After termination or non-renewal of my 360 Painting franchise, must I stop using the 360 Painting system and marks?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Franchise Agreement | Summary you agree to mediate any dispute, controversy or claim before | |
|---|---|---|---|
| bringing suit. | |||
| v. | Choi ce of forum | Section 27.2 | Subject to applicable state law, any mediation or litigation must be pursued in courts located in the county and state in which we maintain our principal place of business (currently the City of Charlottesville, VA). |
| w. | Choi ce of law | Section 27.1 | Subject to applicable state law, Virginia law applies, except disputes over the Marks will be governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sec. 1051 et seq.). |
| Provision | Section in Franchise Agreement | Summary financial report or other data that underestimates fees; multiple defaults within a twelve month period; material default under any other agreement you have with us; or 3 or more failed payments within any 12 month period. | |
| i. | Franchisee's obligations on termination or non renewal | Section 20; Internet Web Sites and Listings Agreement; Telephone Listing Agreement | You must: return all Confidential Information; stop using the System and the Marks and refrain from doing business under a confusing name or manner; pay all sums owed to us; de identify the Vehicles and the Business; cancel or assign to us any assumed names; assign your telephone and facsimile numbers to us; fulfill warranties obligations and either (i) post a bond equal to 0.5% of your gross sales for the last 24 months, or (ii) pay us a fee; comply with the covenants not to compete and any other surviving provisions of the Franchise Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, if your 360 Painting franchise is terminated or not renewed, you are required to cease using the 360 Painting system and marks. Additionally, you must refrain from conducting business under any name or in any manner that could be confusing to customers. This is a standard clause in most franchise agreements to protect the brand's identity and reputation.
In addition to discontinuing the use of the 360 Painting system and marks, you must also return all confidential information to 360 Painting. You are also obligated to pay all outstanding sums owed to 360 Painting. Furthermore, you need to de-identify any vehicles and the business itself, cancel or assign any assumed names to 360 Painting, and assign your telephone and facsimile numbers to them.
To ensure compliance with post-termination obligations, 360 Painting requires you to fulfill all warranty obligations. You must either post a bond equal to 0.5% of your gross sales for the last 24 months or pay 360 Painting a fee. Finally, you must comply with all covenants not to compete and any other provisions of the Franchise Agreement that survive termination or non-renewal. These measures are in place to ensure a clean break and prevent any unfair competition after the franchise relationship ends.