Who bears the cost of the appraisers used to determine the cash value of a Chicken Guy transfer?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If the proposed Transfer provides for payment of consideration other than cash or it involves intangible benefits, Chicken Guy or its designee may elect to purchase the interest proposed to be sold for the reasonable equivalent in cash.
If the parties are unable to agree within 30 days on the reasonable equivalent in cash of the non-cash part of the offer received by Developer, or the cash value of that portion of the offer received by Developer relating to this Agreement, Developer's Franchised Restaurants and those other restaurants, the amount shall be determined by two professionally certified appraisers, Developer selecting one and Chicken Guy or its designee selecting one.
If the amounts set by the two appraisers differ by more than 10%, the two appraisers shall select a third professionally certified appraiser who also shall determine the amount.
The average value set by the appraisers (whether two or three appraisers as the case may be) shall be conclusive and Chicken Guy or its designee may exercise its right of first refusal within 30 days after being advised in writing of the decision of the appraisers.
The cost of the appraisers shall be shared equally by the parties.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the cost of appraisers used to determine the cash value of a transfer is shared equally between the parties involved. This situation arises if the proposed transfer involves consideration other than cash or includes intangible benefits, and Chicken Guy elects to purchase the interest being transferred for its reasonable cash equivalent.
If the parties cannot agree on the cash equivalent within 30 days, two appraisers will be selected, one by the developer (franchisee) and one by Chicken Guy. If the appraisers' valuations differ by more than 10%, a third appraiser is selected by the first two to determine the amount. The average value set by the appraisers will be conclusive.
This arrangement ensures that neither party is solely burdened with the expense of determining the fair cash value, promoting a balanced approach to the transfer process. For a prospective Chicken Guy franchisee, this means that in the event of a transfer involving non-cash considerations, they will be responsible for half of the appraiser fees, which should be factored into their financial planning for a potential transfer scenario.