What was the subject of the Illinois Attorney General's investigation into 360 Painting?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
es accepted the rescission offer.
In the Matter of 360 Painting, LLC, No. 20-AVC-F001, investigation by Illinois Attorney General's Office. In January 2020, the Illinois Attorney General's Office began an investigation of potential violations of the Illinois Franchise Disclosure Act by 360 Painting regarding its failure to obtain a signed Illinois amendment to the franchise agreement for Illinois franchises between April 2017 and December 2019. 360 Painting did not contest that Illinois amendments were not executed by Illinois franchisees during this period, but asserted that: (a) each Illinois franchisee received a properly registered franchise disclosure document, including an addendum to the disclosures and an amendment to the franchise agreement containing modifications required by Illinois law; and (b) because each franchisee received the required disclosures, the failure to obtain executed amendments from each franchisee could not have affected the franchisees' decision to purchase the franchise. The Illinois Attorney General asserted that because 360 Painting brought suit against an Illinois franchisee in Virginia (before unilaterally dismissing the case by filing a Motion to Non-Suit), Illinois franchisees were harmed. On May 22, 2020, 360 Painting entered into an Assurance of Voluntary Compliance ("AVC"), under which 360 Painting agreed to offer affected franchisees the opportunity to rescind their franchise agreements, make a $6,000 payment to the state, disclose the AVC in its disclosure document, and comply with the Illinois Franc
Source: Item 3 — LITIGATION (FDD pages 13–18)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the Illinois Attorney General's Office investigated potential violations of the Illinois Franchise Disclosure Act. The investigation, which began in January 2020, focused on 360 Painting's failure to obtain signed Illinois amendments to the franchise agreement for Illinois franchises between April 2017 and December 2019.
360 Painting acknowledged that the Illinois amendments were not executed by Illinois franchisees during the specified period. However, 360 Painting asserted that each Illinois franchisee received a properly registered franchise disclosure document, including an addendum to the disclosures and an amendment to the franchise agreement containing modifications required by Illinois law. 360 Painting argued that because each franchisee received the required disclosures, the failure to obtain executed amendments could not have affected the franchisees' decision to purchase the franchise.
The Illinois Attorney General contended that because 360 Painting brought suit against an Illinois franchisee in Virginia (before dismissing the case), Illinois franchisees were harmed. As a result, on May 22, 2020, 360 Painting entered into an Assurance of Voluntary Compliance (AVC). Under the AVC, 360 Painting agreed to offer affected franchisees the opportunity to rescind their franchise agreements, make a $6,000 payment to the state, disclose the AVC in its disclosure document, and comply with the Illinois Franchise Disclosure Act in the future. This indicates the importance of adhering to state-specific franchise regulations and ensuring all required documents are properly executed to avoid potential legal issues and financial penalties.