Does the Noodles & Company seller warrant that they have the 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.
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.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the buyer (franchisee) and their guarantor represent and warrant to the seller (Noodles & Company) that they possess the full power and authority to enter into and fulfill the agreement. This includes having the legal capacity to own assets, conduct business, and complete the transactions outlined in the agreement. Additionally, the buyer confirms they have taken all necessary corporate actions to authorize and approve the execution, delivery, and performance of the agreement, ensuring it is a legally binding obligation. This is a standard practice in franchising to ensure both parties are legally capable of fulfilling their contractual duties.
Noodles & Company requires that the representations and warranties made by the buyer are true and correct both at the time they are given and as of the closing date of the transaction. This means the franchisee must ensure that all information provided remains accurate throughout the process. If there are any changes, the buyer is obligated to notify Noodles & Company in writing. This ongoing accuracy is crucial for maintaining the integrity of the agreement and protecting the interests of all parties involved.
Furthermore, the Noodles & Company franchise agreement stipulates that the buyer's representations and warranties are considered material and are independently relied upon by the seller. This highlights the importance Noodles & Company places on the accuracy and truthfulness of the information provided by the franchisee. Any misrepresentation or breach of these warranties could have significant legal and financial consequences for the franchisee, potentially leading to termination of the agreement or other legal remedies for Noodles & Company.