What is the significance of the 'Closing Date' in relation to the seller's indemnification obligations for Noodles & Company restaurant operations?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
ion.** Neither Seller nor Buyer shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the transactions contemplated by this Agreement.
- 1.b Landlord Consents; Estoppels and Waivers. All required consents to the Assignment of Lease Properties or Subleases required from landlords shall have been obtained.
Article 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer to effect the transactions contemplated by this Agreement shall be subject to fulfillment or waiver at or prior to the Closing Date of the following conditions set forth below. In the event any condition is not satisfied as aforesaid, Seller shall have the right to extend the time for Closing for up to sixty (60) days.
1.a Performance of Obligations. Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.
1.b Inspection Objections. All Inspection Objections that Seller is obligated hereunder to correct shall have been corrected to Buyer's reasonable satisfaction, unless waived by Buyer.
1.c Documents. Buyer shall have received the documents specified in Article IX of this Agreement.
1.d Franchisee Approval. Buyer shall have been approved, in Seller's sole discretion, as a Noodles & Company franchisee or, if Buyer already is a Noodles & Company franchisee, Buyer shall have been approved, in Seller's sole discretion, for expansion; provided that, as a condition precedent to Seller's consideration as to whether to grant such approval, Buyer shall have delivered to Seller all documentation and information requested by Seller.
1.e Representations. All representations and warranties of Seller in this Agreement shall be true and correct in all material respects on and as of the Closing Date.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to effect the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver at or prior to the Closing Date of the following conditions set forth below. In the event any condition is not satisfied as aforesaid, Seller shall have the right to extend the Closing for up to sixty (60) days.
- 1.a Performance of Obligations. Buyer shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Noodles & Company outlines the seller's responsibilities regarding the operation of the restaurants up to and including the Closing Date. Specifically, the seller must operate the restaurants and maintain the purchased assets in the usual and ordinary course of business. This includes maintaining an appropriate level and mix of inventory to allow the restaurants to operate normally at closing. The seller is also responsible for maintaining the fixed assets in substantially the same condition as they were at the time of inspections, with normal wear and tear excepted.
Furthermore, the seller's representations and warranties within the agreement must be true and correct in all material respects on and as of the Closing Date. This places a significant responsibility on the seller to ensure that all aspects of the business, from inventory to physical assets and legal representations, are accurately maintained and represented up to the point of transfer to the buyer.
Additionally, Noodles & Company requires that it will not be practical to comply with bulk sales laws on the Closing Date. Therefore, the seller agrees to defend, indemnify, and hold the buyer harmless from any costs, losses, liabilities, claims, and expenses arising from the failure to comply with such laws. This indemnification obligation provides a level of financial protection to the buyer against potential liabilities stemming from non-compliance with bulk sales regulations, shifting the risk associated with these regulations to the seller.