To what extent are transfer fees collectable by Potbelly Sandwich Works in Washington?

According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, transfer fees in Washington state are collectable only to the extent that they reflect the company's reasonable estimated or actual costs in completing the transfer. This means Potbelly Sandwich Works cannot charge an arbitrary or inflated transfer fee; the fee must be directly tied to the expenses they incur during the transfer process.

This provision protects franchisees in Washington from excessive transfer fees that could be used to generate profit for Potbelly Sandwich Works rather than covering legitimate transfer-related expenses. It ensures that the fees are fair and reasonable, reflecting the actual work and costs involved in the transfer.

For a prospective franchisee, this is a beneficial protection under Washington state law. It is important to understand what constitutes "reasonable estimated or actual costs" and to request a detailed breakdown of the transfer fee to ensure it complies with this requirement. Franchisees should be prepared to question any charges that seem excessive or not directly related to the transfer process.

Furthermore, the FDD stipulates that Washington's Franchise Investment Protection Act and related rules may modify the franchise agreement. Franchisees should be aware of their rights under Washington law, as these rights can supersede the standard terms of the franchise agreement, particularly concerning termination and renewal.