How is the Purchase Price determined for the assets that Pump It Up purchases from the franchisee?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Purchase Price. The purchase price for the Assets ("Purchase Price") will be the fair market value of the Assets (or, for leased assets, the fair market value of your Lease), determined as of the effective date of purchase in a manner that accounts for customary depreciation and condition of the Assets; provided, however, that the Purchase Price will take into account the termination of this Agreement. Further, the Purchase Price for the Assets will not contain any factor or increment for any trademark, service mark or other commercial symbol used in connection with the operation of the Franchised Business nor any goodwill or "going concern" value for the Franchised Business. We may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and
inventory that are not approved as meeting then-current standards for a Pump It Up Business or for which you cannot deliver a Bill of Sale in a form satisfactory to us.
- C.
Certified Appraisers.
If we and you are unable to agree on the fair market value of the Assets within 30 days after your receipt of our notice of our intent to exercise our option to purchase the Assets, the fair market value will be determined by two professionally certified appraisers, one selected by you and one selected by us.
If the valuations from the two appraisers differ by more than 10%, the two appraisers will together select a third professionally certified appraiser who also will appraise the fair market value of the Assets.
The average value set by the appraisers (whether two or three appraisers as the case may be) will be conclusive and will be the Purchase Price.
The appraisers will be given full access to the Franchised Business, the Premises and your books and records during customary business hours to conduct the appraisal and will value the Assets to be purchased in accordance with the standards of this Section 21.
The appraisers' fees and costs will be borne equally by you and us.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the purchase price for assets that Pump It Up may opt to buy from a franchisee upon termination or expiration of the franchise agreement is determined by the fair market value of the assets. This valuation considers customary depreciation and the condition of the assets as of the purchase date. The fair market value also accounts for the termination of the agreement. However, the purchase price excludes any value associated with trademarks, service marks, or goodwill related to the Pump It Up business.
If Pump It Up and the franchisee cannot agree on the fair market value within 30 days of Pump It Up expressing intent to purchase the assets, the determination is made by two professionally certified appraisers. One appraiser is selected by the franchisee, and the other by Pump It Up. If the appraisers' valuations differ by more than 10%, a third certified appraiser is selected by the initial two appraisers to provide another valuation.
The average value set by the appraisers, whether based on two or three appraisals, will be considered conclusive and will serve as the Purchase Price. The appraisers are granted full access to the franchised business, premises, and financial records to conduct their appraisal, adhering to specific standards outlined in the franchise agreement. The fees and costs associated with the appraisers are split equally between Pump It Up and the franchisee.