What is the amount of the late fee for Potbelly Sandwich Works, and when is it applied?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Franchisee Advisory Council | Council Assessments | When levied | We have right to enforce payments, which may vary among councils; there currently are no councils. |
| Testing | Costs of Testing | When billed | This covers the costs of testing new products or inspecting new suppliers you propose; test costs depend on nature of products and supplier location. |
| Relocation | 20% of our then-current initial franchise fee | As incurred | You must pay us a relocation fee if you move to a new site and we are involved in the process. |
| Rent | Varies | Monthly | If we sublease the premises to you, you must pay rent directly to the landlord or to us, at our discretion. If you pay rent to us, we may charge an amount that is higher than the rent due under the underlying lease. |
| Public Offering | At least $10,000 plus out-of-pocket expenses | When billed | Due to review your offering materials if you seek to raise money through stock or similar offerings. |
| Operations Manual | $500 | When billed | Charge for replacement copy or access if your access to Operations Manual is lost or destroyed. |
| Column 1 | Column 2 | Column 3 | Column 4 |
| Type of fee1 | Amount | Due Date | Remarks |
| Audit | Cost of inspection or audit (amount of which depends on circumstances and extent of your non- compliance) | 15 days after billing | Due if you do not give us reports, supporting records, or other required information or understate required Royalties or other amounts by more than 2%. |
| Late Fee | $100 | May be auto debited from your account | Due for each late or dishonored payment. |
| Interest | Lesser of 1.5% per month or highest commercial contract interest rate law allows | May be auto debited from your account | Due on all overdue amounts more than 7 days late. |
| Non-Approved Shop Opening | $5,000 for each day your Shop operates without our approval | May be auto debited from your account | Due if you begin operating Shop before we give our approval. |
| Management Fee | Manager’s then-current daily salary plus direct expenses | As incurred | Due when we (or a third party) manage Shop after Managing Owner’s death or disability or after your default or abandonment. |
| Costs and Attorneys’ Fees | Will vary under circumstances and depend on nature of your non-compliance | As incurred | Due when we incur costs and expenses to enforce Franchise Agreement against you, whether or not we begin formal legal proceeding. |
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, a late fee of $100 is applied for each late or dishonored payment. This fee may be automatically debited from the franchisee's account. This means that if a Potbelly Sandwich Works franchisee fails to make a payment on time or if a payment is dishonored by their bank, they will incur a $100 late fee.
It is important for prospective franchisees to understand that Potbelly Sandwich Works has the right to automatically debit this fee from their account. Franchisees should ensure they have sufficient funds available in their designated Electronic Funds Transfer Account (EFTA) to cover all payments to avoid incurring late fees. Dishonored payments can occur for a variety of reasons, such as insufficient funds or incorrect banking information, so franchisees must be diligent in managing their accounts.
Late fees are a common practice in franchising to encourage timely payments and cover the administrative costs associated with processing late or dishonored payments. Franchisees should be aware of all payment due dates and ensure they have a system in place to make payments on time to avoid these fees. The fact that Potbelly Sandwich Works may auto-debit the late fee emphasizes the importance of maintaining accurate banking information and sufficient funds.