How long do the parties have to agree on the value of Unique Consideration in a Stretch Zone franchise sale?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If the purchase agreement provides for the Offeree's full or partial payment to include consideration that is of a nature that we cannot reasonably duplicate (the "Unique Consideration"), we may substitute cash or stock (of we are a public company with registered shares) in lieu of the Unique Consideration.
The parties will agree on the value of the Unique Consideration within 30 days after we received the purchase agreement and other information.
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 FDD, when a purchase agreement involves Unique Consideration (something Stretch Zone cannot easily duplicate), both parties have 30 days to agree on its value after Stretch Zone receives the purchase agreement and related information.
If both parties cannot agree on the fair market value of the Unique Consideration within the initial 30-day period, they will select an independent appraiser to determine the value. Should they fail to agree on an appraiser within 10 days, each party will choose their own appraiser, and those two appraisers will then select a third independent appraiser. The third appraiser will then determine the fair market value of the unique consideration.
If a party does not select an appraiser within the 10-day timeframe, the appraiser selected by the other party will be the appraiser. The costs associated with the appraisal will be split equally between the parties. The closing of any purchase where unique consideration is determined will occur within 15 days after the value of the unique consideration is determined.