Five Star Painting Franchise

Financing Details

Five Star Painting may offer to finance a portion of the initial franchise fee for qualified prospective franchisees. The decision to provide financing is based on the franchisee's creditworthiness, available collateral, and the franchisor's current financing policies. Financing is not available for transactions involving brokers. The franchisor typically finances up to 70% of the initial franchise fee, but may, at its discretion, finance up to 80% for franchisees who meet specific additional requirements. Interest rates are tiered based on the franchisee's credit score, ranging from 12% annually for scores under 600 down to 9% for scores of 700 or more. Repayment terms vary from up to 5 years for loans under $45,000 to 9 years for loans over $150,000. Franchisees must sign a promissory note and a security agreement, granting the franchisor a security interest in all business assets. Payments are made monthly via automatic bank draft. Franchisees can prepay the note at any time without penalty. Default on the note or franchise agreement can result in the entire balance becoming due, and the franchisee may be liable for collection costs and attorney's fees, and the franchise agreement may be terminated. The franchisor may also sell or assign the promissory note to a third party. While Five Star Painting may refer franchisees to third-party lenders, it does not guarantee these third-party obligations.

Litigation Summary

Five Star Painting has a legal history involving several cases. In 2010, its predecessor, Five Star Painting LLC, faced an investigation by the Illinois Attorney General for an unregistered franchise sale in 2008. This was resolved with a $7,500 penalty and a rescission offer. Another affiliate's predecessor, FOR Franchising LLC (Window Genie), settled an administrative order in California in 2017 for failing to submit advertisements, paying a $5,000 penalty and requiring remedial training. Molly Maid, another affiliate's predecessor, settled a Kansas Consumer Protection Act violation in 2010 related to background checks and gift certificate sales, paying $25,000 in civil penalties and $25,175 in costs. More recently, in 2024, Five Star Painting SPV LLC initiated three separate lawsuits against franchisees in Texas, all focused on collecting monies owed. These lawsuits were filed against Charles Welz and Debra Gitty Weiss, Stephen Robert Nesta Marley, and TDS Home, LLC, Tommy David Sternod, and Lisa Lundberg Sternod.

Renewal Conditions

To renew their franchise agreement, Five Star Painting franchisees must meet several conditions: they must provide written notice of their intent to renew between 180 and 240 days before the current term expires. They need to be in good standing, meaning they have not defaulted on their current agreement or any related agreements, have met all financial and other significant obligations on time, received no more than two written default notices, and have not failed to meet the Minimum Performance Standards for any two calendar years or measurement periods during the term. Franchisees must also comply with the franchisor's then-current training requirements, sign a general release of claims for themselves and their guarantors, and pay a renewal fee of $5,000. They will also be required to sign the then-current version of the franchise agreement, which may have materially different terms, conditions, and fees.