What is the definition of 'adjusted book value' for the purpose of Ledgers purchasing assets after termination of a Ledgers franchise?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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- At our option, offer to us the right to purchase your furniture, equipment, signage, fixtures, and supplies within thirty (30) days of the date of termination for the adjusted book value, which is the undepreciated book value of the assets on your most recently filed federal tax return prior to the date of the termination or expiration;
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, if the franchise agreement is terminated, Ledgers has the option to purchase certain assets from the franchisee. Specifically, Ledgers may choose to buy the franchisee's furniture, equipment, signage, fixtures, and supplies.
The price Ledgers would pay for these assets is the 'adjusted book value'. The FDD defines this as the undepreciated book value of the assets as reported on the franchisee's most recently filed federal tax return before the termination date.
For a prospective Ledgers franchisee, this means that upon termination, they may be required to sell these assets back to Ledgers at a price determined by the undepreciated value on their tax return. This could be beneficial if the assets are difficult to sell otherwise, but the franchisee should be aware that they may not receive full market value for these items.