What is the 'Principal's Agreement' for a Potbelly Sandwich Works franchise, and who may be required to sign it?

According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the Principal's Agreement is a document that certain individuals associated with a franchise may be required to sign. Specifically, Potbelly Sandwich Works may require the Operator, directors, and officers of a corporate, limited liability company, or partnership franchisee to agree to comply with certain non-monetary obligations outlined in the Franchise Agreement by signing this agreement, which is included as Exhibit D to the Franchise Agreement.

In cases where the franchisee is a legal entity (corporation, LLC, or partnership), Potbelly Sandwich Works requires a designated Managing Owner to oversee the shop's operations. If the Managing Owner is not involved in the day-to-day operations, an Operator must be appointed to manage the shop on-site. This Operator must be approved by Potbelly Sandwich Works and is required to sign the Principal's Agreement.

The Principal's Agreement ensures that key individuals within the franchise operation are bound by the non-monetary obligations of the Franchise Agreement. This is a mechanism for Potbelly Sandwich Works to maintain brand standards and operational consistency across all franchise locations, even when the franchisee is a corporate entity with multiple stakeholders. Prospective franchisees should carefully review Exhibit D of the Franchise Agreement to understand the specific obligations outlined in the Principal's Agreement and discuss any concerns with Potbelly Sandwich Works before signing.