Does the option to purchase the business apply to all Christies International Real Estate franchisees?
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 FDD, the option for Christies International Real Estate to purchase a franchise applies specifically to franchisees who were 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. This option is not applicable to all franchisees, but only to those meeting these specific conditions.
If the agreement expires or is terminated, Christies International Real Estate has the option, but not the obligation, to purchase the tangible and intangible assets of the business, excluding unsalable inventory, cash, short-term investments, and accounts receivable. This decision must be communicated within 60 days of the expiration or termination date. The purchase price will be based on the book value of the purchased assets, excluding any non-compliant products or goodwill associated with intangible property like trademarks and confidential information.
In case of disagreement on the fair market value, an independent appraiser may be designated to determine the value, with the costs split equally between Christies International Real Estate and the franchisee. The purchase will be completed in cash within 60 days after the fair market value is determined. Christies International Real Estate can also deduct any amounts owed by the franchisee from the purchase price.
This clause provides Christies International Real Estate with a mechanism to regain control of a franchise under specific circumstances, particularly when the franchisee was new to the industry. It also protects Christies International Real Estate's brand and confidential information. Prospective franchisees should carefully consider these terms, especially if they are entering the real estate business for the first time, as it could impact their exit strategy and the value they receive upon leaving the franchise system.