Who bears the costs of the appraisers when Carls Jr. exercises its option to purchase assets?

According to the 2025 Carls Jr. Franchise Disclosure Document, if Carls Jr. and the franchisee cannot agree on the fair market value of the assets that Carls Jr. has the option to purchase, the fair market value will be determined by two certified appraisers. The franchisee selects one appraiser, and Carls Jr. selects the other. This must occur within 60 days after the franchisee receives Carls Jr.'s notice of intent to exercise its purchase option. If the higher appraisal is more than 10% greater than the other appraisal, a third appraiser is selected by the first two appraisers to also appraise the fair market value of the assets. The average value set by the appraisers will be the purchase price.

The appraisers are given full access to the franchised restaurant, its location, and the franchisee's books and records during customary business hours to conduct the appraisal. They will value the leasehold improvements, equipment, furnishings, fixtures, signs, and inventory according to the standards laid out in Section 23 of the franchise agreement.

The fees and costs of the appraisers, whether there are two or three, are to be shared equally between Carls Jr. and the franchisee. This means that a franchisee will be responsible for covering half of these expenses, which can potentially be a significant cost depending on the complexity of the appraisal and the number of appraisers involved.