Are Potbelly Sandwich Works' rights under the SDAA exclusive or cumulative?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
2.06 Reservation of Rights. Except as expressly provided in this SDAA with respect to the Development Area, we and all of our Affiliates (and our respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the Branded System and Potbelly Shops anywhere in the world, and the right to engage in any business whatsoever, including the right to: (a) construct, develop and operate, and grant others the right to construct, develop and operate, Potbelly Shops anywhere we want and on any terms and conditions we deem appropriate; (b) offer and sell products and other items identified by the Marks or any other trademarks or service marks to any customers, wherever located or operating, and through any distribution channels (including, but not limited to, the Internet, grocery, specialty, and other retail stores, food trucks, and other points of distribution), wherever located or operating; (c) construct, develop, and operate, and grant to others the right to construct, develop, and operate, any types of stores or other foodservice businesses under any trademarks or service marks anywhere we want and on any terms and conditions we deem appropriate; (d) acquire the assets or ownership interests of one or more businesses providing products and services the same as or similar to those provided at Potbelly Shops, and franchising, licensing or creating similar arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating; (e) the right to acquire the assets or ownership interests of one or more businesses providing products and services the same as or similar to those provided at Potbelly Shops, and franchising, licensing or creating similar arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including in the Development Area); (f) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at Potbelly Shops, or by another business; and, (g) engage in all other activities this SDAA does not expressly prohibit.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the rights granted to the franchisee under the SDAA (Site Development Area Agreement) are subject to specific limitations and are not entirely exclusive. While Potbelly Sandwich Works agrees not to operate or grant others the right to operate a Potbelly Sandwich Works shop within the Development Area during the term of the SDAA, there are several exceptions.
Specifically, Potbelly Sandwich Works retains the right to operate or franchise Potbelly Sandwich Works shops in Non-Traditional Venues such as hospitals, airports, schools, and other similar locations within the Development Area. They can also operate restaurants that they purchase from another franchise system, regardless of whether these restaurants are converted to Potbelly Sandwich Works shops or operate under different trademarks.
Furthermore, Potbelly Sandwich Works reserves all rights and discretion with respect to the Marks, the Branded System, and Potbelly Sandwich Works shops worldwide, including the right to construct, develop, and operate Potbelly Sandwich Works shops anywhere they want, offer products through any distribution channels, and even acquire businesses that offer similar products and services, including within the Development Area. These rights are cumulative, meaning Potbelly Sandwich Works retains all rights not expressly prohibited by the SDAA, allowing them to engage in various business activities and expansion strategies even within a franchisee's Development Area.