Does a Dq Treat licensee receive compensation for assigning ownership of improvements related to the DQ restaurant system to the company?
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 Dq Treat's 2025 Franchise Disclosure Document, under certain conditions, Dq Treat may purchase a franchisee's restaurant assets, including leasehold improvements. Specifically, if Dq Treat exercises its option to purchase the assets of the restaurant upon termination or expiration of the franchise agreement, the franchisee will be compensated for those assets.
The purchase price will be determined by a qualified appraiser, selected with the consent of both Dq Treat and the franchisee, and paid for by Dq Treat. The appraiser will determine the reasonable fair market value of the assets based on their continuing use in the operation of a Dq Treat restaurant, designating a price for categories such as land, building, equipment, and fixtures, but not goodwill. If both parties cannot agree on an appraiser, either party can petition a judge to appoint one.
Dq Treat must notify the franchisee within 30 days of the termination or expiration of the agreement if it intends to exercise its purchase rights. Following receipt of the appraisal report, Dq Treat has 45 days to inform the franchisee if it will purchase the assets at the appraised value. The purchase must then be completed in a commercially reasonable time and manner. Dq Treat can reduce the purchase price by any unpaid termination fees. This process ensures that a Dq Treat franchisee receives fair compensation for owned assets and improvements made to the restaurant if Dq Treat decides to purchase them upon the end of the franchise agreement.