Can Potbelly Sandwich Works review and pre-approve non-disclosure agreements used by franchisees?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
You must take reasonable steps to prevent its improper disclosure to others and use non-disclosure agreements with those having access. We may review and pre-approve the forms of non-disclosure agreements you use and will be a third-party beneficiary of those agreements with independent enforcement rights. You must keep copies of these agreements and send them to us upon request. Our right to review and pre-approve non-disclosure agreements is solely to ensure that you adequately protect confidential information. Under no circumstances will we control the forms or terms of employment agreements you use with Shop employees or otherwise be responsible for your labor relations or employment practices.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 54–55)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, franchisees are required to implement reasonable procedures to prevent unauthorized use and disclosure of confidential information, including using non-disclosure agreements with shop personnel and others needing access to confidential information. Potbelly Sandwich Works retains the right to review and pre-approve the forms of non-disclosure agreements that franchisees use. This is to ensure that franchisees adequately protect confidential information. Potbelly Sandwich Works will also be a third-party beneficiary of these agreements, giving them independent enforcement rights.
This means that a Potbelly Sandwich Works franchisee cannot use just any non-disclosure agreement. They must submit their forms to Potbelly Sandwich Works for approval. This process allows Potbelly Sandwich Works to ensure that the agreements adequately protect their confidential information and trade secrets. Franchisees must also keep copies of these agreements and provide them to Potbelly Sandwich Works upon request.
However, Potbelly Sandwich Works's right to review and pre-approve these agreements is limited to ensuring the protection of confidential information. The document explicitly states that Potbelly Sandwich Works will not control the forms or terms of employment agreements franchisees use with shop employees, nor will they be responsible for labor relations or employment practices. This distinction is important, as it clarifies the scope of Potbelly Sandwich Works's oversight and the franchisee's autonomy in managing their employees.