How is the purchase price determined for the Option Assets that Cicis elects to purchase?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
enses pertaining to the operation of your Restaurant, and/or (iv) any or all of the physical assets used in or resulting from the operation of your Restaurant, including furnishings, equipment, signs, small wares, fixtures, motor vehicles, supplies, and inventory. We must exercise the Option by providing you with written notice of our election within 30 days following expiration or termination of this Agreement (the "Option Notice"). In the Option Notice, we will list the categories of items that we intend to purchase.
- (2) The purchase price for the items we describe in our Option Notice (the "Option Assets") will be fair market value. We and you will first attempt to mutually agree on the fair market value of the Option Assets. If, at any time, either party decides that mutual agreement will not be reached, it (the "First Side") may give written notice ("FMV Notice") to the other side (the "Second Side") demanding that fair market value be determined through appraisal and including the name of a certified and independent appraiser selected by the First Side.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the purchase price for Option Assets, which Cicis may elect to acquire upon expiration or termination of the franchise agreement, is determined by fair market value. Cicis has the option to acquire items such as the right to possess the location, equipment leases, transferable permits and licenses, and physical assets used in the restaurant's operation. Cicis must provide written notice within 30 days of the agreement's expiration or termination, listing the items they intend to purchase.
Initially, Cicis and the franchisee will attempt to mutually agree on the fair market value of these assets. If an agreement cannot be reached, either party can demand an appraisal, providing written notice and selecting a certified and independent appraiser. The other party then has 10 days to select their own appraiser. If they fail to do so, the fair market value will be determined solely by the first party's chosen appraiser.
Within 15 days of the second appraiser's selection, both appraisers will submit their proposed fair market values, and the average of the two submissions will be considered final and binding. Each party is responsible for covering the fees and expenses of their selected appraiser. This appraisal process ensures an objective valuation of the Option Assets, protecting both Cicis and the franchisee in the event of a disagreement.