If Itan exercises its purchase option, what happens if only one appraiser is appointed?

According to Itan's 2025 Franchise Disclosure Document, if Itan exercises its purchase option and only one appraiser is appointed, the purchase price for the acquired assets will be the appraised value established by that single appraiser. This situation arises if the parties initially fail to agree on a single appraiser and then one party fails to appoint their own appraiser within 15 days of a demand for three appraisers. In that case, the appraiser appointed by the other party is deemed the single appraiser approved by both parties.

For a prospective Itan franchisee, this means the valuation of their assets could rest solely on one appraiser's assessment if the franchisee doesn't appoint their own appraiser in a timely manner. This highlights the importance of adhering to the specified timelines and actively participating in the appraisal process to ensure a fair valuation. Failing to appoint an appraiser could result in the franchisee being bound by a valuation they find unfavorable.

It is important to note that both parties are expected to promptly provide any documents or information requested by the appraisers, ensuring the appraiser has access to all necessary data to make an informed decision. Additionally, each party is responsible for paying 50% of the appraisal costs. This clause underscores the need for franchisees to be prepared to cover these costs and actively engage in the appraisal process to protect their interests when Itan exercises its purchase option.