What does the Potbelly Sandwich Works SDAA grant Potbelly Sandwich Works the right to do?
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 SDAA (Shop Development Area Agreement) grants Potbelly Sandwich Works broad rights regarding the brand, system, and Potbelly Shops, except within the specific Development Area granted to the franchisee. Potbelly Sandwich Works retains the right to construct, develop, and operate Potbelly Shops anywhere in the world, and on any terms they deem appropriate. They can also grant others the right to do the same. This includes the right to offer and sell products identified by their trademarks through any distribution channels, including the internet, grocery stores, food trucks, and other retail locations.
Potbelly Sandwich Works also reserves the right to develop other types of foodservice businesses under different trademarks, and to acquire businesses that offer similar products and services, even franchising or licensing those acquired businesses. These rights extend to businesses located within the franchisee's Development Area. Potbelly Sandwich Works can also be acquired by another business, even one that provides similar products and services. Essentially, Potbelly Sandwich Works retains all rights not explicitly prohibited by the SDAA.
For a prospective franchisee, this means that while you are granted certain development rights within your designated area, Potbelly Sandwich Works maintains significant control and flexibility in how they expand and operate their brand globally. This includes the ability to compete with you through alternative channels or brands, and the possibility of being acquired by a competitor. Franchisees should carefully consider these reserved rights and how they might impact their business before signing the SDAA.