What assets can Care Plus Medical Ucc purchase when the agreement expires or is terminated?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.6 Purchase Option. When this Agreement expires or is terminated, Care Plus Medical UCC will have the right (but not the obligation) to purchase any or all of the assets related to the Business, and/or to require Franchisee to assign its lease or sublease to Care Plus Medical UCC.
To exercise this option, Care Plus Medical UCC must notify Franchisee no later than 30 days after this Agreement expires or is terminated.
The purchase price for all assets that Care Plus Medical UCC elects to purchase will be the lower of (i) the book value of such assets as declared on Franchisee's last filed tax returns or (ii) the fair market value of the assets.
If the parties cannot agree on fair market value within 30 days after the exercise notice, the fair market value will be determined by an independent appraiser reasonably acceptable to both parties.
The parties will equally share the cost of the appraisal.
Care Plus Medical UCC's purchase will be of assets only
(free and clear of all liens), and the purchase will not include any liabilities of Franchisee. The purchase price for assets will not include any factor or increment for any trademark or other commercial symbol used in the business, the value of any intangible assets, or any goodwill or "going concern" value for the Business. Care Plus Medical UCC may withdraw its exercise of the purchase option at any time before it pays for the assets. Franchisee will sign a bill of sale for the purchased assets and any other transfer documents reasonably requested by Care Plus Medical UCC. If Care Plus Medical UCC exercises the purchase option, Care Plus Medical UCC may deduct from the purchase price: (a) all amounts due from Franchisee; (b) Franchisee's portion of the cost of any appraisal conducted hereunder; and (c) amounts paid or to be paid by Care Plus Medical UCC to cure defaults under Franchisee's lease and/or amounts owed by Franchisee to third parties. If any of the assets are subject to a lien, Care Plus Medical UCC may pay a portion of the purchase price directly to the lienholder to pay off such lien. Care Plus Medical UCC may withhold 25% of the purchase price for 90 days to ensure that all of Franchisee's taxes and other liabilities are paid. Care Plus Medical UCC may assign this purchase option to another party.
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, upon the expiration or termination of the franchise agreement, Care Plus Medical Ucc has the option, but not the obligation, to purchase some or all of the assets related to the business. Additionally, Care Plus Medical Ucc can require the franchisee to assign their lease or sublease to them.
To exercise this purchase option, Care Plus Medical Ucc must notify the franchisee within 30 days after the agreement's expiration or termination. The purchase price for the assets will be the lower of either the book value of the assets as declared on the franchisee's last filed tax returns or the fair market value of the assets. If Care Plus Medical Ucc and the franchisee cannot agree on the fair market value within 30 days of the notice, an independent appraiser, acceptable to both parties, will determine the fair market value, with the cost of the appraisal shared equally.
Care Plus Medical Ucc's purchase is limited to assets only, free and clear of all liens, and does not include any liabilities of the franchisee. The purchase price will not include any value for trademarks, intangible assets, or goodwill. Care Plus Medical Ucc retains the right to withdraw its purchase option before payment. Upon purchase, the franchisee must sign a bill of sale and any other transfer documents reasonably requested by Care Plus Medical Ucc. Care Plus Medical Ucc can deduct from the purchase price any amounts owed by the franchisee, the franchisee's share of the appraisal cost, and amounts paid by Care Plus Medical Ucc to cure defaults under the franchisee's lease or amounts owed to third parties. Care Plus Medical Ucc may pay off any liens on the assets directly to the lienholder and may withhold 25% of the purchase price for 90 days to ensure all of the franchisee's taxes and other liabilities are paid. Care Plus Medical Ucc also has the right to assign this purchase option to another party.