What duty does the Potbelly Sandwich Works SDAA say you agree to be bound by?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
YOU ACKNOWLEDGE AND AGREE THAT TIME IS OF THE ESSENCE UNDER THIS SDAA AND THAT YOUR RIGHTS UNDER THIS SDAA ARE SUBJECT TO TERMINATION (WITHOUT ANY CURE OPPORTUNITY) IF YOU DO NOT FULLY COMPLY STRICTLY WITH THE DEVELOPMENT OBLIGATIONS PROVIDED IN THE DEVELOPMENT SCHEDULE. WE MAY ENFORCE THIS SDAA STRICTLY.
- 2.05 Failure to Fulfill Development Obligations.
If you fail to adhere to the Development Schedule in Section 2.04 and Exhibit B by either: (1) failing to meet the requirements for the incremental number of Potbelly Shops to be developed (and opened under franchise agreements) during the development period, (2) failing to meet the lease control dates or number of new leases under control, or (3) failing to meet the requirements for the cumulative number of Potbelly Shops developed (and operating under franchise agreements) by the end of the development period, then this will constitute a material breach of this SDAA, which, unless you cure it as provided in Section 8.02 of this SDAA, will result in this SDAA being terminated immediately.
Termination of this SDAA for this reason will not be a termination (constructive or otherwise) of any franchise agreement(s) entered into by you and us under which you have already commenced the operation of the franchised Potbelly Shops covered by the franchise agreement(s) if you have fully performed and
otherwise been in compliance with all of your obligations under the franchise agreement(s) in question. You will lose both the right to develop the undeveloped Potbelly Shops in the Development Area and the Development Fee attributable to the undeveloped Potbelly Shops, and we may operate or franchise Potbelly Shops within the undeveloped balance of the Development Area without in any way being in violation of this SDAA. This remedy of ours will be in addition to whatever other remedies we may have at law or in equity.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, as a developer, you acknowledge and agree that time is of the essence under the SDAA (Shop Development Agreement). This means you must strictly and fully comply with the development obligations outlined in the Development Schedule. Failure to meet these obligations can result in the termination of the SDAA without any opportunity to cure the breach. Potbelly Sandwich Works retains the right to strictly enforce the SDAA.
Specifically, the development obligations include meeting the requirements for the incremental number of Potbelly Shops to be developed and opened under franchise agreements during the development period, meeting lease control dates or the number of new leases under control, and meeting the requirements for the cumulative number of Potbelly Shops developed and operating under franchise agreements by the end of the development period. Failure to adhere to the Development Schedule constitutes a material breach of the SDAA.
If the SDAA is terminated due to failure to fulfill development obligations, you will lose the right to develop undeveloped Potbelly Shops in the Development Area and forfeit the Development Fee attributable to those undeveloped shops. Potbelly Sandwich Works then has the right to operate or franchise Potbelly Shops within the undeveloped balance of the Development Area without violating the SDAA. This remedy is in addition to any other legal or equitable remedies available to Potbelly Sandwich Works.