How is the purchase price for the Purchased Assets of my 1 800 Packouts franchise determined?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
ise 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
ourselves or appoint a third party (who may be our affiliate) to manage the Franchised Business pursuant to the terms of Section -8.
- (3) The purchase price for the Purchased Assets will be their fair market value for use in the operation of a Competitive Business (but not a Franchised Business). However, the purchase price will not include any value for any rights granted by this Agreement, goodwill attributable to the Marks, our brand image, any Confidential Information or our other intellectual property rights, or participation in the network of Franchised Businesses. For purposes of determining the fair market value of all equipment used in operating the Franchised Business, the equipment's useful life shall be determined to be no more than three years. If we and you cannot agree on fair market value for the Purchased Assets, we will select an independent appraiser after consultation with you, and his or her determination of fair market value will be the final and binding purchase price.
- (4) If we elect to exercise our purchase option, we will pay the purchase price at the closing, which will take place within 60 days after the purchase price is determined, although we may decide after the purchase price is determined not to complete the purchase. We may set off against the purchase price, and reduce the purchase price by, any and all amounts you owe us or our affiliates.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the purchase price for the Purchased Assets, which include inventory, supplies, Operating Assets, and other assets used in the operation of the Franchised Business, will be their fair market value if 1 800 Packouts exercises its option to purchase them upon termination or expiration of the franchise agreement. This valuation is specifically for use in the operation of a Competitive Business, but not a 1 800 Packouts Franchised Business. The fair market value determination excludes any value for rights granted by the franchise agreement, goodwill attributable to the Marks, brand image, Confidential Information, intellectual property rights, or participation in the network of Franchised Businesses. For equipment, the useful life is capped at no more than three years when determining fair market value.
If you and 1 800 Packouts cannot agree on the fair market value, an independent appraiser will be selected after consultation with you. The appraiser's determination of fair market value will then be the final and binding purchase price.
1 800 Packouts will pay the purchase price at the closing, which will occur within 60 days after the purchase price is determined. However, 1 800 Packouts retains the right to decide not to complete the purchase even after the price is set. Furthermore, 1 800 Packouts can offset any amounts you owe them or their affiliates against the purchase price, reducing the final amount you receive. 1 800 Packouts is also entitled to customary representations, warranties, and indemnities in the asset purchase, covering aspects like ownership, condition, title, liens, validity of contracts, and liabilities affecting the assets.