What assets can Bens Soft Pretzels purchase from a franchisee upon termination or expiration?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary | |
|---|---|---|---|
| o. | Franchisor’s option to purchase franchisee’s business | Section 14B | Option to purchase some or all equipment, supplies, inventory, advertising materials and any items with our logo, for cash at fair market value, exercisable up to 90 days after termination or expiration. If no agreement on fair market value, an appraiser appointed by us will decide. |
B. Purchase Option. We have the right to purchase or designate a third party that will purchase all or any portion of the assets of your Store that are owned by you or any of your affiliates including, without limitation, the land, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory of the Store at a price determined by a qualified appraiser (or qualified appraisers if one party believes it is better to have a real estate appraiser appraise the value of the land and building and a business appraiser appraise the Store's other assets) selected with the consent of both parties, provided we give you written notice of our preliminary intent to exercise our purchase rights under this Paragraph within 30 days after the date of the expiration or termination of this Agreement, or the expiration of any Interim Period. If the parties cannot agree upon the selection of an appraiser(s), one or both will be appointed by a Judge of the United States District Court for the District in which the Store is located upon petition of either party.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–37)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, Bens Soft Pretzels has the option to purchase certain assets from a franchisee upon termination or expiration of the franchise agreement. Specifically, Bens Soft Pretzels can purchase some or all of the franchisee's equipment, supplies, inventory, advertising materials, and any items with the Bens Soft Pretzels logo. This option is exercisable for cash at fair market value within 90 days after the termination or expiration date.
If the franchisee and Bens Soft Pretzels cannot agree on the fair market value of the assets, Bens Soft Pretzels will appoint an appraiser to determine the value. This valuation process ensures that the franchisee receives a fair price for the assets being purchased.
In addition to the items listed in Item 17, Item 22 indicates that Bens Soft Pretzels has the right to purchase all or any portion of the assets of your Store that are owned by you or any of your affiliates including, without limitation, the land, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory of the Store. The price will be determined by a qualified appraiser selected with the consent of both parties. Bens Soft Pretzels must give you written notice of their preliminary intent to exercise their purchase rights within 30 days after the date of the expiration or termination of this Agreement.
It is fairly typical in franchising for the franchisor to have the option to purchase a franchisee's assets upon termination or expiration, as it allows the franchisor to maintain control over the brand and ensure a smooth transition. However, franchisees should pay close attention to the valuation methods and timelines outlined in the franchise agreement to protect their interests.