Which sections of the Potbelly Sandwich Works Franchise Agreement are amended by the Rider?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
NCHISING, LLC FRANCHISE AGREEMENT FOR USE IN NORTH DAKOTA
| This Rider (the "Rider") is made and entered into as of the day of, 20 (the "Effective Date") (regardless of the dates of the parties' signatures) by and between POTBELLY FRANCHISING, LLC, an Illinois limited liability company with its principal business address at 500 West Madison Street, Suite 1000, Chicago, Illinois 60661 ("we," "us," or "our"), and , whose principal business address is ("you" or "your"). |
|---|
| 1. |
| Background. We and you are parties to that certain Franchise Agreement dated |
| , 20 that has been signed at the same time as this Rider (the "Franchise |
| Agreement"). This Rider is annexed to and forms part of the Franchise Agreement. This Rider is being |
| signed because (a) you are a resident of North Dakota and the Potbelly Shop that you will operate under |
| the Franchise Agreement will be located in North Dakota, and/or (b) any of the franchise offering or sales |
| activity occurred in North Dakota. |
| 2. |
| Releases. Sections 12.A., 12.C.(8), 13.C., and 15.E. of the Franchise Agreement are |
| amended by adding the following: |
| ; provided, however, that such general release shall not apply to the extent prohibited by |
| law with respect to claims arising under the North Dakota Franchise Investment Law. |
| 3. |
| Payment of Amounts Owed to Us. Section 15.A. of the Franchise Agreement is amended |
| by adding the following language: |
| We and you acknowledge that certain parts of this provision might not be enforceable under |
| the North Dakota Franchise Investment Law; however, we and you agree to enforce the |
| provision to the extent the law allows. |
| 4. |
| Noncompetition. Section 15.D. of the Franchise Agreement is amended by adding the |
| following language: |
Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota. However, you acknowledge and agree that we intend to seek enforcement of these provisions to the extent enforceable under the law.
- Arbitration. The following language is added to the end of Section 17.F. of the Franchise Agreement:
However, to the extent required by the North Dakota Franchise Investment Law (unless such a requirement is preempted by the Federal Arbitration Act), arbitration proceedings will be held at a site to which we and you agree.
- Governing Law. The following language is added to the end of Section 17.G. of the Franchise Agreement:
NOTWITHSTANDING THE FOREGOING, TO THE EXTENT REQUIRED BY THE NORTH DAKOTA FRANCHISE INVESTMENT LAW, NORTH DAKOTA LAW WILL APPLY TO THIS AGREEMENT.
- Consent to Jurisdiction. The following language is added to the end of Section 17.H. of the Franchise Agreement:
HOWEVER, TO THE EXTENT REQUIRED BY APPLICABLE LAW, YOU MAY BRING AN ACTION IN NORTH DAKOTA.
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- Waiver of Jury Trial. If and then only to the extent required by the North Dakota Franchise Investment Law, the second paragraph of Section 17.I. of the Franchise Agreement is deleted.
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- Limitation of Claims. Section 17.K. of the Franchise Agreement is amended by adding the following language:
The time limitations set forth in this Subsection might be modified by the North Dakota Franchise Investment Law.
- No Waiver of Disclaimer of Reliance. The following provision is added to the Franchise Agreement:
No statement, questionnaire or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or any other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
IN WITNESS WHEREOF, the parties have signed and delivered this Rider on the dates noted below, to be effective as of the Effective Date.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to the 2025 Potbelly Sandwich Works Franchise Disclosure Document, the Rider amends specific sections of the Franchise Agreement. For franchisees in North Dakota, Sections 12.A., 12.C.(8), 13.C., and 15.E. are amended to specify that the general release within these sections does not apply to claims prohibited by the North Dakota Franchise Investment Law. Additionally, Section 15.A. is amended to acknowledge that certain parts of the provision may not be enforceable under the North Dakota Franchise Investment Law, but both parties agree to enforce it to the extent the law allows. Section 15.D., concerning noncompetition, is also amended with additional language.
For franchisees subject to state franchise disclosure laws in California, Hawaii, Indiana, Michigan, Rhode Island, South Dakota, Virginia, and Wisconsin, the Rider specifies that no statement, questionnaire, or acknowledgment can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Potbelly Sandwich Works or its representatives. This provision takes precedence over any conflicting terms in other documents related to the franchise agreement.
These amendments and stipulations ensure that franchisees' rights are protected under specific state laws, particularly concerning releases, payment obligations, and non-reliance on franchisor statements. Prospective franchisees should carefully review these Riders and understand how they modify the standard Franchise Agreement in their specific state to ensure compliance and protect their legal rights.