What is guaranteed to Potbelly Sandwich Works under the Guaranty and Assumption of Obligations?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| of , 20, by |
|---|
| In consideration of, and as an inducement to, the execution of that certain Franchise |
| Agreement (the "Agreement") on this date by POTBELLY FRANCHISING, LLC ("us," "we," |
| or "our"), each of the undersigned personally and unconditionally (a) guarantees to us and our |
| successors and assigns, for the term of the Agreement (including extensions) and afterward as |
| provided in the Agreement, that |
| ("Franchisee") |
| will |
| punctually pay and perform each and every undertaking, agreement, and covenant set forth in the |
| Agreement (including any amendments or modifications of the Agreement) and (b) agrees to be |
| personally bound by, and personally liable for the breach of, each and every provision in the |
| Agreement (including any amendments or modifications of the Agreement), including |
| (i) monetary obligations, (ii) obligations to take or refrain from taking specific actions and to |
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations ensures that each owner of a Potbelly Sandwich Works franchise personally guarantees the franchisee's obligations to Potbelly Sandwich Works.
Specifically, each owner must sign a Guaranty and Assumption of Obligations, which legally binds them to all provisions of the Franchise Agreement and any related ancillary agreements. This means the owners are jointly and individually responsible for the franchisee's adherence to the agreement's terms.
This guarantee covers two primary aspects: first, the owner ensures that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement, including any amendments or modifications. Second, the owner agrees to be personally bound by and liable for any breach of the agreement's provisions. This includes monetary obligations and requirements to take or avoid specific actions.
In essence, Potbelly Sandwich Works seeks to ensure that the financial and operational responsibilities of the franchise are fully met by requiring the owners to personally guarantee the franchisee's performance. This reduces the risk to Potbelly Sandwich Works and ensures commitment from the franchisee's ownership.