When is the Management Fee due for a Potbelly Sandwich Works franchise, and how is it calculated?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Type of fee1 | Amount | Due Date | Remarks |
| Audit | Cost of inspection or audit (amount of which depends on circumstances and extent of your non compliance) | 15 days after billing | Due if you do not give us reports, supporting records, or other required information or understate required Royalties or other amounts by more than 2%. |
| Late Fee | $100 | May be auto debited from your account | Due for each late or dishonored payment. |
| Interest | Lesser of 1.5% per month or highest commercial contract interest rate law allows | May be auto debited from your account | Due on all overdue amounts more than 7 days late. |
| Non-Approved Shop Opening | $5,000 for each day your Shop operates without our approval | May be auto debited from your account | Due if you begin operating Shop before we give our approval. |
| Management Fee | Manager's then-current daily salary plus direct expenses | As incurred | Due when we (or a third party) manage Shop after Managing Owner's death or disability or after your default or abandonment. |
| Costs and Attorneys' Fees | Will vary under circumstances and depend on nature of your non-compliance | As incurred | Due when we incur costs and expenses to enforce Franchise Agreement against you, whether or not we begin formal legal proceeding. |
| Indemnification | Will vary under circumstances and depend on nature of third party claim | As incurred | You must reimburse us if we are held liable for claims from your Shop's operation or incur costs to defend them (when we are not at fault). |
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, a Management Fee may become applicable under specific circumstances. This fee is incurred 'as incurred,' meaning it becomes due when the specific situation requiring management arises.
The Management Fee is calculated based on the manager's then-current daily salary, in addition to any direct expenses incurred. This fee is charged when Potbelly Sandwich Works, or a third party designated by them, steps in to manage the shop.
This situation typically occurs after the Managing Owner's death or disability, or in the event of the franchisee's default or abandonment of the Potbelly Sandwich Works shop. It's important for prospective franchisees to understand the conditions under which this fee can be imposed, as it can significantly impact their operating costs if they are unable to manage the shop themselves.