How does the Potbelly Sandwich Works's ability to terminate the Franchise Agreement if a site is not
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
If no Site is found by you and accepted by us within one hundred eighty (180) days after the Effective Date, then either we or you may terminate this Agreement upon written notice.
You acknowledge and agree that, if we recommend or give you information regarding a location proposed for the Site, that is not a representation, promise or warranty of any kind, express or implied, of the location's suitability for a Potbelly Shop or any other purpose or that the Shop will achieve a certain sales volume or a certain level of profitability at the Site. Similarly, our approval of a site and our rejection of other sites is not a representation, promise or warranty of any kind, express or implied, that an approved site will have a higher sales volume or be more profitable than a site which we did not approve. Our recommendation indicates only that we believe the location meets our then-acceptable criteria, unless we waive those criteria in a particular situation. Applying criteria that have appeared effective with other locations and sites might not accurately reflect the potential for all locations and sites, and demographic and/or other factors included in or excluded from our criteria could change, altering the potential of a location and site. The uncertainty and instability of these criteria are beyond our control, and we are not responsible if a location and site we recommend fail to meet your expectations. You acknowledge and agree that your acceptance of the Franchise was or will be based on your own independent investigation of a location's suitability for the Site. We are relying on your knowledge of the real estate market in your area and your ability to find a suitable location.
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, either Potbelly Sandwich Works or the franchisee can terminate the Franchise Agreement if a suitable site is not found and accepted within 180 days of the agreement's effective date. This termination option is designed to protect both parties if a viable location cannot be secured in a timely manner.
This clause highlights the importance of site selection in the franchise process. Potbelly Sandwich Works emphasizes that any recommendations or information they provide regarding potential locations are not guarantees of success or profitability. The franchisee is ultimately responsible for independently investigating and determining the suitability of a site. Potbelly Sandwich Works's approval of a site only indicates that it meets their current criteria, which may change and not accurately reflect the location's potential.
Furthermore, Potbelly Sandwich Works retains the right to accept or refuse the terms of any lease, sublease, or purchase agreement for the proposed site. The franchisee must submit the proposed Real Estate Agreement for review and comment before signing. If the franchisee signs the agreement before Potbelly Sandwich Works's approval, Potbelly Sandwich Works may revoke the franchise offer and site acceptance. This provision ensures that the real estate terms align with Potbelly Sandwich Works's standards and protects their brand and interests.
These stipulations underscore the shared responsibility in site selection and the potential for termination if a suitable location cannot be agreed upon within the specified timeframe. Prospective franchisees should carefully consider the site selection process and conduct thorough due diligence to mitigate the risk of termination due to site-related issues.