Does the Potbelly Sandwich Works agreement specify who the agreement is binding upon?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12.04 Assignment. This Agreement, and all of the provisions hereof, shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. No Party may assign this Agreement or any of its rights hereunder or delegate any of its obligations hereunder without the prior written consent of the other Parties; provided that Seller may, without the consent of Purchaser or any Guarantor, assign this Agreement or any of its rights hereunder, or delegate any of its obligations hereunder, to any of its Affiliates (provided that Seller remains principally liable for its obligations hereunder) or to any successor in interest (whether by purchase, merger, consolidation, conversion or otherwise) to all or
substantially all of the business operations and/or assets of Seller. Any attempt or purported assignment or delegation in contravention of the foregoing shall be deemed void ab initio.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the Asset Purchase Agreement specifies that it is binding upon the parties involved and their respective successors and permitted assigns. This means that the agreement not only applies to Potbelly Sandwich Works, the purchaser, and any guarantor, but also extends to any entities or individuals who legally take over their rights or obligations, provided the assignment is permitted.
However, the agreement stipulates that no party can assign the agreement or their rights or delegate their obligations without prior written consent from the other parties. There is an exception for Potbelly Sandwich Works, which can assign the agreement to its affiliates or any successor in interest without needing consent from the purchaser or guarantor, provided that Potbelly Sandwich Works remains principally liable for its obligations.
Any attempt to assign or delegate the agreement in a way that contradicts these terms will be considered void from the beginning. This clause ensures that all parties are aware of their responsibilities and that any changes to the agreement's binding parties must adhere to the outlined procedures, maintaining the integrity and enforceability of the contract.