To simplify the language in this Disclosure Document, the words “we,” “our” and “us” refer to 360 PAINTING, LLC, the franchisor of this business. The words “you” and “your” refer to the person who buys the Unit Franchise, whether you are an individual or a corporation, limited liability company, or other legal entity. If you are a corporation, limited liability company, or other business entity, certain provisions of this Disclosure Document also apply to your owners and will be noted. 360 Painting, LLC is a limited liability company formed in the State of Delaware on April 1, 2013. Our principal place of business is 630 Peter Jefferson Parkway, Suite 200, Charlottesville, VA 22911. We do business only under our corporate name and the name “360 PAINTING.” As of December 31, 2018, there were 99 360 Painting franchises in the U.S. (and 3 in Canada). Our agents for service of process are listed in Exhibit B to this Disclosure Document. The name and address of our Agent for Service of Process in Delaware is: United States Corporation Agents, Inc., 300 Delaware Ave. Suite 210-A, Wilmington, DE 19801. Our Parent, Predecessors and Affiliates We are 100% owned by Premium Service Brands, LLC, a Delaware entity formed on January 20, 2015, with its principal place of business at 630 Peter Jefferson Parkway, Suite 200, Charlottesville, Virginia, 22911. 1. Our predecessors are 360 Painting, Inc., Professional Painting, LLC, and Painting Pros, LLC. 360 Painting Inc. was a Virginia entity formed on April 21, 2006 with its principal place of business located at 113 S. Columbus Street, Alexandria VA, 22314. All franchise agreements under 360 Painting Inc. were transferred to 360 Painting, LLC soon after 360 Painting, LLC was formed on April 1, 2013. 360 Painting Inc. offered painting franchisees from 2006 until 2013, when the franchise agreements were transferred to 360 Painting, LLC. 360 Painting Inc. was not involved in any other line of business. Professional Painting, LLC was a Delaware limited liability company which operated a business similar to those provided by 360 Painting businesses in the Washington, D.C. area during 2005 and 2006 under the name “Professional Painting.” Professional Painting, LLC, was located at 1940 Duke Street, Suite 200, Alexandria, Virginia 22314. Professional Painting, LLC did not operate any other type of business. In October 2006, 100% of the assets of Professional Painting, LLC were transferred to 360 Painting, Inc. In March 2010, 360 Painting, Inc. purchased 100% of the assets of Painting Pros, LLC, a North Carolina entity, which had operated a painting business for six years. Painting Pros was a franchise system that offered residential and commercial painting services, similar to the services we presently offer. Painting Pros, LLC did not operate any other type of business. Painting Pros principal business address was 4284 Stormy Pointe Court, Denver, NC, 28037. By December 31, 2010, all Painting Pros franchisees offered services under 360 Painting, Inc. 2. Our affiliate companies are Pro-Lift Doors Franchise, LLC, Handyman Pro, LLC Maid Right, LLC, and Kitchen Wise, LLC: 2 Pro-Lift Doors Franchise, LLC (“Pro-Lift Doors”) is a franchise business that offers and sells a full range of residential and commercial overhead garage services under the trademark Pro-Lift Garage Doors. Pro-Lift Doors has been offering franchises since September 1, 2015. Pro-Lift Doors does not offer franchises in any other line of business, does not engage in any other line of business, and does not own or operate any businesses similar to one it franchises. As of December 31, 2018, there were 18 Pro-Lift Doors franchises in the U.S. Our affiliate, Handyman Pro, LLC (“Handyman Pro”) is a franchise business that offers and sells a full range of handyman services for both exterior and interior portions of residences and “light commercial” buildings. Handyman Pro has been offering franchises since April 2018. Handyman Pro does not offer franchises in any other line of business, does not engage in any other line of business, and does not own or operate any businesses similar to the one it franchises. As of December 31, 2018, there were zero Handyman Pro franchises in the U.S. Our affiliate, Maid Right, LLC (“Maid Right”) is a franchise business that offers and sells residential cleaning and related services. Maid Right has been offering franchises since April 2018. Our parent company acquired substantially all of the assets of Maid Right Franchising, LLC, a Delaware limited liability company, on April 13, 2018. Maid Right does not offer franchises in any other line of business, does not engage in any other line of business, and does not own or operate any businesses similar to the one it franchises. As of December 31, 2018, there were 22 Maid Right franchises in the U.S. Our affiliate, Kitchen Wise, LLC (“Kitchen Wise”) is a franchise business that markets, designs, sells and installs custom products and shelving for kitchen and bathroom cabinets and closets. Kitchen Wise has been offering franchises since October 2019. Our parent company acquired substantially all of the assets of Kitchen Wise, LLC, a Wisconsin limited liability company, on October 1, 2019. Kitchen Wise does not offer franchises in any other line of business, does not engage in any other line of business, and does not own or operate any businesses similar to the one it franchises. As of December 31, 2018, there were 3 Kitchen Wise franchises in the U.S.
