In the Itan Franchise Agreement, what is the deadline for each party to appoint an appraiser after a demand for three appraisers?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
The parties shall attempt to mutually agree upon a single independent appraiser.
If they fail to do so, either party may demand the appointment of three (3) appraisers in accordance with the following: (i) no later than 15 days after the demand, each party shall appoint one (1) appraiser and notify the other party of the appointed appraiser's name and contact information; and (ii) no later than 30 days after the demand, the two (2) appraisers appointed by the parties will jointly appoint a third (3rd) appraiser.
If either party fails to appoint an appraiser within the 15-day period, then the appraiser appointed by the other party shall be deemed the single appraiser approved by the parties.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if the parties cannot agree on the purchase price of acquired assets, either party may demand the appointment of three appraisers. Following this demand, each party has 15 days to appoint one appraiser and notify the other party of the appointee's name and contact information. After the parties have made their appointments, the two appraisers then have 30 days to jointly appoint a third appraiser.
If a party fails to appoint an appraiser within the initial 15-day timeframe, the appraiser appointed by the other party will be deemed the single appraiser approved by both parties. This highlights the importance of adhering to the deadlines to ensure the franchisee's interests are represented in the appraisal process.
This appraisal process is crucial for determining the fair market value of the acquired assets, excluding any value for goodwill or franchise rights. The appraised value will then be used to determine the purchase price if the parties cannot reach a mutual agreement. Franchisees should understand these procedures to protect their investment during the termination or expiration of the franchise agreement.