What minimum requirements might Potbelly Sandwich Works impose through its standards and specifications?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
To maintain the quality of the Products that Potbelly Shops sell and our system's reputation, we may condition your right to buy or lease Operating Assets, inventory and other items, and services (besides those described above that you may obtain only from us, our affiliates and/or other specified exclusive sources) on their meeting our minimum standards and specifications and/or being acquired from suppliers we approve. We will issue and modify standards and specifications based on our, our affiliates', and our franchisees' experience in operating Potbelly Shops. Standards and specifications may impose minimum requirements for production, performance, reputation, prices, quality, design, and appearance. Our Operations Manual or other communications will identify our standards and specifications for you and (where appropriate) suppliers or only for suppliers (in the latter case where, for example, we give our standards and/or specifications to a supplier under a confidentiality agreement). There might be situations where you can obtain items from any supplier who can satisfy our requirements and, therefore, would be an approved supplier.
System Standards may cover terms and conditions of the sale and delivery of, and terms and methods of payment for, Potbelly Trade Secret Products, Potbelly Branded Products, and other items and services you obtain from us and affiliated and unaffiliated suppliers. This includes our and our affiliates' right to establish an electronic product ordering system and require your payment electronically before we prepare for shipment and send you Potbelly Trade Secret Products, Potbelly Branded Products, and other items you order. We and our affiliates have the right not to sell you any Potbelly Trade Secret Products, Potbelly Branded Products, or other items and not to provide you with services, or to do so only on a "cash-on-delivery" or other basis, if you are in default (but have not cured the default when required after written notice). You may not use any unapproved products as replacements.
Approved Suppliers
In the case of Potbelly Trade Secret Products and Potbelly Branded Products, suppliers will be limited to us, our affiliates and/or other specified exclusive sources, meaning that you must buy
those items during the franchise term only from us, our affiliates and/or the other specified exclusive sources at the prices we or they decide to charge. We restrict these items' sources to protect trade secrets and other intellectual property rights, assure quality, assure a reliable supply of products meeting our standards, achieve better terms of purchase and delivery service, control usage of the Marks by third parties, and monitor the manufacture, packaging, processing, and sale of these items.
In the case of Operating Assets, services, and items other than Potbelly Trade Secret Products and Potbelly Branded Products, suppliers may at our option be limited to us, our affiliates and/or other specified exclusive sources, in which case you must (at our direction) buy those Operating Assets, other items, and services (including gift, loyalty, rewards, and affinity card processing services, quality assurance services, music network services, "mystery" and "secret" shopper services, and consumer satisfaction survey processes) during the franchise term only from us, our affiliates and/or the other specified exclusive sources at the prices we or they decide to charge. We have the absolute right to limit the suppliers with whom you may deal.
You currently must buy certain meats, cheeses, bread, produce, ready-to-bake items, soups, sauces, canned/jarred items, condiments, dry foods, beverages, and packaging from unaffiliated designated sources.
You also currently must use our designated, unaffiliated vendors of gift, loyalty, rewards, and affinity card processing services, mobile app services, quality assurance services, and music network services and, during the Shop's first year of operation, a designated, unaffiliated accounting service to ensure your compliant preparation of required reports and financial statements.
We will identify all designated and approved suppliers in the Operations Manual or other written or electronic communications.
Purchases from Us
PSW, LLC currently is the only supplier of certain interior menu boards and signage, interior custom lighting, artifacts and décor, and tabletops and bases.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–34)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the company may set minimum standards and specifications regarding various aspects of the franchise operations. These standards can cover a wide range of factors, including production, performance, reputation, prices, quality, design, and appearance of the products sold at Potbelly Shops. The Operations Manual or other communications will detail these standards and specifications for franchisees and suppliers.
Potbelly Sandwich Works's system standards may also regulate the types, models, and brands of fixtures, furniture, furnishings, signs, vehicles (if delivery and catering services are offered), and equipment, including computer and point-of-sale systems. These standards extend to Potbelly Trade Secret Products, Potbelly Branded Products, other food and beverage products and supplies, and designated and approved suppliers. Franchisees must operate their shops according to these System Standards.
Furthermore, if a franchisee wishes to use a product, ingredient, supply, or service that Potbelly Sandwich Works has not yet approved, the franchisee must notify Potbelly Sandwich Works and provide samples and other information for evaluation. Potbelly Sandwich Works may charge a testing or inspection fee and will make a decision within 6 months. Approval of suppliers might depend on factors such as product safety, quality, sanitation processes, delivery reliability, service standards, financial capability, customer relations, and a supplier's willingness to provide benefits to the Potbelly Sandwich Works system.