What is the definition of 'Assets' in the context of the agreement involving Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Business" means the business of owning and using the Assets and operating the Shops, in each case, as conducted by Seller as of the date of this Agreement.
For the avoidance of doubt, "Business" does not include (a) the ownership or use of any assets or properties of Seller or its Affiliates other than the Assets or (b) the operations or conduct of any business activity by Seller or its Affiliates that does not relate exclusively to the Shops (including any business activity that may relate to, support or benefit one or more Shops, on the one hand, and one or more other System Shops, on the other hand).
Section 2.03 Retained Assets. Notwithstanding anything in this Agreement to the contrary, the Assets to be transferred and assigned by Seller to Purchaser hereunder shall exclude the following (collectively, the "Retained Assets"): (a) any tangible assets of Seller that are not located at a Shop at the Effective Time; (b) any intangible assets of Seller that relate to more than just the Shops; (c) any patents, trademarks, copyrights, domain names, social media accounts or other intellectual property owned, under application or licensed by Seller or any of its Affiliates; (d) any owned real property related to the Shops (including any improvements thereon or thereat); (e) other than the Cash Bank included in the Special Items, any cash located at the Shops as of the Effective Time, including any cash in the Cash Safes as of the Effective Time; (f) any receivables related to the operations of the Shops prior to the Effective Time; (g) any deposits related to utility services; (h) any insurance policies, including all of Seller's rights in and to unearned premiums, refunds, and all claims or possible claims under such policies; (i) any current or historical files or records of Seller; (j) the application software and programs and wireless network software utilized in the point of sale (POS) system, manager's work station (MWS) and/or training work station (TWS) located in the Shops; (k) warranties and/or service agreements for the maintenance of Equipment located in the Shops, including the cash register system, coin changer, time clock, outside display board and drive-thru audio system except any warranties and/or service agreements that (i) automatically transfer to the Purchaser, as the new owner of the Equipment, (ii) do not require the consent of any third parties and (iii) do not impose any costs or expenses on Seller or
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, 'Assets' are defined within the context of an asset purchase agreement. The agreement pertains to the transfer of assets from the seller (Potbelly Sandwich Works, LLC) to the purchaser.
Specifically, 'Business' is defined as owning and using the Assets and operating the Shops, as conducted by the Seller on the date of the agreement. However, the definition of 'Business' does not include assets or properties of the Seller or its affiliates other than the Assets, or business activities that do not relate exclusively to the Shops. This clarifies that the assets in question are those directly involved in the operation of the Potbelly Sandwich Shops being transferred.
Furthermore, the agreement specifies 'Retained Assets,' which are assets excluded from the transfer to the purchaser. These include tangible assets not located at a Shop, intangible assets relating to more than just the Shops, intellectual property, owned real property, cash (other than the Cash Bank included in the Special Items), receivables prior to the effective time, utility deposits, insurance policies, files/records of the Seller, software used in POS systems, and certain warranties/service agreements. This distinction is important for a prospective franchisee to understand what they are acquiring and what remains with Potbelly Sandwich Works.