On what day of the week is the Royalty Fee payment due to Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
Before your Shop opens for business, you must sign and deliver to us the documents we require to authorize us to debit your business checking or other bank account automatically for the Royalty, the Brand Fund contribution (defined in Subsection 9.B. below), and other amounts due under this Agreement or in connection with the Shop's operation, including amounts due for your purchases of Potbelly Trade Secret Products, Potbelly Branded Products, other items, and services from us, our affiliates and/or unaffiliated vendors (the "Electronic Funds Transfer Account" or "EFTA"). We will debit your EFTA for the Royalty and Brand Fund contribution by the close of business on each Wednesday (or, if applicable, on the next banking business day) on account of the previous week's Total Revenue. We will debit the EFTA for other amounts you owe us, our affiliates and/or unaffiliated vendors on the day we specify. We may require you to pay for purchases electronically (and to initiate the electronic payment process) before we prepare for shipment and send you Potbelly Trade Secret Products, Potbelly Branded Products, and other items you order. You agree to deposit funds into the EFTA to cover our withdrawals and to report your Total Revenue as we require.
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, royalty and brand fund contribution payments are due every Wednesday. Specifically, Potbelly Sandwich Works will debit the franchisee's Electronic Funds Transfer Account (EFTA) by the close of business each Wednesday. This payment covers the previous week's total revenue. If Wednesday is not a banking business day, the payment will be debited on the next banking business day.
This payment method requires franchisees to maintain sufficient funds in their EFTA to cover these withdrawals and to accurately report their total revenue. If a franchisee fails to report total revenue, Potbelly Sandwich Works has the right to debit the EFTA for 120% of the last royalty and brand fund contribution amount, along with any applicable late fees and interest. If the debited amount is less than what is actually owed, Potbelly Sandwich Works will debit the EFTA for the remaining balance. Conversely, if the debited amount exceeds what is owed, the excess will be credited against the following week's payment.
This electronic funds transfer system ensures that Potbelly Sandwich Works receives timely payments and simplifies the payment process for franchisees. However, it also places a responsibility on the franchisee to accurately track and report revenue and maintain adequate funds in the designated account to avoid penalties or discrepancies in payments.