When is the Warranty Assurance fee due for a 360 Painting franchise?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Warranty Assurance | $10,000 | On termination or expiration | To ensure that any customer warranties you issued during the term are honored, you must post a bond in an amount equal to 0.5% of your Gross Sales for the 24 months before termination or expiration or (if the amount of the bond would be less than $10,000) pay us $10,000. |
Source: Item 6 — OTHER FEES (FDD pages 18–21)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the Warranty Assurance fee is due upon termination or expiration of the franchise agreement. The fee is structured to ensure that any customer warranties issued during the franchise term are honored.
The standard amount for the Warranty Assurance is $10,000. However, the FDD states that 360 Painting may instead require a bond equal to 0.5% of the franchisee's gross sales for the 24 months before termination or expiration, if that amount is greater than $10,000. This provides some flexibility depending on the franchisee's sales volume in the period leading up to the end of the agreement.
This fee is important for prospective franchisees to consider as it represents a potentially significant cost at the end of their franchise term. Franchisees should factor this into their financial planning and understand the conditions under which the bond or the flat fee would apply. It is also important to note that this fee is intended to cover the cost of honoring existing warranties, which highlights the importance of providing quality service and managing warranty obligations throughout the franchise term.