Does Aw have the duty to purchase assets upon termination or expiration of the Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.7 Purchase of Assets. Upon termination or expiration of this Agreement, we shall have the right (but not the duty), to be exercised by notice of intent to do so within thirty (30) days after termination or expiration, to purchase for cash any or all fixtures, furniture, equipment, inventory, products, supplies, signs, and all items bearing the Marks, at your cost or fair market value, whichever is less. If the parties cannot agree on fair market value within a reasonable time, an independent appraiser acceptable to you shall be designated by us, and the designated appraiser's determination shall be binding. If we elect to exercise any option to purchase herein provided we shall have the right to set off all amounts due from you under this Agreement, and the cost of the appraisal, if any, against any payment therefore.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw does not have a duty to purchase a franchisee's assets upon termination or expiration of the franchise agreement. Instead, Aw has the right, but not the duty, to purchase certain assets.
If Aw chooses to exercise this right, they must notify the franchisee within thirty days of the termination or expiration of the agreement. The assets Aw may purchase include fixtures, furniture, equipment, inventory, products, supplies, signs, and all items bearing Aw's marks. The purchase price will be the franchisee's cost or the fair market value of the assets, whichever is less.
If the franchisee and Aw cannot agree on the fair market value, Aw will designate an independent appraiser acceptable to the franchisee to determine the value, and this determination will be binding. Aw also has the right to offset any amounts the franchisee owes to Aw under the agreement, as well as the cost of the appraisal, against any payment for the assets.