Is the Brand Fund considered an asset of Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund is not our asset. Although the Brand Fund is not a trust, we will hold all Brand Fund contributions for the contributors' benefit and use contributions only for the purposes described above. We have no fiduciary obligation to you for administering the Brand Fund or any other reason.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–49)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the Brand Fund is not considered an asset of Potbelly Sandwich Works. While Potbelly Sandwich Works manages the Brand Fund, it is explicitly stated that the funds are held for the benefit of the contributors and used for specific purposes related to advertising, marketing, and promotion of the Potbelly brand.
The FDD clarifies that Potbelly Sandwich Works will account for the Brand Fund separately from its other monies, although it does not necessarily keep Brand Fund contributions in a separate bank account. Potbelly Sandwich Works may use the Brand Fund to pay for expenses related to directing the fund and its programs, such as market research, advertising, and salaries of personnel who manage the fund.
This arrangement means that while franchisees contribute to the Brand Fund, those contributions are not considered revenue for Potbelly Sandwich Works itself. Potbelly Sandwich Works has the ability to manage and direct how the Brand Fund is spent, but it is obligated to use the funds for the benefit of the Potbelly Sandwich Works system, and the Brand Fund is not considered an asset on Potbelly Sandwich Works' balance sheet.