At what value can Augusta Lawn Care purchase the inventory and equipment of a terminated Augusta Lawn Care franchise?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) Augusta Lawn Care, or its designee, has an option to purchase the business from You, including but not limited to any or all of the physical assets of the Augusta Lawn Care Business, including its equipment, supplies and inventory, during a period of sixty (60) days following the effective date of termination.
If Augusta Lawn Care notifies You that it (or its designee) wishes to purchase the assets of the business from You following Termination of this Agreement, You must immediately surrender possession of the Augusta Lawn Care Business to Augusta Lawn Care or Its designee upon demand.
Augusta Lawn Care or its designee will operate the Augusta Lawn Care Business at its expense pending determination of the purchase price as set forth below.
The equipment, supplies, and inventory will be valued as follows:
- i.
The lower of depreciated value or fair market value of the equipment supplies and inventory; and
ii. Depreciated value of other tangible personal property calculated on the straight-line method over a five (5) year life, less any liens or encumbrances.
Augusta Lawn Care must send written notice to You within thirty (30) days after termination of this Agreement of its (or its designee s) election to exercise the option to purchase. If the parties do not agree on a price within the option period, the option period may be extended for up to fifteen (15) business days to permit appraisal by an independent appraiser who is mutually satisfactory to the parties. If the parties fail to agree upon an appraiser within the specified period, each will appoint an appraiser and the two appraisers thus appointed must agree on a third appraiser within ninety (90) days after termination who must determine the price for the physical assets of the Augusta Lawn Care Business in accordance with the standards specified above. This determination will be final and binding upon both Augusta Lawn Care, or Augusta Lawn Care's designee, as applicable, and You.
Augusta Lawn Care or its designee may exclude from the assets appraised any signs, equipment, inventory, and materials that are not reasonably necessary (in function or quality) to the operation of the Augusta Lawn Care Business, or that Augusta Lawn Care has not approved as meeting Augusta Lawn Care's thencurrent standards, the purchase price determined by the appraisal will reflect such exclusions (the "Purchase Price").
The Purchase Price shall be paid at a closing date not later than ninety (90) days after determination. Augusta Lawn Care has the right to offset against the Purchase Price any and all amounts that You or Your Related Parties owe Augusta Lawn Care and/or its Related Parties. At closing, You agree to deliver instruments transferring (i) good and marketable title to the assets purchased, free and clear of all liens and encumbrances, with all sales and transfer taxes paid by You (ii) all licenses and permits related to the business which can be assigned, (iii) the leasehold interest in the Approved Location, (iv) a release agreement signed by You and Your Related Parties in a form and substance acceptable to Augusta Lawn Care, and (v) such other documentation as we may reasonably request.
(h) Augusta Lawn Care (or its designee) has an option to replace You as lessee under any equipment lease or note for equipment that is used in connection with the Augusta Lawn Care Business. Upon request by Augusta Lawn Care, You shall give Augusta Lawn Care or its designee copies of the leases for all equipment used in the Augusta Lawn Care Business immediately upon termination. Upon request by Augusta Lawn Care, You shall allow Augusta Lawn Care and/or its designee the opportunity, at a mutually satisfactory time, to inspect the leased equipment. Augusta Lawn Care must request the information and access described in this paragraph within fifteen (15) days after termination. It must advise You of its (or its designee's) intention to exercise the option within fifteen (15) days after it has
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–35)
What This Means (2025 FDD)
According to Augusta Lawn Care's 2025 Franchise Disclosure Document, Augusta Lawn Care has the option to purchase the business assets of a terminated franchise. This includes equipment, supplies, and inventory. The valuation of these items will be the lower of either their depreciated value or their fair market value. Other tangible personal property will be valued at its depreciated value, calculated using the straight-line method over a five-year life, minus any existing liens or encumbrances.
Augusta Lawn Care must notify the franchisee in writing within 30 days of the franchise agreement's termination if they intend to exercise this purchase option. If both parties cannot agree on a price within the initial option period, they can extend it by up to 15 business days to allow for an independent appraisal. This appraiser must be mutually agreed upon. If they still cannot agree on an appraiser, each party will appoint their own, and those two appraisers will then select a third appraiser within 90 days of termination to determine the final price. This determination by the third appraiser will be binding on both Augusta Lawn Care and the franchisee.
Augusta Lawn Care can exclude any assets from the appraisal that are not reasonably necessary for the business's operation or do not meet the company's current standards. The final purchase price will reflect these exclusions. Augusta Lawn Care has the right to offset any amounts owed by the franchisee against the purchase price. The purchase must be completed no later than 90 days after the price is determined.
The franchisee is responsible for transferring clear title to the purchased assets, free of liens and encumbrances, and for paying all sales and transfer taxes. They must also transfer any assignable licenses and permits, the leasehold interest in the approved location, and a release agreement. Additionally, Augusta Lawn Care also has the option to replace the franchisee as the lessee on any equipment leases or notes, assuming future obligations under the lease, which would release the franchisee from those future obligations if permitted by the lease terms.