Under what condition is it unlawful for 360 Painting to repurchase a franchisee's business during the term of the franchise agreement?

According to the 2025 FDD, Section 13.1-564 of the Virginia Retail Franchising Act stipulates that it is unlawful for 360 Painting to cancel a franchise agreement without reasonable cause in Virginia. This means that if any of the reasons for default or termination listed in the 360 Painting franchise agreement do not meet the definition of "reasonable cause" under Virginia law, then 360 Painting cannot enforce that provision to cancel the agreement.

For a prospective 360 Painting franchisee in Virginia, this provides a degree of protection against arbitrary or unfair termination by the franchisor. The franchisee should carefully review the franchise agreement, particularly the sections on default and termination, and compare them to the Virginia Retail Franchising Act to ensure compliance. If a franchisee believes that 360 Painting is attempting to terminate the agreement without reasonable cause, they may have legal recourse under Virginia law.

This type of protection is not uniform across all states, as franchise laws vary considerably. Franchisees in other states may not have the same level of protection against termination without cause. Therefore, it is essential for prospective franchisees to understand the specific franchise laws in their state and how they affect the franchise agreement.

It is important to note that this clause specifically addresses cancellation of the franchise agreement, which is distinct from non-renewal at the end of the term. The conditions for non-renewal may be different and are not addressed in this particular section.