Can the terms and conditions of the renewal 360 Painting Franchise Agreement differ from the initial agreement?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
han nine months prior to the expiration of the Initial Term;
- (ii) Franchisee is not, when notice is given, and does not become prior to the expiration of the Initial Term, in default of any provision of this Agreement or any other agreement between Franchisee and Franchisor or its subsidiaries or affiliates or with any other creditor or supplier of the Business, and Franchisee must have consistently complied with all the terms and conditions of this Agreement and all such other agreements throughout their terms;
- (iii) Franchisee shall execute, at Franchisor's option, Franchisor's then-current form of Franchise Agreement, which Franchise Agreement shall supersede in all respects and may contain terms and conditions substantially different from those set forth herein, including, without limitation: (a) additional fees and/or an increase in any or all Continuing Fees (as such term is hereinafter defined), (b) a change in the size or composition of the Protected Territory, (c) the renewal Franchise Agreement shall only provide for the number of additional renewal terms called for by this Agreement, and (d) mandatory minimum periodic royalty requirements that, in Franchisor's determination, take into account the thencurrent market, the maturity of the Business and its record of Gross Sales during the term;
- (iv) Franchisee shall pay a renewal fee equal to twenty-five percent (25%) of the thencurrent Franchise Fee (as such term is hereinafter defined) or Fifteen Thousand ($15,000), whichever is greater; provided, however, that Franchisee shall not also be required to pay an initial franchise fee under such renewal Franchise Agreement;
- (v) Franchisee shall complete, at its own expense and to Franchisor's satisfaction, all maintenance, updating, refurbishing and replacement of the Vehicles and all maintenance, refurnishing, renovation, modernizing and remodeling of the Bu
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, the terms and conditions of the renewal franchise agreement can differ substantially from the initial agreement. 360 Painting has the option to require franchisees to execute the then-current form of the Franchise Agreement, which may supersede the original agreement in all respects.
These changes may include, but are not limited to, additional fees or increases in existing continuing fees. The size or composition of the protected territory could also be altered. The renewal agreement will only provide the number of additional renewal terms called for by the initial agreement. Furthermore, 360 Painting may implement mandatory minimum periodic royalty requirements, adjusting for market conditions, the business's maturity, and its gross sales record during the initial term.
To renew the franchise, the franchisee must pay a renewal fee equal to 25% of the then-current franchise fee or $15,000, whichever is greater. The franchisee will not be required to pay an initial franchise fee under the renewal agreement. The franchisee is also responsible for all maintenance, updating, refurbishing, and replacement of vehicles, as well as the maintenance, refurnishing, renovation, modernizing, and remodeling of the business to meet 360 Painting's current image and standards. Franchisees must also be current on all payments to 360 Painting, its affiliates, subsidiaries, lessors, vendors, and suppliers and must have consistently met these obligations throughout the initial term.