What is the significance of Exhibit G-2 for a Potbelly Sandwich Works franchisee?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT G-2
GUARANTEE OF PERFORMANCE
GUARANTY OF PERFORMANCE
For value received, Potbelly Corporation, located at 500 West Madison Street, Suite 1000, Chicago, IL 60661 (the "Guarantor"), absolutely and unconditionally guarantees to assume the duties of Potbelly Franchising, LLC, located at 500 West Madison Street, Suite 1000, Chicago, IL 60661 (the "Franchisor") under its franchise registration in each state where its franchise is registered or exempt from registration, as applicable, and under its Franchise Agreement as identified in its 2025 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered into with franchisees and amended, modified or extended, from time to time. This guaranty continues until all such obligations of the Franchisor under the franchise registration or franchise exemption (as applicable) and Franchise Agreement are satisfied or until liability of the Franchisor under the Franchise Agreement has been completely discharged, whichever first occurs. Guarantor is not discharged from liability if a claim by the franchisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and on its successors and assigns.
The Guarantor signs this guarantee at Chicago, Illinois on the 30th day of April, 2025.
Guarantor:
POTBELLY CORPORATION
By:
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 78)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, Exhibit G-2 is a Guarantee of Performance provided by Potbelly Corporation. This guarantee is significant for a prospective franchisee because Potbelly Corporation, the parent company, absolutely and unconditionally guarantees that it will assume the duties of Potbelly Franchising, LLC (the franchisor) under the franchise registration in each state and under the Franchise Agreement. This guarantee remains in effect until all obligations of the Franchisor are satisfied or the liability of the Franchisor under the Franchise Agreement has been completely discharged.
In practical terms, this means that if Potbelly Franchising, LLC, for any reason, cannot fulfill its obligations to the franchisee as outlined in the Franchise Agreement, Potbelly Corporation steps in to ensure those obligations are met. This provides an additional layer of security for the franchisee, as the financial stability and resources of Potbelly Corporation back the commitments made by the franchising entity. The guarantee extends to any amendments, modifications, or extensions of the Franchise Agreement.
However, the Guarantor (Potbelly Corporation) does not waive receipt of notice of default on the part of the Franchisor (Potbelly Franchising, LLC). This suggests that while Potbelly Corporation guarantees the performance, they still require notification if Potbelly Franchising, LLC fails to meet its obligations. This guarantee is binding on Potbelly Corporation and its successors and assigns, ensuring long-term security for the franchisee. The document is signed by a representative of Potbelly Corporation, specifically the Senior Vice President, Chief Legal Officer, Chief Compliance Officer, and General Counsel, on April 30, 2025, in Chicago, Illinois.