If the 1 800 Packouts franchisee owns the Facility, what options does 1 800 Packouts have regarding the Facility?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Upon termination of this Agreement for any reason (other than your termination in accordance with Section A. (By Franchisee)) or expiration of this Agreement without our and your signing a successor franchise agreement, we have the option, exercisable by giving you written notice within 15 days after the date of termination or expiration (the "Exercise Notice"), to purchase the inventory, supplies, Operating Assets, and other assets used in the operation of the Franchised Business that we designate (the "Purchased Assets"). We have the unrestricted right to exclude any assets we specify relating to the Franchised Business from the Purchased Assets and not acquire them. You agree to provide us the financial statements and other information we reasonably require, and to allow us to inspect the Franchised Business and its assets, to determine whether to exercise our option under this Section B. If you or one of your affiliates owns the Facility, we may elect to include a fee simple interest in the Facility and its premises as part of the Purchased Assets or, at our option, lease the Facility from you or that affiliate for an initial five-year term with one renewal term of five years (at our option) on commercially reasonable terms. You (and your Owners) agree to cause your affiliate to comply with these requirements. If you lease the Facility from an unaffiliated lessor, you agree (at our option) to assign the lease to us or to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the lease.
- (2) While we are deciding whether to exercise our option under this Section B. (Our Right to Purchase Assets), and, if we do exercise that option, during the period beginning with our delivery of the Exercise Notice and continuing through the closing of our purchase or our decision not to complete the purchase, you must continue to operate the Franchised Business in accordance with this Agreement. However, we may, at any time during that period, assume the management of the Franchised Business
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, if a franchisee or their affiliate owns the facility, 1 800 Packouts has the option to purchase the facility at the end of the franchise agreement. This condition applies upon termination or expiration of the agreement, unless the franchisee terminates the agreement themselves or a successor agreement is signed.
1 800 Packouts can choose to include the facility as part of the Purchased Assets. Alternatively, 1 800 Packouts has the option to lease the facility from the franchisee or their affiliate. The lease would be for an initial five-year term, with an option for 1 800 Packouts to renew for another five years, based on commercially reasonable terms. The franchisee is obligated to ensure their affiliate complies with these requirements.
During the period when 1 800 Packouts is deciding whether to exercise its option to purchase the assets, the franchisee must continue to operate the franchised business according to the franchise agreement. However, 1 800 Packouts retains the right to assume management of the franchised business during this period.