If Kidokinetics chooses to purchase equipment after termination or expiration, how long does it have to exercise this option?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2.1. Franchisor has the option, but not the obligation, to be exercised within thirty (30) days after termination or expiration of this Agreement, to purchase from Franchisee any or all of the equipment (including any point-of-sale system or computer systems), vehicles, signs, fixtures, advertising materials and supplies of Franchisee related to the operation of the Kidokinetics Business, at Franchisee's cost or fair market value, whichever is less. Franchisor will purchase Franchisee's assets free and clear of any liens, charges, encumbrances or security interests and Franchisor will assume no liabilities whatsoever, unless otherwise agreed to in writing by the parties. If the parties cannot agree on the fair market value within thirty (30) days of Franchisor's exercise of its option, fair market value will be determined by two (2) appraisers, with each party selecting one (1) appraiser, and the average of their determinations will be binding. In the event of such appraisal, each party will bear its own legal and other costs and split the appraisal fees equally. If Franchisor elects to exercise its option to purchase, it will have the right to set off (i) all fees for any such independent appraiser due from Franchisee, (ii) all amounts due from Franchisee to Franchisor or any of its affiliates and (iii) any costs incurred in connection with any escrow arrangement (including reasonable legal fees), against any payment and will pay the remaining amount in cash. Closing of the purchase will take place no later than thirty (30) days after determination of the fair market value.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics has the option to purchase a franchisee's equipment, vehicles, signs, advertising materials, and supplies within thirty days after the termination or expiration of the franchise agreement. This is not an obligation, but an option for Kidokinetics. The purchase price will be the franchisee's cost or the fair market value, whichever is less.
If Kidokinetics decides to exercise this option, it must purchase the assets free and clear of any liens or encumbrances, and it will not assume any liabilities unless otherwise agreed in writing. If Kidokinetics and the franchisee cannot agree on the fair market value within thirty days of Kidokinetics exercising its option, each party will select an appraiser, and the average of their determinations will be binding. Each party will bear its own legal and other costs and split the appraisal fees equally.
Kidokinetics has the right to offset any fees due from the franchisee, amounts owed to Kidokinetics or its affiliates, and any costs incurred in connection with any escrow arrangement against the purchase price. The closing of the purchase will occur no later than thirty days after the determination of the fair market value. The franchisee is obligated to provide all necessary documents to perfect Kidokinetics's title and possession of the purchased assets.