Can Potbelly Sandwich Works suspend a franchisee's right to participate in advertising programs?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
tion.
C. OUR ALTERNATE REMEDIES UPON YOUR DEFAULT.
In addition to, and without limiting, our other rights and remedies under this Agreement, any other agreement or applicable law, upon the occurrence of any event giving rise to our right to terminate this Agreement under the preceding Subsection B, we may instead elect, at our sole option and upon delivering you written notice, to take any or all of the following actions without terminating this Agreement:
- (1) temporarily remove information concerning the Shop from any website or extranet operated for the network Potbelly Shops, and/or restrict your or the Shop's participation in other programs o
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, Potbelly Sandwich Works has the option to suspend a franchisee's participation in advertising, marketing, promotional, or public relations programs under specific circumstances.
Specifically, if an event occurs that would give Potbelly Sandwich Works the right to terminate the franchise agreement, they can choose, instead of terminating the agreement, to take actions such as suspending the franchisee's right to participate in advertising programs. This suspension applies to programs that Potbelly Sandwich Works or the Brand Fund provides, authorizes, or administers.
This clause in the franchise agreement provides Potbelly Sandwich Works with a range of options beyond termination when a franchisee is in default. It allows them to take corrective actions while still allowing the franchisee to continue operating, albeit with certain restrictions. For a prospective franchisee, this means that non-compliance with the franchise agreement could lead to a suspension of advertising and marketing support, which could significantly impact the shop's performance and visibility. It is important to understand what constitutes an event of default and what steps a franchisee can take to remedy such a situation.