Does Ledgers have the option to purchase the franchisee's assets upon termination?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination or expiration of this Agreement, including a sale of the Franchise Business, you will:
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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, Ledgers has the option to purchase certain assets from the franchisee upon termination of the franchise agreement. Specifically, Ledgers has the option to purchase the franchisee's furniture, equipment, signage, fixtures, and supplies.
To exercise this option, Ledgers must offer to purchase these assets within thirty (30) days of the termination date. The purchase price will be the adjusted book value of the assets. Adjusted book value is defined as the undepreciated book value of the assets as reported on the franchisee's most recently filed federal tax return prior to the termination date.
This clause provides Ledgers with a mechanism to maintain consistency and standards within its franchise system by acquiring assets used in the operation of the business. For a franchisee, this represents a potential avenue for recouping some investment in the event of termination, although the price is determined by book value, which may be lower than market value. The franchisee is obligated to offer these assets to Ledgers if Ledgers chooses to exercise its option.