What is the criteria for the purchase price and terms of the transfer of a Christies International Real Estate franchise?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
If you were new to the real estate brokerage business before you signed this Agreement and became an Affiliate, and you did not have an existing real estate brokerage business that converted to the CHRISTIE'S INTERNATIONAL REAL ESTATE brand, then if this Agreement expires or is terminated for any reason, we have the option, but not the obligation, upon 60 days' written notice from the date of expiration or termination, to purchase from you all the tangible and intangible assets relating to the Business (excluding any unsalable inventory, cash, short term investments and accounts receivable) (collectively, the "Purchased Assets").
We may assign this option to purchase, and assignment separate and apart from the remainder of this Agreement.
The purchase price for the Business will be the book value of the Purchased Assets; provided that: (a) we may exclude from the Purchased Assets any products or other items that are not in compliance with this Agreement; and (b) we may exclude from fair market value any provision for goodwill or similar value attributable to intangible property (such as the Marks and Confidential Information).
If the parties cannot agree on fair market value within a reasonable time, we may designate an independent appraiser to determine the fair market value of the Purchased Assets.
The determination of such appraiser will be binding on the parties hereto, and the costs of such appraisal will be divided equally between you and us.
The purchase price, as determined above, will be paid in cash at the closing of the purchase, which will occur within a reasonable time, not to exceed 60 days, after the fair market value is determined.
At the closing, you will deliver documents transferring good and merchantable title to the assets purchased, free and clear of all liens, encumbrances and liabilities to us or our designee and such other documents we may reasonably request to permit us to operate the Business without interruption.
We may set off against and reduce the purchase price by all amounts you owe to us or any of our affiliates.
Source: Item 23 — RECEIPT (FDD pages 54–177)
What This Means (2025 FDD)
According to the 2025 Christies International Real Estate Franchise Disclosure Document, if a franchisee was new to the real estate brokerage business before signing the agreement and did not convert an existing real estate brokerage to the Christies International Real Estate brand, Christies International Real Estate has the option to purchase the business's assets if the agreement expires or is terminated. This is not an obligation, but an option Christies International Real Estate can exercise with 60 days' written notice. The assets subject to purchase include all tangible and intangible assets related to the business, excluding unsalable inventory, cash, short-term investments, and accounts receivable.
The purchase price will be the book value of the purchased assets. Christies International Real Estate may exclude products or items not compliant with the agreement and can exclude goodwill or similar value tied to intangible property like the brand's marks and confidential information. If the parties disagree on the fair market value, an independent appraiser may be designated to determine the value, with the costs of the appraisal split equally between the franchisee and Christies International Real Estate. The appraiser's decision is binding.
The purchase price will be paid in cash at the closing, which will occur within 60 days after the fair market value is determined. The franchisee must deliver documents transferring clear title to the purchased assets, free of liens and liabilities, allowing Christies International Real Estate to operate the business without interruption. Christies International Real Estate can also offset the purchase price by any amounts the franchisee owes to them or their affiliates. This clause ensures a structured process for Christies International Real Estate to potentially reacquire the business assets under specific conditions, particularly when the franchisee was not an established brokerage before joining the Christies International Real Estate brand.