What does 'control' mean in the context of an 'Affiliate' of Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
"Affiliate" Any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party.
The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the term 'control' within the context of an 'Affiliate' refers to the power to direct the management and policies of an entity. This power can be exercised directly or indirectly.
This control can be exerted through various means, including ownership of voting securities, contractual agreements, or other arrangements. Essentially, if a person or entity has the ability to dictate the direction of another entity's management and policies, they are considered to have control over that entity.
For a prospective Potbelly Sandwich Works franchisee, this definition is important because it clarifies the scope of 'Affiliate' relationships that could have implications for the franchise agreement. For example, it could affect non-compete clauses or other obligations if the franchisee or Potbelly Sandwich Works itself has an affiliate that could be seen as impacting the franchise operation. Understanding this definition helps franchisees recognize potential conflicts of interest or other issues related to affiliated entities.