When do the Revolving Commitments expire for Potbelly Sandwich Works under the Credit Agreement?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 29, 2024 | December 31, 2023 | |
|---|---|---|
| Revolving Facility | $ 4,000 | $ — |
| Term Loan | — | 22,162 |
| Unamortized debt issuance costs | — | (1,744) |
| Less: current portion of long-term debt | — | (1,250) |
| Total 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 C
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 Revolving Commitments under the Credit Agreement expire on February 7, 2027. This Credit Agreement, established on February 7, 2024, with Wintrust Bank, N.A., provides a revolving loan facility with an aggregate commitment of $30,000,000. These funds are intended for general corporate and working capital purposes.
This expiration date is significant for prospective franchisees as it indicates the timeline within which Potbelly Sandwich Works has access to this line of credit. The availability of such a credit facility can influence the company's ability to support its franchisees, invest in growth initiatives, and manage financial obligations. Franchisees should be aware of this date and consider its potential impact on the stability and future direction of the Potbelly Sandwich Works franchise system.
Furthermore, the Credit Agreement includes provisions for interest rates on loans, which are based on either the one-month term secured overnight financing rate (SOFR) or the base rate, plus an applicable rate per annum, dependent on the Consolidated Adjusted Leverage Ratio. Potbelly Sandwich Works has the option to prepay the Revolving Commitments at any time without incurring premiums or penalties, provided they give prior notice as specified in the Credit Agreement. The obligations under this agreement are guaranteed by Potbelly Corporation and its material domestic subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the company and its subsidiary guarantors.