Under what conditions can Bens Soft Pretzels exercise its option to purchase a franchisee's business?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
The price determined by the appraiser(s) will be the reasonable fair market value of the assets based on their continuing use in, as, and for the operation of a BEN'S SOFT PRETZELS Store and the appraiser will designate a price for each category of asset (e.g., land, building, equipment, fixtures, etc.), but shall not include the value of any goodwill of the business, as the goodwill of the business is attributable to the Trademarks and the System.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–37)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, Bens Soft Pretzels has the option to purchase a franchisee's business under specific conditions related to the expiration or termination of the Franchise Agreement. Bens Soft Pretzels can exercise this right by providing written notice of their intent to purchase the assets of the store within 30 days after the expiration or termination of the agreement, or the expiration of any Interim Period. This option allows Bens Soft Pretzels to maintain control over the location and assets of a store when a franchise agreement ends.
The assets subject to purchase include all or any portion of the franchisee's store assets, such as land, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory. The purchase price is determined by a qualified appraiser selected with the consent of both parties. If an agreement on the appraiser cannot be reached, a judge from the United States District Court for the district in which the store is located will appoint one or both appraisers upon petition of either party.
The price determined by the appraiser(s) will be the reasonable fair market value of the assets based on their continuing use as a Bens Soft Pretzels store. The appraiser will designate a price for each category of asset, such as land, building, equipment, and fixtures. However, the valuation will not include the goodwill of the business, as the goodwill is attributed to the Bens Soft Pretzels trademarks and system. This ensures that the franchisee is compensated for the tangible assets but not for the brand's inherent value.