Does the transfer of a Potbelly Sandwich Works franchise include any intellectual property?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
We have developed a franchise opportunity for Potbelly Shops that sell the Products, use the Marks, and use our and our Affiliates' Branded System, all of which we and our Affiliates may improve, further develop, and otherwise periodically modify.
You understand the terms of this SDAA and accept them as being reasonably necessary to maintain the uniformity of our high-quality standards at all Potbelly Shops to protect and preserve the goodwill of the Marks and the integrity of the Branded System.
"Confidential Information" – Our proprietary and confidential information relating to the development and operation of Potbelly Shops, including: (1) site selection criteria and layouts, designs and other plans and specifications for Potbelly Shops; (2) ingredients, recipes and related information concerning any food items we authorize; (3) training and operations materials and manuals; (4) methods, formats, specifications, standards, systems, procedures, food preparation techniques, sales and marketing techniques, knowledge, and experience used in developing and operating Potbelly Shops; (5) marketing, promotional and advertising research and programs for Potbelly Shops; (6) identity of suppliers, and knowledge of specifications and pricing for authorized food products, materials, supplies and equipment, we authorize; (7) any computer software or similar technology which is proprietary to us or the Branded System, including, without limitation, digital passwords and identifications and any source code of, and data, reports, and other printed materials generated by, the software or similar technology; (8) knowledge of operating results and financial performance of Potbelly Shops, other than Potbelly Shops you own; (9) graphic designs and related intellectual property; (10) customer solicitation, communication and retention programs, along with data and information used or generated in connection with those programs; (11) all data and other information generated by, or used in, the operation of your Potbelly Shops, including customer names, addresses, phone numbers, pricing and other information supplied by any customer (such as credit card information or personal information), and any other information contained at any time and from time to time in the computer hardware and/or operating software (including point-of-sale equipment and software) we specify for use at your Potbelly Shops or that visitors to your Potbelly Shops (including you and your personnel) provide to the Website (defined below) for the network of Potbelly Shops; (12) future business plans relating to Potbelly Shops and the Potbelly Sandwich Shop® franchise opportunity, including expansion and development plans; and (13) any other information that we reasonably designate as confidential or proprietary.
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to the 2025 Potbelly Sandwich Works Franchise Disclosure Document, the franchise opportunity involves using the company's intellectual property. Specifically, franchisees will use Potbelly Sandwich Works's "Marks" and "Branded System." This system is subject to ongoing improvements and modifications by Potbelly Sandwich Works and its affiliates.
Furthermore, the Franchise Disclosure Document and related agreements emphasize the importance of protecting the goodwill associated with the Potbelly Sandwich Works brand and the integrity of its Branded System. Franchisees acknowledge that the terms of the agreements are reasonably necessary to maintain the high-quality standards across all Potbelly Sandwich Works locations. This suggests that the use of Potbelly Sandwich Works's intellectual property is a core component of the franchise operation, and franchisees are expected to adhere to the standards and guidelines set by the company.
Additionally, the definition of "Confidential Information" includes graphic designs and related intellectual property, indicating that these assets are considered proprietary and essential to the Potbelly Sandwich Works system. The franchise agreement likely contains provisions that address the use, protection, and transfer of these intellectual property assets, ensuring that franchisees are granted the necessary rights to operate under the Potbelly Sandwich Works brand while also safeguarding the company's intellectual property rights.