If a single appraiser is appointed, how is the purchase price determined for Itan's acquisition?

According to Itan's 2025 Franchise Disclosure Document, if a single appraiser is appointed to determine the value of the Acquired Assets, the purchase price will be the Appraised Value established by that single appraiser. This process is invoked if Itan exercises its option to purchase the assets of a franchisee's salon upon termination or expiration of the franchise agreement, and the parties cannot agree on a purchase price.

The FDD outlines a process where both parties attempt to agree on a single independent appraiser. If they fail to do so, either party can demand the appointment of three appraisers. However, if one party fails to appoint an appraiser within 15 days of the demand, the appraiser appointed by the other party is deemed the single appraiser. This highlights the importance of adhering to the timelines specified in the franchise agreement to ensure a fair appraisal process.

The "Appraised Value" is defined as the fair market value of the Acquired Assets as of the termination or expiration date of the agreement. However, this valuation specifically excludes any value for goodwill and/or the franchise rights granted by the agreement. This means the franchisee will not be compensated for the brand recognition or the value of the franchise system itself, only for the tangible assets of the salon. Franchisees should be aware of this when considering the potential value of their business at the end of their franchise term.