What happens to a Potbelly Sandwich Works franchise in the event of the death or disability of the franchisee?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |
|---|---|---|---|
| No transfers allowed except to wholly-owned affiliate where conditions include entity paperwork and documentation of interests and signing joinder of liability | |||
| n. | Franchisor's right of first refusal to acquire franchisee's business | 12.G. of Franchise Agreement; not applicable to SDAA | We may match any offer for Shop or ownership interest in you or entity that controls you |
| o. | Franchisor's option to purchase franchisee's business | 15.E. of Franchise Agreement; not applicable to SDAA | We may buy Shop's assets at fair market value, and/or receive assignment or sublease of Shop's site, after Franchise Agreement is terminated or expires (without renewal) |
| p. | Death or disability of franchisee | 12.E. of Franchise Agreement; not applicable to SDAA | Assignment of Managing Owner's interest in you to approved party within 9 months after death or disability; we may manage Shop if qualified management not in place |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 58–65)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, specifically Item 17, in the event of the death or disability of the franchisee, the managing owner's interest in the franchise can be assigned to an approved party. This assignment must occur within nine months of the death or disability.
If qualified management is not in place at the Potbelly Sandwich Works location, the franchisor has the right to manage the shop. This ensures that the business continues to operate according to Potbelly Sandwich Works's standards, even in the absence of the original franchisee.
This provision protects Potbelly Sandwich Works by ensuring business continuity and adherence to brand standards, while also providing a framework for the franchisee's estate or designee to manage or transfer the business interest. It is important for prospective franchisees to understand these conditions and discuss with Potbelly Sandwich Works the criteria for an "approved party" to ensure a smooth transition in unforeseen circumstances.