How does Potbelly Sandwich Works communicate its standards and specifications to franchisees and suppliers?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
To maintain the quality of the Products that Potbelly Shops sell and our system's reputation, we may condition your right to buy or lease Operating Assets, inventory and other items, and services (besides those described above that you may obtain only from us, our affiliates and/or other specified exclusive sources) on their meeting our minimum standards and specifications and/or being acquired from suppliers we approve. We will issue and modify standards and specifications based on our, our affiliates', and our franchisees' experience in operating Potbelly Shops. Standards and specifications may impose minimum requirements for production, performance, reputation, prices, quality, design, and appearance. Our Operations Manual or other communications will identify our standards and specifications for you and (where appropriate) suppliers or only for suppliers (in the latter case where, for example, we give our standards and/or specifications to a supplier under a confidentiality agreement). There might be situations where you can obtain items from any supplier who can satisfy our requirements and, therefore, would be an approved supplier.
System Standards may cover terms and conditions of the sale and delivery of, and terms and methods of payment for, Potbelly Trade Secret Products, Potbelly Branded Products, and other items and services you obtain from us and affiliated and unaffiliated suppliers. This includes our and our affiliates' right to establish an electronic product ordering system and require your payment electronically before we prepare for shipment and send you Potbelly Trade Secret Products, Potbelly Branded Products, and other items you order. We and our affiliates have the right not to sell you any Potbelly Trade Secret Products, Potbelly Branded Products, or other items and not to provide you with services, or to do so only on a "cash-on-delivery" or other basis, if you are in default (but have not cured the default when required after written notice). You may not use any unapproved products as replacements.
Approved Suppliers
In the case of Potbelly Trade Secret Products and Potbelly Branded Products, suppliers will be limited to us, our affiliates and/or other specified exclusive sources, meaning that you must buy
those items during the franchise term only from us, our affiliates and/or the other specified exclusive sources at the prices we or they decide to charge. We restrict these items' sources to protect trade secrets and other intellectual property rights, assure quality, assure a reliable supply of products meeting our standards, achieve better terms of purchase and delivery service, control usage of the Marks by third parties, and monitor the manufacture, packaging, processing, and sale of these items.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–34)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the company communicates its standards and specifications to franchisees and suppliers through its Operations Manual or other written or electronic communications. These standards and specifications are based on the experience of Potbelly Sandwich Works, its affiliates, and its franchisees. They may cover minimum requirements for production, performance, reputation, prices, quality, design, and appearance.
For Potbelly Trade Secret Products and Potbelly Branded Products, suppliers are limited to Potbelly Sandwich Works, its affiliates, and/or other specified exclusive sources. For other operating assets, services, and items, suppliers may be limited to these exclusive sources at Potbelly Sandwich Works's option. Franchisees must buy certain meats, cheeses, bread, produce, ready-to-bake items, soups, sauces, canned/jarred items, condiments, dry foods, beverages, and packaging from unaffiliated designated sources. Franchisees must also use designated vendors for services like gift card processing, mobile app services, quality assurance, and music network services.
Prospective franchisees should note that Potbelly Sandwich Works retains the right to modify these standards and specifications. If a franchisee wishes to use a product, ingredient, supply, or service from an unapproved source, they must notify Potbelly Sandwich Works and provide samples for approval, potentially incurring testing or inspection fees. Potbelly Sandwich Works may limit the number of approved items, services, and/or suppliers as it deems best. This system ensures quality control and brand consistency but may limit a franchisee's flexibility in sourcing products and services.
Potbelly Sandwich Works also provides franchisees with Plans for the physical structure, exterior elements, and interior layout of the Potbelly Shop, including mandatory and suggested standards and specifications for size, dimensions, design, image, decor, Operating Assets, and color scheme. While franchisees are responsible for ensuring compliance with all applicable laws and regulations, Potbelly Sandwich Works's approved architect must review and accept these Plans. If a franchisee uses an architect other than Potbelly Sandwich Works's approved architect, they may be charged an architectural review fee of $2,000.