How will the Checkers franchisee be notified of the identity of the Appraiser?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
16.04 Option to Purchase Franchised Restaurant.
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). At any time following our providing you an Appraisal Notice, we shall have the unrestricted right to assign this option to purchase separate and apart from the remainder of this Agreement, including, without limitation, to another third-party franchisee. Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us (or our assignee), our (or our assignee's) designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
- (b) The Agreed Value shall be determined by consultation between you and us (or our assignee). If you and we (or our assignee) are unable to agree on the Agreed Value of the Purchased Assets within fifteen (15) days after the Appraisal Notice, then the Agreed Value will be as follows: (a) in the event of an expiration (without renewal) of this Agreement, the Agreed Value shall be the "Fair Market Value," consisting of the amount which an arm's length purchaser would be willing to pay for the Purchased Assets, assuming that the Purchased Assets would be used for the operation of a Restaurant under a valid franchise agreement reflecting the thencurrent (or if we are not offering franchises at that time, then the most recent) standard terms upon which we offer franchises for Restaurants, less the cost of any required remodeling; and (b) in the event of any termination of this Agreement, the Agreed Value shall be the lesser of the Appraised Asset Value (as defined below) and the Net Book Value (as defined below).
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, if Checkers chooses to exercise its option to purchase the franchisee's restaurant upon termination or expiration of the franchise agreement, Checkers will provide an "Appraisal Notice" to the franchisee within ten days of such termination or expiration. Following this notice, the franchisee must allow Checkers, its agents, and the "Appraiser" access to the restaurant and its records to conduct inventories and determine the purchase price for the assets.
The identity of the Appraiser and the method by which Checkers will inform the franchisee of the Appraiser's identity is not specified in this section. The FDD states that the "Agreed Value" of the restaurant's assets will be determined through consultation between the franchisee and Checkers. If they cannot agree within 15 days of the Appraisal Notice, the "Agreed Value" will be determined based on Fair Market Value or Appraised Asset Value, depending on whether the agreement expired or was terminated.
It is important for a prospective Checkers franchisee to understand the process for determining the value of their restaurant's assets in the event of termination or expiration. Since the FDD does not specify how the franchisee will be informed of the Appraiser's identity, it would be prudent for a prospective franchisee to seek clarification from Checkers regarding the notification process and the Appraiser's qualifications to ensure a fair and transparent appraisal process.