How does Card My Yard handle gains or losses resulting from the disposal of property and equipment?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
ondition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities affecting the assets, contingent or otherwise; and a general release.
- (2) If we exercise our option under subsection (1) to acquire the assets of the Card My Yard business from you, the purchase price for your yard letters and yard signs will be zero ($0), and the purchase price for the other Card My Yard business assets we wish to acquire will be their fair market value, determined in a manner consistent with reasonable depreciation of the Card My Yard business' leasehold improvements, equipment, fixtures, furnishings, signs, materials and supplies. The age and condition of the improvements, equipment, fixtures, furnishings, decor, and signs of the Card My Yard business, will also be considered in determining the fair market value. We may exclude from the assets we elect to purchase cash or its equivalent and any leasehold improvements, equipment, fixtures, furnishings, signs, materials and supplies that are not necessary or appropriate (in function or quality) to the Card My Yard business' operation or that we have not approved as meeting the standards for Card My Yard businesses, and the purchase price will reflect such exclusions.
- (3) If we and you are unable to agree on the fair market value of the Card My Yard business' assets, or the fair rental value of theFranchise Location, such fair market value (or fair rental value) will be determined by th
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the document does not explicitly address how Card My Yard handles gains or losses from the disposal of property and equipment. However, it does provide information on the franchisor's option to purchase a franchisee's assets upon termination, which indirectly relates to the valuation and potential disposal of assets.
Specifically, if Card My Yard exercises its option to acquire the assets of the franchisee's business, the purchase price for the yard letters and yard signs will be zero dollars ($0). The purchase price for other assets will be their fair market value, determined in a manner consistent with reasonable depreciation of the Card My Yard business' leasehold improvements, equipment, fixtures, furnishings, signs, materials, and supplies. The age and condition of these items will also be considered when determining fair market value. Card My Yard may exclude assets that are not necessary or appropriate for the business's operation or that do not meet the franchisor's standards.
In the event that the franchisee and franchisor cannot agree on the fair market value of the assets, the fair market value will be determined by three independent appraisers. Each party will appoint one appraiser, and those two appraisers will then appoint the third.
Since the FDD does not directly discuss the accounting treatment of gains or losses from asset disposal, prospective franchisees should seek clarification from Card My Yard regarding their policies and procedures for handling such financial matters. Understanding this aspect is crucial for financial planning and managing the business effectively.