Is the Appraiser's determination of the Agreed Value final and binding for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In absence of such books and records or if the Appraiser is not satisfied with their completeness or accuracy, the Appraiser may make the determination of the Agreed Value on the basis of other sources and information he or she deems appropriate. The Appraiser's determination shall be final and binding on the parties hereto.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Appraiser's determination of the Agreed Value is final and binding on both parties. This determination is made by a member of a nationally recognized accounting firm, selected by Checkers, who has experience in valuing restaurant businesses. The Appraiser will provide a written report to both Checkers and the franchisee, typically within sixty days of their appointment.
For a prospective franchisee, this means that if Checkers exercises its option to purchase the franchise's assets upon termination or expiration of the franchise agreement, the valuation of those assets by the Appraiser is not subject to further negotiation or dispute. The franchisee is obligated to provide the Appraiser with complete and accurate books and records to facilitate the valuation process. If these records are missing or deemed unsatisfactory, the Appraiser can use other sources to determine the Agreed Value.
This clause carries significant implications. The franchisee must ensure meticulous record-keeping to support a fair valuation. Since the Appraiser is selected by Checkers, a franchisee might perceive a potential bias, making thorough preparation and documentation crucial. While the franchisee can provide input and documentation, the final determination rests solely with the Appraiser, highlighting the importance of understanding the valuation process and potential outcomes.