When must the remaining balance of the Initial Franchise Fee be paid to Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
opment Fee in whole or in part, under any circumstance.
The Development Fee will be applied against the initial franchise fee that will be payable under the franchise agreements for each of your Potbelly Shops (each, an "Initial Franchise Fee"). Each Initial Franchise Fee will be reduced by the amount of the Development Fee you paid for that Potbelly Shop, that is, by $40,000 for your first Potbelly Shop and by $20,000 for your second and subsequent Potbelly Shops. The Initial Franchise Fee against which the Development Fee will be credited will be our then-current Initial Franchise Fee for each Potbelly Shop opened under this SDAA. You will pay the remaining balance (if any) of the Initial Franchise Fee for each Potbelly Shop to be opened pursuant to this SDAA on the date
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, if a prospective franchisee signs a Development Agreement, they must pay the remaining balance (if any) of the Initial Franchise Fee for each Potbelly Shop on the date they sign the franchise agreement for that Potbelly Shop. This remaining balance is after the deduction of the Development Fee already paid. The Development Fee is $40,000 for the first shop and $20,000 for each subsequent shop.
This means that the franchisee needs to have the balance of the initial franchise fee available when they are ready to finalize the franchise agreement for each location. This is a crucial step in securing the rights to operate a Potbelly Sandwich Works franchise. The franchise agreement must be executed by the franchisee and their Owners and returned to Potbelly Sandwich Works not earlier than 7 days and not later than 21 days after Potbelly Sandwich Works delivers it, with payment of the initial fees required.
Potbelly Sandwich Works may revoke the offer to grant a franchise if they do not receive the fully executed franchise agreement and payment of the required initial franchise fee within the specified timeframe. This underscores the importance of being prepared to pay the remaining balance of the initial franchise fee when signing the franchise agreement to avoid potential setbacks in the process of opening a Potbelly Sandwich Works location.