What representations and warranties does the Holder make when acquiring a Note from Jersey Mikes?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Holder's Representations and Warranties.
- i. Holder represents and wa rrants that (1) it has re ceived all informa tion it has requested from Maker that it considers necessary or appropriate for deciding whether to acquire this Note, (2) it has had an opportunity to ask questions and receive answers from Maker regarding the terms and conditions of this Note and to obtain a ny additional information necessary to ve rify the a ccuracy of the information given the Holder and (3) it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of purchasing this Note.
- ii. Holder represents and warrants that it is acquiring this Note solely for its own account and beneficial interest, not for sale or with a view to distribution of this Note, has no present intention of selling, granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, when acquiring a Note, the Holder (in this case, Jersey Mike's Franchise Systems, LLC) makes several representations and warranties. The Holder confirms that it has received all necessary information requested from the Maker to decide whether to acquire the Note. This implies that Jersey Mike's conducts its own due diligence before acquiring the Note, ensuring they have sufficient information to assess the investment. The Holder also confirms they had the opportunity to ask questions and receive answers from the Maker regarding the Note's terms and conditions, and to verify the accuracy of the information provided. This step is crucial for clarifying any uncertainties and ensuring transparency in the transaction.
Furthermore, the Holder represents that it possesses the necessary knowledge and experience in financial and business matters to evaluate the merits and risks of purchasing the Note. This suggests that Jersey Mike's has internal expertise or relies on external advisors to assess the financial implications of the Note. The Holder also warrants that it is acquiring the Note solely for its own account and beneficial interest, and not for sale or distribution. This indicates that Jersey Mike's intends to hold the Note as an investment for its own purposes, rather than using it for speculative trading or distribution to other parties.
These representations and warranties are standard practice in financial transactions to protect both parties involved. They ensure that the Holder has conducted proper due diligence, understands the risks, and intends to hold the Note for investment purposes. For a prospective franchisee, this indicates that Jersey Mike's approaches financial dealings with caution and a thorough understanding of the associated risks.