Regarding Bath Tune Up's Financing Agreements, do the representations and warranties survive the execution and delivery of the agreement?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
All representations and warranties contained in this Agreement or any of the other Financing Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have been made again to Secured Party on the date of any additional borrowing or other credit accommodation under any amendment, restatement, modification or substitution of the Note and shall be conclusively presumed to have been relied on by Secured Party regardless of any investigation made or information possessed by Secured Party. The representations and warranties set forth herein shall be cumulative and in addition to any other representations or warranties which Pledgor shall now or hereafter give, or cause to be given, to Secured Party.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the representations and warranties contained within the franchise agreement and other financing agreements do indeed survive the execution and delivery of the agreement. This means that even after the agreement is signed and put into effect, the promises and assurances made by the franchisee (Pledgor) remain valid and enforceable. These representations and warranties are considered to be made again on the date of any additional borrowing or credit adjustments.
This survival clause is significant because it protects the Secured Party (likely the franchisor or a lending institution) by ensuring that the information provided by the franchisee remains accurate and reliable throughout the term of the agreement. The Secured Party is presumed to have relied on these representations, regardless of any independent investigation or information they possess. This reliance is crucial for maintaining the integrity of the financing arrangement and managing risk.
Furthermore, the representations and warranties are cumulative, meaning they are in addition to any other representations or warranties the franchisee provides, now or in the future. This layering of assurances strengthens the Secured Party's position and underscores the franchisee's ongoing responsibility for the accuracy and completeness of the information provided. This is a common practice in financing agreements to provide the lender with continuous protection and recourse in case of misrepresentation or breach of warranty.