What are 'Acquired Assets' in the context of the Itan franchise agreement, and when might Itan purchase them?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If we choose to exercise our purchase option, we will notify you of the assets we wish to purchase (the "Acquired Assets") within 20 days after the termination or expiration date.
If we exercise our purchase option we may require that: (i) you assign your lease to us at no additional charge (if you lease the premises); or (ii) you or your affiliate enter into a lease with us upon standard and commercially reasonable leasing terms, including rent at fair rental value, for a term of 10 years or such shorter term that we specify (if you or your affiliate own the real estate).
The purchase price for the Acquired Assets will be: (i) the purchase price established by the parties (if mutually agreed upon); or (ii) the Appraised Value established in accordance with §21.2(b) below.
We may, at our option, assign our purchase option to a designee of our choosing.
- (b) Appraisal Process.
If the parties cannot agree on the purchase price, the purchase price shall be the Appraised Value established in accordance with this Section. "Appraised Value" means the fair market value of the Acquired Assets as of the date this Agreement is terminated or expires, as applicable; provided, however, that fair market value shall not include any value for goodwill and/or the franchise rights granted by this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, 'Acquired Assets' are the assets that Itan may wish to purchase from a franchisee if Itan chooses to exercise its purchase option. Itan must notify the franchisee of the specific assets it wishes to purchase within 20 days after the termination or expiration date of the franchise agreement.
If Itan exercises this purchase option, it may also require the franchisee to assign their lease to Itan at no additional charge if the premises are leased. Alternatively, if the franchisee or an affiliate owns the real estate, Itan may require them to enter into a lease agreement with Itan under standard and commercially reasonable terms, including fair rental value, for a term of 10 years or a shorter term specified by Itan.
The purchase price for these Acquired Assets will be determined either by mutual agreement between Itan and the franchisee or, if they cannot agree, by an Appraised Value established by independent appraisers. The Appraised Value will represent the fair market value of the Acquired Assets as of the termination or expiration date of the agreement, but it will not include any value for goodwill or the franchise rights granted by the agreement. This valuation process ensures that the franchisee receives fair compensation for the tangible assets, while Itan protects its interests by excluding intangible assets tied to the brand's reputation.