Can a party assign the Potbelly Sandwich Works agreement without written consent?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12.04 Assignment. This Agreement, and all of the provisions hereof, shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. No Party may assign this Agreement or any of its rights hereunder or delegate any of its obligations hereunder without the prior written consent of the other Parties; provided that Seller may, without the consent of Purchaser or any Guarantor, assign this Agreement or any of its rights hereunder, or delegate any of its obligations hereunder, to any of its Affiliates (provided that Seller remains principally liable for its obligations hereunder) or to any successor in interest (whether by purchase, merger, consolidation, conversion or otherwise) to all or
substantially all of the business operations and/or assets of Seller. Any attempt or purported assignment or delegation in contravention of the foregoing shall be deemed void ab initio.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, a franchisee cannot assign the franchise agreement without prior written consent from the other parties involved. This requirement ensures that Potbelly Sandwich Works maintains control over who operates its franchises and can assess the suitability of any potential new franchisee.
However, Potbelly Sandwich Works, as the seller, has more flexibility. Potbelly Sandwich Works can assign the agreement or its rights and obligations without the franchisee's consent under specific circumstances. These circumstances include assignment to an affiliate, provided Potbelly Sandwich Works remains liable for its obligations, or to a successor in interest resulting from a purchase, merger, consolidation, or conversion of substantially all of Potbelly Sandwich Works's business operations or assets.
Any attempt to assign or delegate the agreement in violation of these terms is considered void from the beginning, meaning it has no legal effect. This provision protects Potbelly Sandwich Works's interests by preventing unauthorized transfers of the franchise to parties they have not approved. For a potential franchisee, this highlights the importance of understanding the conditions under which the agreement can or cannot be assigned, as it affects their ability to transfer the franchise in the future.