What is the deadline for each party to select an independent appraiser for Unique Consideration valuation in a Stretch Zone franchise sale?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If the parties cannot agree on the fair market value of the Unique Consideration, an independent appraiser the parties select will determine its fair market value.
If the parties are unable to agree on an independent appraiser within 10 days, the parties will each select an independent appraiser, and the appraisers will select a third independent appraiser (the "Third Appraiser").
The Third Appraiser will determine the fair market value of the Unique Consideration.
If either party fails to select an appraiser and give notice to the other of the identity of the appraiser within the 10-day
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, if the purchase agreement for a franchise includes "Unique Consideration" (something Stretch Zone cannot easily duplicate) and the parties can't agree on its value, an independent appraiser will determine the fair market value. If the parties can't agree on a single appraiser, each party has 10 days to select their own independent appraiser.
If the parties fail to agree on an appraiser within the initial negotiation, both the selling franchisee and Stretch Zone each get to appoint their own appraiser. This ensures both sides have representation in determining the value of the unique consideration.
If a party fails to select an appraiser within the 10-day period, the appraiser selected by the other party will be the appraiser. This encourages both parties to act promptly in selecting an appraiser to ensure the valuation process can move forward efficiently. The parties will pay the cost of the appraisal equally.