Under what circumstances does Crisp & Green have the option to purchase the franchised restaurant's assets?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
16.04 Option to Purchase Franchised Restaurant.
- (a) Upon termination or expiration (without renewal) of this Agreement, we have the right, exercisable by giving notice thereof ("Appraisal Notice") within ten (10) days after the date of such termination or expiration, to require that a determination be made of the "Agreed Value" (as defined below) of all the personal property used in the Franchised Restaurant which you own, including inventory of non-perishable products, materials, supplies, furniture, equipment, signs, but excluding any cash and short-term investments and any items not meeting our specifications for Restaurants (the "Purchased Assets"). Upon such notice, you may not sell or remove any of the personal property of the Franchised Restaurant from the Premises and must give us, our designated agents and the "Appraiser" (as defined below) full access to the Franchised Restaurant and all of your books and records at any time during customary business hours in order to conduct inventories and determine the purchase price for the Purchased Assets.
- (b) The Agreed Value shall be determined by consultation between you and us. If you and we are unable to agree on the Agreed Value of the Purchased Assets within fifteen (15) days after the Appraisal Notice, then the Agreed Value will be the Fair Market Value, consisting of the amount which an arm's length purchaser would be willing to pay for the Purchased Assets, less the cost of any required remodeling of the Franchised Premises if we have exercised our option on the lease.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, Crisp & Green has the option to purchase the franchised restaurant's assets under specific circumstances related to the termination or expiration of the franchise agreement. Upon either the termination or the expiration (without renewal) of the franchise agreement, Crisp & Green has the right to purchase the personal property used in the franchised restaurant.
This right is exercisable by Crisp & Green providing an "Appraisal Notice" within ten days after the termination or expiration date. The assets subject to purchase include the franchisee's owned personal property used in the restaurant, such as non-perishable inventory, materials, supplies, furniture, equipment, and signs. However, this excludes cash, short-term investments, and any items not meeting Crisp & Green's specifications.
Following the Appraisal Notice, the franchisee is restricted from selling or removing any personal property from the premises and must allow Crisp & Green and their agents access to the restaurant and records for inventory and valuation purposes. The purchase price, termed the "Agreed Value," is initially determined through consultation between the franchisee and Crisp & Green. If an agreement cannot be reached within fifteen days of the Appraisal Notice, the Agreed Value defaults to the Fair Market Value, which is the amount an arm's length purchaser would pay, less any costs for required remodeling if Crisp & Green has exercised their option on the lease.