Chief Executive Officer: Paul Flick Mr. Flick has served as the Chief Executive Officer of 360 Painting, LLC at our headquarters in Charlottesville, Virginia, and its predecessor 360 Painting Inc. since its inception in April 2006. Mr. Flick has also served as the owner of our parent company, Premium Service Brands, LLC, since its creation in January 2015, operating out of Charlottesville, Virginia. VP of 360 Painting – Joel Gotshall Mr. Gotshall has been Vice President of 360 Painting since August 2019. Mr. Gotshall joined Premium Service Brands, the parent company of 360 Painting, in October 2017 as a Franchise Business Coach. Prior to Premium Service Brands, Joel worked for College Pro Painters from January 2103 until October 2017 in West Lafayette, Indiana. There, he ran a franchise for 2 years, followed by 3 years as a General Manager. VP of Franchise Development: Jeff Powell Mr. Powell has served as the VP of Franchise Development of Premium Service Brands, LLC since January 2019. From March 2018 to January of 2019, Jeff served as the Chief Development Officer for InXpress, LLC, a shipping and logistics franchise located in South Jordan, UT. Prior to that, from January 2011 to February 2018, he was the Franchise Recruitment Director and Vice President of Franchise Recruitment at InExpress, LLC. Director of Training: Josh Hoffman Mr. Hoffmann is the Director of Training for Premium Service Brands, LLC and has been with Premium Service Brands, LLC since February 2018. Previously, Mr. Hoffmann worked for College Pro Painters in a number of positions since June 2012, which included being the Franchise Owner / Operator of the St. Charles, IL location as well as the Kansas City, MO location. VP of Franchise Development: Matt Reeves Mr. Reeves joined Premium Service Brands in November 2018 as Vice President of Franchise Development. From 2012 to 2017, he was Vice President of Development at Neighborly Brands in Waco, Texas. Mr. Reeves was also President of Development for Restoration 1 and Bluefrog Plumbing in 2017 and 2018, also in Waco, Texas. VP of Franchise Development: John McLellan Mr. McLellan has served as Vice President of Franchise Development of Premium Service Brands, LLC since October 2019. From 2011 to 2018, he was a franchise consultant with FranNet, which was based in Chicago, Illinois and is currently based in Detroit, Michigan. Vice President of Operations: David Raymond Mr. Raymond joined Premium Service Brands in July 2019 as Vice President of Operations. From October 2018 to June 2019, Mr. Raymond was Vice President of our affiliated, Pro-Lift Garage Doors 5 in Charlottesville, Virginia. From February 2016 to October 2018, Mr. Raymond was President of DoorAbility Inc. in Tampa, Florida. Mr. Raymond was a Senior Franchise Business Consultant at College Hunks Hauling Junk and Moving from August 2015 to December 2018 in Tampa, Florida. He held various positions ending as the General Manager of Discount Garage Doors Inc., located in Tampa, Florida, from 2003 to 2015. President and Chief Development Officer: Greg Longe Mr. Longe serves as the President and Chief Development Officer of Premium Service Brands, LLC since September 2019. From April 2019 to September 2019, Mr. Longe served as Chief Executive Officer of British Swim School in Fort Lauderdale, Florida. Prior to that, Mr. Longe served as a Chief Operating Officer of Martinizing International, LLC in Berkley, Michigan from November 2014 through July 2015. Mr. Longe served as the President of Martinizing International, LLC's President from July 2015 through April 2019, the Chief Operating Officer of Huntington Company in Oradell, New Jersey from November 2014 through April 2019, President of 1-800-DryClean in Ann Arbor, Michigan from March 2013 through April 2019, and the President of P4T (“pressed for time) in Berkley, Michigan from May 2014 to April 2019.
