What is the 'Appraised Asset Value' in the context of Checkers' option to purchase?

According to Checkers' 2025 Franchise Disclosure Document, the "Appraised Asset Value" is the amount a purchaser would pay for the restaurant's assets, considering their age and condition, but without considering their use in a restaurant. This valuation is used if Checkers terminates the franchise agreement and exercises its option to purchase the franchisee's assets. In this case, the "Agreed Value" will be the lesser of the "Appraised Asset Value" and the "Net Book Value".

The determination of the Appraised Asset Value, along with the Fair Market Value and Net Book Value, is made by an appraiser from a nationally recognized accounting firm, excluding firms that audit Checkers' financial statements. Checkers will inform the franchisee of the appraiser's identity. The appraiser then submits a written report to both parties within 60 days of their appointment. The franchisee is obligated to provide complete and accurate books and records to the appraiser. If these records are missing or deemed unsatisfactory, the appraiser can use other sources to determine the asset value.

The appraiser's decision regarding the Appraised Asset Value is final and binding for both Checkers and the franchisee. This valuation method focuses on the tangible assets' worth, irrespective of their specific use within a Checkers restaurant, which could be lower than their value in an ongoing restaurant operation. This distinction is important for franchisees to understand, as it can impact the final purchase price Checkers pays for the assets upon termination of the franchise agreement.