What section of this document outlines the 'Liabilities to be Assumed' in relation to Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
- Section 2.04 Liabilities to be Assumed. On the terms and subject to the conditions of this Agreement, in partial consideration of the sale, transfer, conveyance and assignment to Purchaser of the Assets, as of the Effective Time, Purchaser shall assume the following debts, liabilities and obligations of Seller and/or its Affiliates (collectively, the "Assumed Liabilities"):
- (a) all taxes, assessments and other liabilities of Seller for which Purchaser receives a credit pursuant to Section 3.03;
- (b) the obligations and liabilities of Seller under the Assigned Contracts that accrue or arise from and after the Effective Time;
- (c) to the extent not otherwise covered by Section 2.04(b), the obligations and liabilities of Seller and/or its Affiliates that arise from and after the Effective Time described in Section 6.05(a), Section 6.06, Section 6.09(b) and Section 6.09(c);
- (d) all liabilities and obligations of Purchaser relating to severance or similar costs associated with terminated employees set forth in Section 7.01; and
- (e) all other liabilities and obligations arising out of or relating to Purchaser's ownership or operation of the Business and the Assets on or after the Effective Time.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, Section 2.04 outlines the liabilities to be assumed. Specifically, it details that on the terms and conditions of the Asset Purchase Agreement, the purchaser assumes certain debts, liabilities, and obligations of Potbelly Sandwich Works or its affiliates as of the Effective Time.
The liabilities assumed by the purchaser include all taxes, assessments, and other liabilities of Potbelly Sandwich Works for which the purchaser receives a credit as per Section 3.03 of the agreement. Additionally, the purchaser assumes obligations and liabilities under the Assigned Contracts that accrue from and after the Effective Time. This also extends to obligations and liabilities of Potbelly Sandwich Works or its affiliates arising from and after the Effective Time as described in specific sections of the agreement, such as Sections 6.05(a), 6.06, 6.09(b), and 6.09(c).
Furthermore, the purchaser is responsible for all liabilities and obligations relating to severance or similar costs associated with terminated employees, as outlined in Section 7.01. Finally, the purchaser assumes all other liabilities and obligations arising out of or relating to the purchaser's ownership or operation of the business and the assets on or after the Effective Time. This section clearly defines the scope of financial and operational responsibilities that the purchaser takes on as part of the asset purchase agreement with Potbelly Sandwich Works.