What agreements are included in the 'Ancillary Agreements' definition for Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Seller desires to transfer, assign and sell to Purchaser, and Purchaser desires to acquire and purchase from Seller, all of Seller's right, title and interest in and to certain of the assets used or to be used exclusively in the operation of the Shops, in each case upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Agreements (except as otherwise indicated, capitalized terms used but not defined in these recitals have the meaning ascribed to such terms in Section 1.01 below or referenced in Section 1.02 below);
WHEREAS, at the Closing, Seller, Purchaser and Guarantor shall enter into separate assignments of lease or subleases pursuant to which Seller shall assign the lease for Leased Real Property to Purchaser or sublease the Leased Real Property to Purchaser, each such assignment and/or sublease in form and substance acceptable to the parties thereto (collectively, the "Assignments" or "Subleases", as applicable);
WHEREAS, in connection with the purchase of the assets described herein, upon the terms and subject to the conditions set forth herein, Purchaser and Guarantor shall execute and deliver to Seller the Franchise Documents at the Closing with respect to the Shops; and
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the term 'Ancillary Agreements' is referenced within the context of an Asset Purchase Agreement. Specifically, the document mentions that the Purchaser and Seller will enter into separate assignments of lease or subleases for the Leased Real Property. These assignments or subleases are collectively referred to as the 'Assignments' or 'Subleases' and are considered Ancillary Agreements. Additionally, in connection with the purchase of assets, the Purchaser and Guarantor will execute and deliver the Franchise Documents to the Seller at closing.
For a prospective Potbelly Sandwich Works franchisee, this means that in addition to the standard franchise agreement, there are other related legal documents they will need to understand and sign, particularly when purchasing an existing Potbelly Sandwich Works location. These include lease assignments or subleases, which transfer the rights and responsibilities of the property lease from the seller to the buyer.
The franchisee should carefully review these ancillary agreements with legal counsel to fully understand their obligations and rights related to the property lease and the overall asset purchase. Understanding these agreements is crucial to ensure a smooth transition and avoid potential legal or financial issues down the line. The FDD also mentions a Guarantor, which may be required to ensure obligations are met.