What representations and warranties does the Purchaser make to the Seller in the Potbelly Sandwich Works agreement?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
o Purchaser, Guarantor or any of their respective assets.
- Section 5.05 Financial Capabilities. On the date hereof Purchaser has, and on the Closing Date Purchaser will have, sufficient funds to pay the Closing Amount and the IFF due at the Closing in accordance with Section 2.05.
- Section 5.06 Brokers and Finders. Neither Purchaser nor Guarantor nor any of their respective Representatives has taken any action with respect to any broker or finder that would give rise to any liability on the part of Seller or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated by this Agreement or the agreements contemplated hereby that would give rise to any liability on the part of Seller.
- Section 5.07 Consents and Approvals. Except for registrations and approvals required in order for Purchaser to conduct business at the Shops following the Effective Time, no consent, approval or authorization of, or declaration, filing or registration with, any Governmental Authority is required by Purchaser or Guarantor in connection with the execution, delivery and performance of this Agreement or the other Transaction Agreements or the consummation of the transactions contemplated hereby and thereby. Purchaser holds (or at the Closing will hold) all sales tax certificates of authority and other tax registration and certificates required to collect and remit sales tax in connection with the operation of the Shops.
- Section 5.08 Seller Disclosure. Neither Purchaser nor Guarantor has received or relied upon any representation, warranty or guarantee, whether oral or written or express or implied, as to the potential value, volume, profits or success of the Business or any Shop. Purchaser and Guarantor have previously received a copy of Potbelly Franchising, LLC's current Franchise Documents, including all related disclosures, with Acknowledgment of Receipt attached thereto and have signed, dated and delivered to Potbelly Franchising, LLC such Acknowledgment of Receipt.
- Section 5.09 Knowledge. To the Knowledge of Purchaser, there are no facts or circumstances relating to Purchaser or Guarantor that would materially adversely affect the ability of Purchaser or Guarantor to perform their respective obligations under this Agreement or the other Transaction Agreements.
ARTICLE VI.
COVENANTS OF THE PARTIES
Section 6.01 Inspection; Condition of Assets.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the Purchaser makes several representations and warranties to the Seller (Potbelly Sandwich Works, LLC) within the Asset Purchase Agreement. These assurances cover various aspects of the Purchaser's financial capabilities, compliance with regulations, and understanding of the business opportunity. Specifically, the Purchaser warrants that they possess sufficient funds to cover the Closing Amount and the Initial Franchise Fee (IFF) due at closing. They also affirm that they have not engaged any brokers or finders that could create liability for the Seller.
Furthermore, the Purchaser represents that they have obtained all necessary governmental consents and approvals to conduct business at the Shops, including sales tax certificates. They acknowledge that they have not relied on any representations or guarantees from the Seller regarding the potential value, volume, profits, or success of the business, and that they have received and reviewed Potbelly Franchising, LLC's current Franchise Documents. The Purchaser also warrants that there are no known facts or circumstances that would materially and adversely affect their ability to fulfill their obligations under the agreement.
These representations and warranties are crucial because they provide the Seller with assurances about the Purchaser's ability to complete the transaction and operate the franchise in compliance with applicable laws and regulations. If any of these representations prove to be false or inaccurate, it could give the Seller grounds to terminate the agreement or seek damages from the Purchaser. This framework protects Potbelly Sandwich Works from potential risks associated with the transfer of ownership and ensures that the Purchaser is fully aware of the obligations and responsibilities involved in operating a Potbelly Sandwich Works franchise.