What is the process for appointing appraisers if Itan and I cannot agree on a single appraiser?
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.
You must promptly provide any documents or information requested by the appraisers.
If a single appraiser is appointed, the purchase price shall be the Appraised Value established by the appraiser.
If three (3) appraisers are appointed, the purchase price shall be: (i) the Appraised Value agreed upon by at least two (2) of the appraisers; or (ii) the average of the two (2) Appraised Values that are closest to each other if none of the appraisers agree upon the Appraised Value.
Each party shall promptly pay 50% of the cost of the appraisal.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if Itan exercises its purchase option and the parties cannot agree on the purchase price for the acquired assets, the price will be determined by an appraisal process. The first step is to attempt to mutually agree on a single independent appraiser.
If Itan and the franchisee fail to agree on a single appraiser, either party can demand the appointment of three appraisers. Within 15 days of this demand, each party (Itan and the franchisee) must appoint one appraiser and notify the other party of the appraiser's name and contact information. Then, within 30 days after the initial demand, the two appointed appraisers must jointly appoint a third appraiser.
If either party fails to appoint an appraiser within the initial 15-day period, the appraiser appointed by the other party will be deemed the single appraiser approved by both parties. In this case, the purchase price will be the appraised value established by that single appraiser. If three appraisers are successfully appointed, the purchase price will be either the value agreed upon by at least two of the appraisers, or the average of the two closest appraised values if no consensus is reached. Each party is responsible for paying 50% of the appraisal costs, ensuring a shared financial responsibility for the valuation process.