Who designates the independent appraiser to determine the cash equivalent of non-cash consideration for a Beauty Bungalows franchise sale?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
iv. If the offer from a third-party provides for payment of consideration other than cash or involves certain intangible benefits, we may elect to purchase the interest proposed to be sold for the reasonable cash equivalent, or any publicly traded securities, including its own, or intangible benefits similar to those being offered. If the parties cannot agree within a reasonable time on the reasonable cash equivalent of the non-cash part of the offer, then such amount shall be determined by an independent appraiser designated by us, and such appraiser's determination shall be binding.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, in the event that a third-party offer to purchase a franchisee's rights includes consideration other than cash or involves intangible benefits, Beauty Bungalows has the option to purchase the interest for a reasonable cash equivalent, publicly traded securities, or similar intangible benefits.
If Beauty Bungalows and the franchisee cannot agree on the cash equivalent of the non-cash portion of the offer within a reasonable timeframe, an independent appraiser will determine the amount. The selection of this independent appraiser is made by Beauty Bungalows, and the appraiser's determination is binding on both parties.
This clause protects Beauty Bungalows's interests by ensuring they can match a third-party offer even if it involves non-cash assets, while also providing a mechanism for fairly valuing those assets through an independent appraisal process. For a prospective franchisee, this means that if they decide to sell their franchise rights, Beauty Bungalows has the right of first refusal and can match the offer, potentially with a cash equivalent determined by an appraiser chosen by Beauty Bungalows if the original offer includes non-cash elements.