What is the significance of Exhibit A in the Potbelly Sandwich Works SDAA?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
you sign the franchise agreement for the Potbelly Shop.
2.03 Development Rights. During the Term, and provided you and your Affiliates are in compliance with this SDAA and all other agreements with us or any of our Affiliates (including franchise agreements signed pursuant to this SDAA), then we will:
(a) grant to you, in accordance with Section 3, at least that cumulative number of franchises for Potbelly Shops set forth in Exhibit B, all of which are to be located within the geographical area described in Exhibit A (the "Development Area" or "Area"); and
(b) neither operate (directly or through an Affiliate), nor grant any third party the right to operate, any Potbelly Shop located within the Development Area, except for:
(1) Potbelly Shops you will develop pursuant to this SDAA for which you or your Affiliate will sign future franchise agreements for each such location;
(2) Potbelly Shops already open (or under commitment to open) as of the Effective Date;
(3) Potbelly Shops or other restaurants using any part or all of the Branded System and/or Marks at "Non-Traditional Venues" within the Development Area, such as hospitals or medical centers, airports, public or private schools, universities or college campuses, airport terminals, train or bus stations, convention centers, exhibition halls, amusement parks, fairgrounds, sports arenas, military bases, state or national parks, hotels, lodges, country clubs, social clubs, resorts, casinos, theaters, food trucks, or any other similar site or venue that generates customer flow that is independent from the general customer traffic flow of the surrounding area (collectively, "Non-Traditional Venues");
(4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless of whether such restaurants are converted to operate using any of the Marks and/or any or all of the Branded System or whether such restaurants operate under other trademarks, service marks or trade dress and/or use other operating systems; or
(5) restaurants operated, licensed, or franchised by another business in the Development Area that may acquire us or our Affiliates (whether through acquisition of assets, ownership interests, or otherwise, regardless of the form of transaction) and may provide products and services similar to those provided by Potbelly Shops, including the operation, licensing, or franchising of Competitive Businesses, in the Development Area.
2.04 Development Obligations.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, Exhibit A within the Shop Development Area Agreement (SDAA) outlines the geographical area granted to the developer. The document states that the franchisor will grant the franchisee the right to develop Potbelly Shops within the geographical area described in Exhibit A, also referred to as the "Development Area" or "Area".
This exhibit is important because it defines the specific territory where the developer has the right to open Potbelly Sandwich Works locations. Potbelly Sandwich Works also agrees not to operate or allow third parties to operate any Potbelly Shop within the Development Area, with some exceptions. These exceptions include Potbelly Shops the franchisee will develop, shops already open, shops in "Non-Traditional Venues" like airports or schools, and restaurants acquired from other franchise systems.
Exhibit A also specifies the term of the SDAA, indicating when the agreement starts and expires. The agreement specifies that the franchisee has no right to renew or extend their rights under the SDAA. Therefore, Exhibit A plays a crucial role in defining the scope and duration of the development rights granted to the franchisee, which is essential for planning and investment decisions.