360 PAINTING, LLC grants Unit Franchises to qualified individuals and business entities to establish and operate businesses in conjunction with the service mark “360 Painting” and certain other logos and trademarks (collectively referred to as the “Marks”). We refer to the 360 PAINTING business you will operate as a Unit Franchisee as the “Franchised Business.” We and our predecessor 360 Painting Inc. have offered franchises since September 2006. We do not offer and have not previously offered franchises in any other line of business. Furthermore, we do not operate or own any businesses similar to the Franchised Business. From August 2007 to December 2010, we granted Regional Development Rights to qualified individuals and business entities to solicit and recruit Unit Franchisees for the 360 PAINTING System. The Unit Franchise opportunity is the sole business opportunity offered pursuant to this Disclosure Document and is referred to herein as a “360 PAINTING business.” 360 PAINTING Unit Franchises are businesses that provide residential and commercial painting services. The prototypical 360 PAINTING Unit Franchise offers a full range of painting, decorating and wall finishing services for both exterior and interior portions of residences and “light commercial” buildings. 3 Each 360 PAINTING business must operate in accordance with our “System”. The distinguishing characteristics of the System include among other things, uniform standards and procedures for business operations and management, procedures and strategies for marketing, advertising and promotions, signage, vehicle wrapping, inventory and materials; methods and techniques for painting and wall finishing, methods and techniques for inventory and cost control, the Marks, the Manual, uniform standards, specifications and procedures; record keeping, accounting, billing, collections and account management; all of which are designed to enhance the business and managerial aspects of residential and commercial painting business. We reserve the right to offer special incentive programs at any time in the future which may decrease any of the fees listed in Items 6 and 7 of this Disclosure Document. Generally, these incentive programs will be conditioned upon you executing a Franchise Agreement or opening your Store by a specified date and may only be available for specific Stores or in specified markets which we determine in our sole discretion. We may alter or discontinue these programs at any time in our sole discretion without notice to you. These incentive programs may not be combined with any other offer or program unless indicated by us in writing. Furthermore, if you have executed a Franchise Agreement before the dates specified for the incentive programs, acquired a 360 Painting location from an existing franchisee via a transfer, or are renewing an existing Franchise Agreement, you are not eligible to receive the incentive program.
The franchise fee (“Franchise Fee”) for a 360 PAINTING Unit Franchise is $60,000, which must be paid to us in one-lump sum upon signing the Franchise Agreement. This fee is charged for a license to operate from one location in a specific residential territory called the “Protected Territory.” (See Item 12). The Franchise Fee is uniformly calculated for all franchisees under this offering. All initial fees described above are fully earned when paid and are not refundable under any circumstances. We reserve the right to offer special incentive programs at any time which may decrease any of the fees listed in this Item. Generally, these incentive programs will be conditioned upon you executing a Franchise Agreement and may only be available for specific Unit Franchises or in specified markets which we determine at our sole discretion. We may alter or discontinue these programs at any time at our sole discretion without notice to you. If you have executed a Franchise Agreement before the dates specified for the incentive programs, acquired a Unit Franchise from an existing franchisee via a transfer, or are renewing an existing Franchise Agreement, you are not eligible to participate in the incentive program unless otherwise indicated by us in writing. During our 2018 fiscal year, we offered a special incentive program for U.S. military veterans purchasing a new Franchised Business. Under this program, we offered honorably discharged veterans a 10% discount on the initial franchise fee. Fourteen (14) franchisees took advantage of this discount
We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation.
