If Potbelly Sandwich Works subleases the premise to a franchisee, who can the rent be paid to?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
If we agree to sublease the premise of the Shop to you, you must pay the rent under the sublease to us or the landlord of the premises (at our option) along with the related occupancy costs which include property taxes, insurance, maintenance and structural repairs. If we require you to pay rent to us, we may charge an amount that is higher than the rent due under the underlying lease. We may derive revenue from this subleasing arrangement as described in Item 6.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–34)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, if the company agrees to sublease the shop's premises to a franchisee, the franchisee is required to pay rent either to Potbelly Sandwich Works or directly to the landlord of the premises. The choice of recipient is at Potbelly Sandwich Works' discretion.
In addition to the base rent, the franchisee is also responsible for covering related occupancy costs. These costs encompass property taxes, insurance, maintenance, and structural repairs, adding to the overall financial obligations of operating the franchise.
Furthermore, Potbelly Sandwich Works has the right to charge a sublease rent amount that exceeds the rent due under the original underlying lease. This means Potbelly Sandwich Works can potentially profit from the subleasing arrangement, as further detailed in Item 6 of the FDD. This arrangement is common in franchise agreements where the franchisor controls the real estate.