For Dq Treat, is the Company's exercise of a right subject to any limitation or review?
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)
Based on the 2025 Dq Treat Franchise Disclosure Document, when the operating agreement between Dq Treat and the licensee is terminated or expires, Dq Treat has the option to purchase the assets of the restaurant.
According to the FDD, Dq Treat must provide written notice to the licensee within 30 days of the termination or expiration date if they intend to exercise this purchase right. The purchase price will be determined by a qualified appraiser, who is 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, designating a price for each asset category, excluding goodwill.
If Dq Treat and the licensee cannot agree on an appraiser, either party can petition a judge in the United States district court where the authorized location is situated to appoint one. Within 45 days of receiving the appraisal report, Dq Treat must inform the licensee whether they intend to purchase the assets at the appraised price. The purchase must then be completed in a commercially reasonable time and manner. Dq Treat can reduce the asset purchase price by any unpaid termination fees owed by the licensee.