What does the Noodles & Company buyer represent regarding their authority to enter into the agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.a Buyer and Guarantor, jointly and severally, represent and warrant to Seller (each of which shall be deemed material and independently relied upon by Seller) as follows:
- (i) Buyer and each entity comprising Buyer, if applicable, is duly organized, validly existing and in good standing under the laws of the state of its organization with full power and authority to own its properties and assets and to conduct its business as now conducted or proposed to be conducted.
- (ii) Buyer has the full power and authority to enter into and perform this Agreement and to consummate the transactions contemplated by this Agreement in accordance with the terms of this Agreement.
- (iii) Buyer has taken all necessary corporate actions to authorize and approve the execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement. This Agreement constitutes a legal, valid and binding obligation of Buyer and Guarantor enforceable against Buyer and Guarantor in accordance with its terms.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the buyer represents and warrants that they possess the full power and authority to enter into and perform the Franchise Agreement, and to complete the transactions outlined within the agreement according to its terms. This signifies that the buyer has the legal capacity and organizational authorization to commit to the obligations and responsibilities detailed in the agreement.
Furthermore, the buyer represents that they have undertaken all necessary corporate actions to authorize and approve the execution, delivery, and performance of the agreement and its contemplated transactions. This implies that the buyer has followed the proper internal procedures, such as board resolutions or member consents, to ensure that the agreement is duly authorized and binding. The agreement constitutes a legal, valid, and binding obligation of the buyer, enforceable against them in accordance with its terms.
In practical terms, this means that Noodles & Company relies on these representations when entering into the agreement with the buyer. If these representations are found to be untrue, it could lead to legal consequences, including breach of contract claims. Therefore, it is crucial for prospective Noodles & Company franchisees to ensure they have the necessary authority and have followed all required procedures before signing the agreement.