Does Christies International Real Estate have an option to purchase the business of a franchisee after termination?
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 Christies International Real Estate's 2025 Franchise Disclosure Document, under certain conditions, Christies International Real Estate has the option to purchase a franchisee's business if the franchise agreement expires or is terminated. This option is available to Christies International Real Estate if the franchisee was new to the real estate brokerage business before signing the agreement and did not convert an existing real estate brokerage business to the Christies International Real Estate brand.
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. Christies International Real Estate must provide 60 days' written notice from the date of expiration or termination to exercise this option. Christies International Real Estate can also assign this purchase option to another party.
The purchase price will be the book value of the purchased assets, but Christies International Real Estate can exclude any products not compliant with the agreement or any goodwill associated with intangible property like trademarks and confidential information. If the parties disagree on the fair market value, an independent appraiser will determine the value, with the costs split equally between Christies International Real Estate and the franchisee. The purchase will be paid in cash within 60 days after the fair market value is determined, and Christies International Real Estate can deduct any amounts the franchisee owes to them or their affiliates from the purchase price.
This clause is important for prospective franchisees to understand, as it outlines the conditions under which Christies International Real Estate can buy back the business. Franchisees should consider how this buy-back option might affect their long-term business plans and the potential value they could realize upon exiting the franchise system. It is also important to understand how the book value of the assets will be determined and what recourse a franchisee has if they disagree with Christies International Real Estate's valuation.