What activities are included and excluded from the definition of 'Business' for Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Business" means the business of owning and using the Assets and operating the Shops, in each case, as conducted by Seller as of the date of this Agreement.
For the avoidance of doubt, "Business" does not include (a) the ownership or use of any assets or properties of Seller or its Affiliates other than the Assets or (b) the operations or conduct of any business activity by Seller or its Affiliates that does not relate exclusively to the Shops (including any business activity that may relate to, support or benefit one or more Shops, on the one hand, and one or more other System Shops, on the other hand).
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 'Business' is specifically defined in the context of agreements and operations. The definition includes owning and using assets, as well as operating Potbelly Sandwich Works shops, mirroring how the seller conducts business on the agreement date. This encompasses the core activities of running a Potbelly Sandwich Works franchise.
However, the definition of 'Business' for Potbelly Sandwich Works explicitly excludes certain activities. It does not include the ownership or use of any assets or properties of the seller or its affiliates, except for the assets directly related to the Potbelly Sandwich Works shops. Additionally, it excludes any business activities conducted by the seller or its affiliates that do not exclusively pertain to the shops. This carve-out includes any activities that might support or benefit both the Potbelly Sandwich Works shops and other system shops.
In practical terms, this means that a franchisee's 'Business' is limited to the operations of their specific Potbelly Sandwich Works shops and the assets associated with those shops. It clarifies that franchisees are not involved in or responsible for other business ventures or assets of the franchisor or its affiliates, unless those ventures are exclusively tied to the franchisee's shops. This distinction helps to define the scope of the franchisee's responsibilities and investments under the franchise agreement.