If three appraisers are appointed for Itan's purchase, how is the purchase price determined?

According to Itan's 2025 Franchise Disclosure Document, if three appraisers are appointed to determine the value of the acquired assets during a purchase option, the purchase price will be determined in one of two ways. First, if at least two of the three appraisers agree on an appraised value, that agreed-upon value will be the purchase price. However, if none of the appraisers agree on a single appraised value, the purchase price will be the average of the two appraised values that are closest to each other.

This appraisal process is initiated if Itan chooses to exercise its purchase option and the parties (Itan and the franchisee) cannot mutually agree on a purchase price for the acquired assets. The 'acquired assets' are those assets that Itan wishes to purchase from the franchisee upon termination or expiration of the franchise agreement. The fair market value of these assets will not include any value for goodwill and/or the franchise rights granted by the agreement.

This process ensures that a fair market value is determined by independent appraisers, especially when the parties involved cannot come to an agreement. It also provides a mechanism to resolve valuation differences, either through a consensus of at least two appraisers or by averaging the closest values, which can help to expedite the purchase process. Both parties are responsible for 50% of the appraisal costs.