Regarding Assumed Contracts, what does the Noodles & Company seller represent about existing or potential defaults?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
ssets, Inventory, Permits and Licenses and Change Fund free and clear of all liens, security interest and similar encumbrances.
Certain of the representations and warranties of Seller are made "to Seller's knowledge" or refer to what is "known" to Seller or of what Seller is "aware." The Parties hereto agree that the meaning of such expressions shall with respect to Seller in all cases be understood as comprising the actual knowledge and belief of the corporate officers of Seller without any type of additional investigation thereof. Seller hereby covenants and agrees that the foregoing representations and warranties are true and correct as of the date given and shall be true and correct as of Closing unless Seller notifies Buyer in writing otherwise.
Article 4
REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTOR
- 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.
Buyer and Guarantor each hereby covenants and agrees that the foregoing representations and warranties are true and correct as of the date given and shall be true and correct as of the Closing unless Buyer notifies Seller in writing otherwise.
1.b FDD. Buyer acknowledges that it has received the information contained in the Noodles & Company Franchise Disclosure Document dated ___________, 20__ (the "FDD").
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Noodles & Company Franchise Disclosure Document, the buyer represents and warrants to the seller that they are duly organized, validly existing, and in good standing under the laws of their state of organization. This includes having the full power and authority to own properties and assets, conduct business, enter into and perform the agreement, and consummate the transactions as per the agreement's terms. The buyer also confirms they have taken all necessary corporate actions to authorize and approve the execution, delivery, and performance of the agreement, making it a legal, valid, and binding obligation enforceable against them. These representations and warranties must be true and correct as of the date given and as of the closing date, unless the buyer notifies the seller otherwise in writing.
Furthermore, the buyer acknowledges receipt of the Noodles & Company Franchise Disclosure Document (FDD) and confirms that they have not relied on any representations or statements of projected or forecasted sales, profits, or earnings of the restaurants made by the seller or their representatives, other than what is contained in the FDD. The buyer understands that future sales, profits, and earnings at the restaurants may vary from past performance. The buyer's decision to enter into the Franchise Agreements is based solely on the information provided in the FDD, not on any other information from the seller or third parties.
In practical terms, this means a prospective Noodles & Company franchisee is responsible for conducting their own due diligence and not relying on any verbal or projected financial information from the seller. Any claims about the business opportunity must be verified independently through the FDD and other reliable sources. The franchisee bears the risk if the actual performance of the restaurant does not meet their expectations, as long as the seller has provided accurate information in the FDD and the buyer has acknowledged this.