For Potbelly Sandwich Works, what is the definition of 'Survival Period' in the context of the agreement?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 10.01 Survival. The representations, warranties, covenants and agreements made by the Parties in this Agreement shall survive the Closing to the extent provided for in this Section 10.01 (the applicable survival period, the "Survival Period").
(a) All of the representations and warranties of Seller contained in this Agreement shall survive the Closing for a period of eighteen (18) months following the Closing Date, except that the representation and warranties of Seller contained in Section 4.11 (Environmental Matters) shall survive the Closing until the expiration of the statute of limitations applicable to the matters covered thereby.
- (b) All of the representations and warranties of Purchaser and Guarantor contained in this Agreement shall survive until the expiration or termination of all Purchaser Franchise Agreements or, if earlier, until the latest date permitted by applicable Law.
- (c) All covenants and agreements contained in this Agreement that by their terms are to be performed at or after the Closing shall survive the Closing until fully discharged or, if earlier, the latest date permitted by applicable Law. All other covenants or agreements made by the Parties in this Agreement shall not survive the Closing and shall terminate and expire at the Closing.
- (d) Upon the expiration of the applicable Survival Period, the representations, warranties, covenants and agreements made by the Parties in this Agreement shall expire, and all claims for any breach of such representations, warranties, covenants or agreements shall be deemed waived unless a Claims Notice with respect to the breach shall have been given to the breaching Party in accordance with Section 10.05(a) or Section 10.05(b) prior to the expiration of such Survival Period, in which event such representations, warranties, covenants or agreements shall survive to the extent of the Claim referred to in such notice until such Claim has been resolved.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the "Survival Period" refers to the duration for which the representations, warranties, covenants, and agreements made by the parties in the Asset Purchase Agreement remain in effect after the closing date. This period is defined in Section 10.01 of the agreement.
Specifically, the representations and warranties made by the seller (Potbelly Sandwich Works, LLC) survive the closing for 18 months, with an exception for environmental matters, which survive until the expiration of the applicable statute of limitations. The representations and warranties of the purchaser and guarantor remain in effect until the termination of all Purchaser Franchise Agreements or the latest date permitted by law, whichever comes first. Covenants and agreements that are to be performed at or after the closing survive until they are fully discharged or until the latest date permitted by applicable law.
After the applicable Survival Period expires, all representations, warranties, covenants, and agreements made by the parties also expire. Any claims for breach are waived unless a Claims Notice has been given to the breaching party before the expiration of the Survival Period. If a Claims Notice is given, the relevant representations, warranties, covenants, or agreements survive until the claim is resolved. This ensures that both parties remain accountable for their commitments for a defined period after the transaction is completed, allowing time to address any potential issues or breaches that may arise.