In the Potbelly Sandwich Works FDD, where is the term 'Purchaser Indemnified Parties' defined?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 10.02 Agreement of Seller to Indemnify. Subject to the terms and conditions of this Article X, from and after the Closing, Seller hereby agrees to indemnify, defend and hold Purchaser and Guarantor (collectively, the "Purchaser Indemnified Parties") harmless from and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses including interest, penalties and attorneys' fees and expenses (collectively, "Damages") asserted against, resulting to, imposed upon or incurred by any Purchaser Indemnified Party by reason of or resulting from: (a) the Retained Liabilities; (b) a breach by Seller of any of its representations or warranties contained in Article IV of this Agreement; (c) a breach by Seller of any of its covenants or agreements contained in this Agreement, other than any such covenants or agreements contained in Section 6.08; (d) a breach by Seller of any of its covenants or agreements contained in Section 6.08 to the extent resulting from Seller's or its Affiliates' gross negligence or willful misconduct; or (e) the termination by Seller of the employment of any Employees (other than any severance or similar costs resulting from the termination of any such Employees).
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the term "Purchaser Indemnified Parties" is defined in Section 10.02 of the Asset Purchase Agreement. This section outlines the agreement of the Seller (Potbelly Sandwich Works, LLC) to indemnify, defend, and hold harmless the Purchaser and Guarantor, who are collectively referred to as the "Purchaser Indemnified Parties." This indemnification is subject to the terms and conditions of Article X of the agreement and applies from and after the closing date.
Specifically, Potbelly Sandwich Works agrees to protect the Purchaser Indemnified Parties from all demands, claims, actions, assessments, losses, damages, liabilities, costs, and expenses, including interest, penalties, and attorneys' fees, that may arise due to several factors. These include the Retained Liabilities, any breach by Potbelly Sandwich Works of its representations or warranties in Article IV of the agreement, any breach by Potbelly Sandwich Works of its covenants or agreements within the agreement (excluding those in Section 6.08), a breach by Potbelly Sandwich Works of covenants or agreements in Section 6.08 resulting from gross negligence or willful misconduct by Potbelly Sandwich Works or its Affiliates, or the termination of employment of any Employees by Potbelly Sandwich Works.
This definition is important for a prospective franchisee because it clarifies the extent to which Potbelly Sandwich Works will protect the purchaser and guarantor from potential liabilities and damages arising from specific actions or breaches by Potbelly Sandwich Works. Understanding this indemnification clause is crucial for assessing the risks and responsibilities associated with purchasing assets from Potbelly Sandwich Works and becoming a franchisee.