Under what circumstances must a Potbelly Sandwich Works franchisee immediately notify Potbelly Sandwich Works in writing?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
ubsection 14.B.
B. GRANT OF A SUCCESSOR FRANCHISE.
You agree to give us written notice of your election to acquire a successor franchise no more than two hundred seventy (270) days and no less than one hundred eighty (180) days before this Agreement is scheduled to expire. We will give you written notice of our decision ("Our Notice"):
- (1) to grant you a successor franchise;
- (2) to grant you a successor franchise on the condition that you correct existing deficiencies of the Shop or in your operation of the Shop; or
- (3) not to grant you a successor franchise based on our determination that you and your owners have not substantially complied with this Agreement during the Term or
were not in substantial compliance with this Agreement and all System Standards on the date you gave us written notice of your election to acquire a successor franchise.
We will not unreasonably withhold or delay our consent to a successor franchise if the conditions specified in this Section 13 have been satisfied. If applicable, Our Notice will:
- (a) describe the remodeling, expansion, improvements and/or modifications required to bring the Shop into compliance with then applicable System Standards for new Potbelly Shops;
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
Based on the 2025 FDD, a Potbelly Sandwich Works franchisee must provide written notice to Potbelly Sandwich Works if they elect to acquire a successor franchise. Specifically, the franchisee must notify Potbelly Sandwich Works in writing of their decision to acquire a successor franchise no more than 270 days and no less than 180 days before the current agreement is set to expire.
This notification is crucial because it allows Potbelly Sandwich Works to assess the franchisee's compliance with the existing agreement and system standards. Potbelly Sandwich Works will then provide written notice of their decision to either grant the successor franchise, grant it conditionally upon correcting deficiencies, or deny it if the franchisee has not substantially complied with the agreement during the term. This process ensures that only qualified and compliant franchisees are granted the opportunity to continue operating a Potbelly Sandwich Works location.
The requirement for written notice within a specific timeframe is a standard practice in franchising, allowing the franchisor adequate time to evaluate the franchisee's performance and make informed decisions about the future of the franchise relationship. Failing to provide this notice within the stipulated window could jeopardize the franchisee's opportunity to renew their franchise agreement. The franchisee bears the responsibility of ensuring they meet all conditions, including providing timely written notice, to be eligible for a successor franchise.
If a franchisee (and their owners) did not substantially comply with the Agreement during the Term or are not in substantial compliance with the Agreement and all System Standards both on the date they notify Potbelly Sandwich Works in writing of their election to acquire a successor franchise and on the date on which the successor franchise term is scheduled to commence, Potbelly Sandwich Works does not need to grant a successor franchise, whether or not Potbelly Sandwich Works had, or chose to exercise, the right to terminate this Agreement during the Term.