Under what conditions does Ledgers have the option to purchase a Ledgers franchisee's furniture, equipment, signage, fixtures, and supplies after 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 a franchisee's furniture, equipment, signage, fixtures, and supplies after the termination or expiration of the Franchise Agreement. This is not an obligation, but rather an option that Ledgers can exercise.
If Ledgers chooses to exercise this option, they must notify the franchisee within thirty days of the termination date. The purchase price will be the adjusted book value of the assets. The 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 or expiration date.
This clause ensures that Ledgers has a way to maintain brand consistency and potentially assist a new franchisee taking over the territory. For a franchisee, this provides a potential avenue for recouping some investment in assets, although the price is determined by the adjusted book value, which may be significantly lower than the market value, especially for items that depreciate quickly.