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. Below is certain historical financial information regarding 360 Painting franchisees that operated in the United States and Canada from January 1, 2018 through December 31, 2018. The historical financial information below is based upon information regarding the actual gross sales of 360 Painting franchisees open for business and operating continuously during calendar year 2018. Some franchisees own more than one territory. The primary characteristic of the represented outlets that may differ from those of a new franchisee is that a new franchisee does not have a customer base immediately, and an existing franchisee receives repeat and referral business from its existing customer base. Of the one hundred and six (106) 360 Painting franchisees, that were open for business and operating in the United States and Canada as of December 31, 2018, seventy-seven (77), or 73%, had been in business continuously during calendar year 2018. No data has been included for franchisees who were terminated, not renewed, reacquired or which left our system for other reasons during calendar year 2018, or for any franchisor owned locations. Fifteen (15) 360 Painting franchises ceased operations for other reasons during calendar year 2018. Zero (0) of the fifteen (15) 360 Painting franchises which ceased operations during calendar year 2018 had been opened for business for less than twelve (12) months. See Item 20 for more information. We do not operate any franchisor owned locations. Some outlets have sold this amount. Your individual results may differ. There is no assurance that you'll sell as much. Average and Median Gross Sales The average gross sales of the seventy-seven (77) 360 Painting franchisees described above during calendar year 2018 was $397,783.21. 56% of the seventy-seven (77) 360 Painting franchisees described above (43 franchisees) actually attained or surpassed the average gross sales of $397,783.21 for calendar year 2018. The median gross sales of the referenced 360 Painting franchisees during calendar year 2018 was $309,749.49, with the highest gross sales of a 360 Painting franchisee during the relevant period being $1,094,783.82, and the lowest being $89,376.12. Gross sales is the amount of all sales of all products and services sold by a 360 Painting franchisee in connection with the franchised business, whether evidenced by cash, credit, check, gift certificate, gift card, script or other property or services, without reserve or deduction for inability or failure to 39 collect and includes income of every kind related to the franchised business. Gross sales do not include sales, use, merchants' or other taxes paid to the government or the value of any approved coupons, discounts and refunds to customers. The market in which you operate your franchise may allow you to charge higher prices or force you to charge lower prices for products or services offered by your franchise, which would ultimately affect your average gross sales. The economic conditions and demographic characteristics in the market in which you operate your franchise may differ substantially from those of the markets in which the seventy-seven (77) 360 Painting franchisees referenced in this Item 19 operated during 2018, and if so those differences may substantially affect the number of sales made by your franchise. We strongly recommend that you make your own independent investigation of whether or not the franchise may be “profitable” and confer with your attorney, accountant, or other business advisor before executing any agreement with us. This disclosure does not include any information concerning the identified franchisees' actual operating expenses. The operating expenses that your franchise incurs will depend on the market conditions for that type of expense in your region. These expenses may include, but are not limited to, painting products, personnel and benefits expenses, utilities, advertising rates, automobile costs, facility leases and insurance and workers compensation. See Paragraph 12 of the CA Addendum for more information. The operating software that we license to 360 Painting franchisees estimates the labor costs and the amount of paint and other inventory that will be required for a particular job based on information inputted by the franchisee. The software then establishes a price for the job equal to 2.22 times the projected cost of labor and supplies, which provides for a projected gross margin equal to forty -five percent (45%) of the cost of labor and supplies. This is not a disclosure of the actual costs of labor or goods sold by our franchisees; rather, it is merely an explanation of the pricing and cost estimating methodology employed by the operating software we license to you. The estimates generated by the software are based on the experience of our officers in operating and information provided to us by active 360 Painting franchisees. However, the actual costs and profit margins of existing 360 Painting franchisees can be determined only though discussions with and disclosures from those franchisees. The figures contained in this Item were compiled by us based upon reports of gross sales provided to us by our franchisees. We have assumed that the franchisees' information is accurate, complete and contains no material misrepresentations or omissions. We have not audited or verified this information. This information has not been separately audited or verified by an independent certified public accountant, and it may not have been prepared on a basis consistent with generally accepted accounting principles. Written substantiation of the financial performance representation in this Item 19 will be made available to you upon reasonable request. Other than the preceding financial performance representation, 360 Painting, LLC does not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Paul Flick, 630 Peter Jefferson 40 Parkway, Suite 200, Charlottesville, VA 22911, the Federal Trade Commission, and the appropriate state regulatory agencies.