What primarily constitutes the inventories for Dq Treat?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
t premises and Authorized Location, and its other applicable obligations under this agreement or any other agreement between Licensee and Company or Company's affiliates.
- 14.4 Amounts Owed. Licensee must pay all sums due to Company, its affiliates or designees, or that Licensee owes to third parties which have been guaranteed by Company or any of its affiliates, within 10 days of the termination or expiration of this agreement.
- 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).
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, the inventory of a Dq Treat restaurant primarily consists of the supplies, ingredients, and products required to operate the business. This includes the distinctive dairy products, beverages, food products, and other items sold under the Dq Treat trademarks.
The definition of the 'System' used by Dq Treat franchisees includes 'supplies, ingredients, secret and proprietary formulas' which are essential for producing the menu items. These items, along with other products for sale, would constitute the bulk of the inventory that a franchisee needs to maintain.
When a Dq Treat franchise agreement terminates, Dq Treat has the option to purchase the franchisee's assets, including the restaurant's inventory. This inventory is valued based on its 'reasonable fair market value' for continued use in a Dq Treat restaurant. This indicates the importance of inventory in the overall operation and valuation of a Dq Treat franchise.