Does the franchisee need to provide representations and warranties regarding the validity of contracts and liabilities of the entity being purchased for Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
30. AUTHORITY
Franchisee or, if Franchisee is a corporation, limited liability company or partnership, the individuals executing this Agreement on behalf of such corporation, limited liability company or partnership, warrant to us, both individually and in their capacities as Owners, partners, members, shareholders, directors and officers, that all of them as the case may be, have read and approved this Agreement, including the restrictions which this Agreement places upon their right to transfer their respective interests in such entity as set forth in Section 22.
31. FURTHER REPRESENTATIONS AND WARRANTIES BY THE FRANCHISEE
Franchisee acknowledges and warrants that it has received a complete and final copy of this Agreement, our Disclosure Document and applicable exhibits, in a timely fashion as required; and that before signing this Agreement, Franchisee was given ample opportunity to review and examine our Disclosure Document and was furnished with copies of the documents. NO ORAL, WRITTEN OR VISUAL CLAIM OR STATEMENT THAT CONTRADICTS THE DISCLOSURE DOCUMENT WAS MADE.
FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE AND ALL OF ITS OWNERS, HAVE BEEN ADVISED TO HAVE THIS AGREEMENT AND ALL OTHER DOCUMENTS REVIEWED BY AN ATTORNEY AND THAT FRANCHISEE AND ITS OWNERS HAVE READ, UNDERSTOOD, HAD AN OPPORTUNITY TO DISCUSS AND AGREED TO EACH PROVISION OF THIS AGREEMENT. THE FRANCHISEE AND ITS OWNERS AGREE THAT THERE HAS BEEN NO PRESSURE OR COMPULSION BY FRANCHISOR OR ITS AGENTS TO SIGN THIS AGREEMENT.
FRANCHISEE ACKNOWLEDGES AND AGREES THAT THE SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED TO BE UNDERTAKEN BY FRANCHISEE AND ITS OWNERS IS SPECULATIVE AND WILL BE DEPENDENT ON PERSONAL EFFORTS AND SUCCESS IS NOT GUARANTEED. FRANCHISEE AND ITS OWNERS ACKNOWLEDGE AND REPRESENT THAT IT HAS ENTERED INTO THIS AGREEMENT AND MADE AN INVESTMENT ONLY AFTER MAKING AN INDEPENDENT INVESTIGATION OF THE OPPORTUNITY, INCLUDING HAVING RECEIVED A LIST WITH THE FRANCHISE DISCLOSURE DOCUMENT OF OTHER CURRENTLY AND PREVIOUSLY OPERATED BURROS & FRIES FRANCHISES, IF ANY AT THAT TIME.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, the individuals executing the agreement on behalf of the entity warrant to Burros Fries that they have read and approved the agreement, including the restrictions on transferring their interests in the entity as detailed in Section 22. This means that the individuals signing on behalf of the franchisee entity are confirming they understand and agree to the terms, especially those concerning ownership transfer limitations.
Additionally, the Burros Fries franchisee acknowledges and warrants that they received a complete copy of the Franchise Agreement, Disclosure Document, and exhibits in a timely manner. They also confirm that they had ample opportunity to review the documents before signing and that no contradictory oral, written, or visual claims were made. This is a standard clause ensuring the franchisee is fully informed and understands the agreement they are entering into.
Furthermore, the franchisee acknowledges that they were advised to have the agreement reviewed by an attorney and that they have read, understood, and agreed to each provision without any pressure from Burros Fries. The franchisee also acknowledges that the success of the business is speculative and depends on their personal efforts, with no guaranteed success. They represent that they made the investment after an independent investigation of the opportunity, including reviewing a list of current and previous Burros Fries franchisees, if any existed at the time. These acknowledgments and warranties are designed to protect Burros Fries from future claims that the franchisee was misled or did not understand the risks involved.