What does the Exit franchisee represent and warrant regarding their authority to enter into the Franchise Agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee represents and warrants that Franchisee and its officers, directors and shareholders have been duly authorized to enter into this Agreement and that the execution and performance of this Agreement is not in violation or breach, or cause the violation or breach, of any agreement or covenant between them and any of them and any third party or the violation or breach of any order, decree or judgment of any court or administrative agency.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the franchisee represents and warrants that they, along with their officers, directors, and shareholders, are duly authorized to enter into the Franchise Agreement. This means that the franchisee has the legal right and permission to sign the agreement and fulfill its obligations.
Furthermore, the franchisee warrants that entering into and performing the Franchise Agreement does not violate or breach any existing agreement or covenant they have with a third party. It also confirms that it does not violate or breach any order, decree, or judgment from any court or administrative agency. This is a critical assurance to Exit that the franchisee is not encumbered by any conflicting obligations that could prevent them from fully committing to and operating the Exit franchise.
This representation and warranty protect Exit by ensuring that the franchisee has the legal capacity and is free from conflicting obligations that could hinder their ability to operate the franchise successfully. It is a standard clause in franchise agreements to mitigate legal risks and ensure the franchisee's commitment to the terms of the agreement.