How is the 'Agreed Value' determined in the event of an expiration (without renewal) of the Checkers Franchise Agreement?

According to Checkers's 2025 Franchise Disclosure Document, the determination of the "Agreed Value" for the personal property of a franchised restaurant upon expiration (without renewal) of the franchise agreement involves a specific process. Initially, Checkers (or its assignee) and the franchisee will consult to try and reach a mutual agreement on the value of the assets. These assets include all personal property used in the restaurant that the franchisee owns, such as non-perishable inventory, materials, supplies, furniture, equipment, and signs, but excludes cash, short-term investments, and items not meeting Checkers's specifications.

If Checkers and the franchisee cannot agree on the "Agreed Value" within fifteen days after Checkers issues an Appraisal Notice, the "Agreed Value" will be equal to the "Fair Market Value". The Fair Market Value is defined as the amount that an arm's-length purchaser would be willing to pay for the Purchased Assets, assuming they would be used for the operation of a restaurant under a valid franchise agreement reflecting the then-current (or most recent) standard terms upon which Checkers offers franchises, less the cost of any required remodeling.

This valuation method is significant for a prospective franchisee because it dictates how much they can expect to receive for their restaurant's assets if the franchise agreement expires and is not renewed. The deduction for required remodeling costs could potentially lower the final value, so understanding the current franchise terms and potential remodeling requirements is crucial. Furthermore, the franchisee should be prepared to negotiate the asset value and, if necessary, understand how the Fair Market Value will be assessed to ensure they receive a fair price for their assets.