What constitutes a waiver of rights by a party in the Potbelly Sandwich Works SDAA?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
custom or practice of the parties at variance with it.
10.03 Exercise of Rights of Parties. The rights of Franchisor and Developer hereunder are cumulative and no exercise or enforcement by Franchisor or Developer of any right or remedy hereunder shall preclude the exercise or enforcement by Franchisor or Developer of any other right or remedy hereunder which Franchisor or Developer is entitled to enforce by law. If Developer commits any act of default under this SDAA for which Franchisor exercises its right to terminate this SDAA, Developer shall pay to Franchisor all actual, consequential, special and incidental damages Franchisor incurs as a result of the premature termination of this SDAA, regardless of whether or not such damages are reasonably foreseeable. Developer acknowledges and agrees that the proximate cause of such damages sustained by Franchisor is Developer's act of default and not Franchisor's exercise of its right to terminate. Notwithstanding the foregoing, and except as otherwise prohibited or limited by applicable law, any failure, neglect, or delay of a party to assert any breach or violation of any legal or equitable right arising from or in connection with this SDAA, shall constitute a waiver of such right and shall preclude the exercise or enforcement of any legal or equitable remedy arising therefrom, unless written notice specifying such breach or violation is provided to the other party within twelve (12) months after the later of: (a) the date of such breach or violation; or (b) the date of discovery of the facts (or the date the facts could have been discovered, using reasonable diligence) giving rise to such breach or violation.
10.04 Costs of Enforcement. If we incur costs and expenses to enforce our rights or your obligations under this SDAA because you have failed to comply with this SDAA, you agree to reimburse us for all costs and expenses we incur, including, without limitation, reasonable accounting, attorneys', arbitrators', and related fees. Your obligation to reimburse us arises whether or not we begin a formal legal proceeding against you to enforce this SDAA. If we do begin a formal legal proceeding against you to enforce this SDAA, the reimbursement obligation applies to all costs and expenses we incur preparing for, commencing, and prosecuting the legal proceeding and until the proceeding has come to a complete end (including appeals and settlements).
10.05 Injunctive Relief. We, as an alternative or supplement to arbitration pursuant to Sections 10.06, may obtain in any court of competent jurisdiction any injunctive relief, including temporary restraining orders and preliminary injunctions, against conduct or threatened conduct for which no adequate remedy at law may be available or which may cause us irreparable harm. We may seek and obtain such injunctive relief, without bond, but upon notice as required under applicable rules, in addition to such further and other relief as may be available at equity or law, and your sole remedy in the event of the entry of such injunction, shall be its dissolution, if warranted, upon hearing duly had (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). You and each of your Owners acknowledge that any violation of Sections 6 or 9.02, or any other breach of your obligations concerning the proprietary nature of the Confidential Information or the Branded System, would result in irreparable injury to us for which no adequate remedy at law may be available.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, a waiver of rights can occur if a party fails to assert a breach or violation of any legal or equitable right arising from or connected to the SDAA. To avoid this, the party must provide written notice specifying the breach or violation to the other party within twelve months of the later of the date of the breach or violation, or the date the facts were discovered or could have been discovered with reasonable diligence. This clause ensures that parties promptly address issues and do not delay in enforcing their rights, which could otherwise be interpreted as a waiver.
Additionally, Potbelly Sandwich Works and the developer waive, to the fullest extent permitted by law, any right to or claim for any exemplary, punitive, treble, and other forms of multiple damages against the other, except for the developer's obligation to indemnify Potbelly Sandwich Works for third-party claims and with respect to confidential information. Both parties agree that in the event of a dispute, the claiming party will be limited to equitable relief and recovery of actual damages sustained. This waiver limits the types of damages that can be sought in a dispute, focusing on direct losses rather than enhanced or punitive damages.
Furthermore, both Potbelly Sandwich Works and the developer irrevocably waive their right to a trial by jury in any action, proceeding, or counterclaim, whether at law or in equity. This waiver is made knowingly, voluntarily, without duress, and after consideration of its ramifications. The document also specifies that any disagreement shall be considered unique and not brought as a class action, with each party waiving any right to proceed against the other by way of class action or similar consolidated action. This provision aims to prevent Potbelly Sandwich Works from being burdened with the costs of litigating system-wide disputes and ensures that each dispute is treated individually.