If litigation is necessary with Potbelly Sandwich Works, what is the choice of forum?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY |
|---|---|---|
| of 5 miles of any Potbelly Shop (whether franchised or affiliate or company-owned), whether in operation or under construction on the effective date of termination or expiration; or (c) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business | ||
| s. Modification of the agreement | 17.J. of Franchise Agreement; 10.14 of SDAA | No modifications generally except by written agreement signed by both parties, but we may change Operations Manual and System Standards |
| t. Integration/merger clause | 17.N. of Franchise Agreement; 10.14 of SDAA | Only the Franchise Agreement’s and SDAA’s terms are binding (subject to state law). Any representations or promises outside of the disclosure document and Franchise Agreement may not be enforceable |
| u. Dispute resolution by arbitration or mediation | 17.F. of Franchise Agreement; 10.06 and of SDAA | We and you generally must arbitrate all disputes at location near our principal business address at the time the arbitration demand is filed (it currently is in Chicago, Illinois) |
| v. Choice of forum | 17.H. of Franchise Agreement; 10.07 of SDAA | Subject to arbitration obligation, litigation generally must be in courts located closest to where we have our principal business address at the time the action is commenced (it currently is in Chicago, Illinois) (subject to applicable state law) |
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, any litigation will generally occur in courts located closest to where Potbelly Sandwich Works has its principal business address at the time the action is commenced, which is currently in Chicago, Illinois. This is subject to both the arbitration obligation and applicable state law.
This means that if a franchisee has a dispute with Potbelly Sandwich Works that cannot be resolved through arbitration, the franchisee will likely need to pursue legal action in Chicago, Illinois, regardless of where their Potbelly Sandwich Works franchise is located. This could involve additional travel expenses and the need to hire legal counsel familiar with Illinois law.
It is important for a prospective Potbelly Sandwich Works franchisee to consider this forum selection clause carefully, as it could add significant cost and inconvenience to any legal dispute with the franchisor. Franchisees should consult with an attorney to understand the implications of this clause and how it may affect their rights.