Does Potbelly Sandwich Works have the right to modify System Standards periodically?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that operating and maintaining the Shop in compliance with System Standards are essential to preserve the goodwill of the Marks and all Potbelly Shops. Therefore, you agree to operate and maintain the Shop at all times in compliance with all System Standards, as we periodically issue, modify, and supplement them, even if you believe that a System Standard, as originally issued or subsequently modified, is not in the Franchise System's or the Shop's best interests. Although we retain the right to establish and periodically modify System Standards, you retain the right to control, and responsibility for, the Shop's management and operation and implementing and maintaining System Standards at the Shop.
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, Potbelly Sandwich Works retains the right to periodically issue, modify, and supplement System Standards. These standards are essential for preserving the goodwill of the Marks and all Potbelly Shops. Franchisees are obligated to comply with all System Standards, even if they believe a standard is not in the best interest of the franchise system or the shop. However, franchisees retain control and responsibility for the shop's management, operation, and implementation of these standards.
The System Standards, as communicated in the Operations Manual, are considered part of the Franchise Agreement and may regulate various aspects of the business. If a franchisee deviates from any System Standard, Potbelly Sandwich Works may charge a Non-Compliance Fee of $250 for each violation, without providing an opportunity to cure the violation. This fee is intended to compensate Potbelly Sandwich Works for administrative and management costs associated with addressing the violation.
Potbelly Sandwich Works may modify System Standards to accommodate regional or local variations, which could require franchisees to invest additional capital in the shop or incur higher operating costs. Franchisees must implement these changes within a reasonable time frame, which may involve refurbishing or remodeling the shop, buying new operating assets, or adding new products and services. However, there are limitations on how frequently Potbelly Sandwich Works can mandate capital modifications related to the shop's flooring, wall treatments, lighting fixtures, and other structural elements, generally limited to no more than once every seven years, with some exceptions.