Can Potbelly Sandwich Works borrow from itself or its affiliates for the Brand Fund?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund may spend in any fiscal year more or less than the total Brand Fund contributions in that year, borrow from us or our affiliates (paying reasonable interest) to cover deficits, pay back outstanding principal amounts borrowed in prior years from us or third parties, or invest any surplus for future use. If we spend less than the total of all Brand Fund contributions received during any fiscal year, we may accumulate the sums for use in later years. We will use all interest earned on Brand Fund contributions to pay costs before using the Brand Fund's other assets.
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the Brand Fund may borrow from Potbelly Sandwich Works or its affiliates to cover deficits. If the Brand Fund spends more than it receives in contributions during a fiscal year, Potbelly Sandwich Works has the option to borrow funds to cover these shortages.
If Potbelly Sandwich Works does borrow from itself or its affiliates, it will pay reasonable interest on the borrowed amount. The Brand Fund is also able to pay back outstanding principal amounts borrowed in prior years from Potbelly Sandwich Works or third parties. This borrowing ability provides Potbelly Sandwich Works with flexibility in managing the Brand Fund and ensuring that marketing activities can continue even if there is a temporary shortfall in contributions.
Furthermore, Potbelly Sandwich Works can invest any surplus in the Brand Fund for future use. Any interest earned on Brand Fund contributions will be used to pay costs before using the Brand Fund's other assets. This approach ensures that the Brand Fund is managed responsibly and that contributions are used effectively to support the Potbelly Sandwich Works brand.