Who is responsible for the costs associated with the appraisal process if Kidokinetics and the franchisee disagree on the fair market value?

According to Kidokinetics' 2024 Franchise Disclosure Document, in the event that Kidokinetics exercises its option to purchase a franchisee's assets upon termination or expiration of the franchise agreement, and the parties cannot agree on the fair market value of those assets, an appraisal process will be initiated. Each party, Kidokinetics and the franchisee, will select their own appraiser. The average of the two appraisals will be binding.

Regarding the costs associated with this appraisal process, the FDD specifies that each party will bear its own legal and other costs. Additionally, Kidokinetics and the franchisee will split the appraisal fees equally. This means that the franchisee will be responsible for the fees of their own legal counsel, any other costs they incur, and half of the appraiser's fees.

This arrangement is fairly standard in franchise agreements when determining fair market value through appraisal. It ensures that both parties have a vested interest in selecting a competent appraiser and managing their own legal costs, as they will directly bear these expenses. Splitting the appraisal fees is a common way to share the burden of the appraisal process itself.