Does the transfer of a Potbelly Sandwich Works franchise include real property?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Seller is the owner of a leasehold interest in each parcel of real estate where the Shops are located as set forth on Exhibit A (collectively, the "Leased Real Property");
WHEREAS, Seller desires to transfer, assign and sell to Purchaser, and Purchaser desires to acquire and purchase from Seller, all of Seller's right, title and interest in and to certain of the assets used or to be used exclusively in the operation of the Shops, in each case upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Agreements (except as otherwise indicated, capitalized terms used but not defined in these recitals have the meaning ascribed to such terms in Section 1.01 below or referenced in Section 1.02 below);
WHEREAS, at the Closing, Seller, Purchaser and Guarantor shall enter into separate assignments of lease or subleases pursuant to which Seller shall assign the lease for Leased Real Property to Purchaser or sublease the Leased Real Property to Purchaser, each such assignment and/or sublease in form and substance acceptable to the parties thereto (collectively, the "Assignments" or "Subleases", as applicable);
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the transfer of a franchise may involve the assignment or sublease of real property. Specifically, Potbelly Sandwich Works may transfer its leasehold interest in the real estate where the Shops are located to the purchaser.
The Asset Purchase Agreement includes provisions for the transfer, assignment, and sale of assets used in the operation of the Potbelly Sandwich Shops. As part of this agreement, Potbelly Sandwich Works will assign the lease for the Leased Real Property to the purchaser or sublease the Leased Real Property to the purchaser. These assignments or subleases must be acceptable in form and substance to all parties involved.
Furthermore, Potbelly Sandwich Works retains the right to approve the terms of any real estate agreement, including lease payments or purchase price, before the franchisee signs it. The franchisee must provide Potbelly Sandwich Works with a copy of the proposed final form of the Real Estate Agreement for review and written acceptance before signing. This ensures that the real estate arrangements align with Potbelly Sandwich Works' standards and requirements.