What are the permitted uses of the proceeds from the Revolving Facility for Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
long-term debt | $ 4,000 | $ 19,168 |
On February 7, 2024, Potbelly Sandwich Works, LLC entered into a credit agreement (the "Credit Agreement") with Wintrust Bank, N.A., as administrative agent (the "Agent"), the other loan parties party thereto and the lenders party thereto. The Credit Agreement provides for a revolving loan facility with an aggregate commitment of $30,000,000 (the "Revolving Facility", the commitments thereunder, the "Revolving Commitments"). Concurrently with entry into the Credit Agreement, we repaid in full and terminated the obligations and commitments of the lenders under a term loan facility described in more detail below. Proceeds from the Revolving Facility will be used for general corporate and working capital purposes. The Revolving Commitments expire on February 7, 2027.
Loans under the Credit Agreement will bear interest, at our option, at either one-month term secured overnight financing rate ("SOFR") or the base rate plus, in each case, an applicable rate per annum, based upon the Consolidated Adjusted Leverage Ratio (as defined in the Credit Agreement). The applicable rate may vary between 3.75% and 2.75% with respect to borrowings which are based upon the one-month term SOFR and between 2.25% and 1.25% with respect to borrowings which are based upon the base rate. The applicable rate with respect to one-month term SOFR borrowings is 3.25% and the applicable rate with respect to base rate borrowings was 1.75% from February 7, 2024 through September 29, 2024, based upon ratios calculated in compliance certificates and 1.50% from September 30th, through December 29, 2024, based upon ratios calculated in the most recent compliance certificate for the fis
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–49)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the proceeds from the Revolving Facility, which is a credit agreement with Wintrust Bank, N.A., are designated for general corporate and working capital purposes. This Revolving Facility provides an aggregate commitment of $30,000,000. The Revolving Commitments expire on February 7, 2027.
This means that Potbelly Sandwich Works has access to these funds for day-to-day operational expenses and broader corporate needs. For a potential franchisee, this indicates that the company has a line of credit to manage its finances and support its operations.
The availability of a revolving credit facility can be a sign of financial stability, as it shows that Potbelly Sandwich Works has been approved for a significant line of credit by a financial institution. The interest rates on loans under the Credit Agreement will be based on either the one-month term secured overnight financing rate (SOFR) or the base rate plus an applicable rate per annum, based upon the Consolidated Adjusted Leverage Ratio.