand's image and legal strategy. However, it also means that franchisees must rely on 360 Painting to take appropriate action, and they may not have direct control over the outcome of any legal proceedings.