Does the Dq Treat company have an option to purchase the assets of the Restaurant upon termination?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
14.5 Purchase Option. Company may purchase or designate a third party to purchase any or all of the assets of the Restaurant that are owned by Licensee or any of Licensee's affiliates including the land, building, equipment, fixtures, signage, furnishings, supplies, leasehold, leasehold improvements, and inventory of the Restaurant, upon the following conditions:
(A) Company must give Licensee written notice of its intent to exercise its purchase rights under this section 14.5 within 30 days after the date of the expiration or termination of this agreement.
(B) The purchase will be at a price determined by a qualified appraiser paid for by Company and selected with the consent of both parties.
The price determined by the appraiser will be the reasonable fair market value of the assets based on their continuing use in, as, and for the operation of a DQ® Treat restaurant and the appraiser will designate a price for each category of asset (e.g., land, building, equipment, fixtures, etc. but not good will).
If the parties cannot agree upon an appraiser, either party may petition a judge of the United States district court for the district in which the Authorized Location is located to appoint an appraiser.
- (C) Within 45 days after Company's receipt of the appraisal report, Company must inform Licensee if Company or Company's designee intends to purchase any or all of the assets at the price in the appraisal report.
Company or its designated purchaser and Licensee must complete and close the purchase of the designated assets in a commercially reasonable time and manner.
Company may reduce the price paid for the assets by any unpaid portion of the termination fee due under section 13.2(D) of this agreement.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, Dq Treat does have the option to purchase the assets of the restaurant upon termination of the franchise agreement. Dq Treat can either purchase the assets themselves or designate a third party to do so. These assets can include the land, building, equipment, fixtures, signage, furnishings, supplies, leasehold, leasehold improvements, and inventory.
To exercise this purchase option, Dq Treat must provide written notice to the franchisee within 30 days after the expiration or termination of the agreement. The purchase price will be determined by a qualified appraiser, selected with the consent of both parties and paid for by Dq Treat. The appraiser will determine the reasonable fair market value of the assets based on their continued use as a Dq Treat restaurant, and will assign a price to each asset category, excluding goodwill. If both parties cannot agree on an appraiser, either party can petition a judge in the U.S. district court where the restaurant is located to appoint one.
Within 45 days of receiving the appraisal report, Dq Treat must inform the franchisee whether they or their designee intend to purchase any or all of the assets at the appraised price. The purchase must then be completed in a commercially reasonable time and manner. Dq Treat can reduce the purchase price by any unpaid portion of the termination fee that may be due under the agreement.
This clause provides Dq Treat with a mechanism to maintain control over strategic locations and assets, while ensuring the franchisee receives fair market value for their assets as determined by an independent appraisal. For a prospective franchisee, this means that upon termination, Dq Treat could potentially buy the restaurant's assets, providing a defined exit strategy, but also requiring them to relinquish control over the location and potentially valuable assets.