What is the definition of 'Affiliate' in the Potbelly Sandwich Works SDAA?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.04 Certain Definitions.
The terms listed below have the meanings which follow them and include the plural as well as the singular.
Other terms are defined elsewhere in this SDAA in the context in which they arise.
- "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' 2025 Franchise Disclosure Document (FDD), an "Affiliate" is defined within the context of the Single Development Area Agreement (SDAA). The term encompasses any person or entity that either directly or indirectly owns or controls the referenced party, is directly or indirectly owned or controlled by the referenced party, or operates under common control with the referenced party.
The definition of "control" is further clarified to mean the power to direct the management and policies of an entity. This control can be exercised directly or indirectly, through various means such as ownership of voting securities or contractual agreements.
For a prospective Potbelly Sandwich Works franchisee, understanding this definition is crucial because it clarifies the scope of relationships that could impact their franchise agreement. For example, the franchisor's obligations and rights could extend to its affiliates, and the franchisee's dealings with related entities could be subject to the terms of the SDAA. This definition helps to establish clear boundaries and responsibilities within the franchise network.