Under what circumstances must I indemnify Potbelly Sandwich Works?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Will vary under circumstances and depend on nature of third- party claim | As incurred | You must reimburse us if we are held liable for claims from your Shop’s operation or incur costs to defend them (when we are not at fault). |
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, franchisees may be required to indemnify the company under certain circumstances. Specifically, a franchisee must reimburse Potbelly Sandwich Works if the company is held liable for claims arising from the franchisee's Shop operation or if Potbelly Sandwich Works incurs costs to defend against such claims, provided that Potbelly Sandwich Works is not at fault. The exact amount of indemnification will vary depending on the specific circumstances and the nature of the third-party claim.
This means that if a customer or employee is injured or otherwise harmed due to the franchisee's actions or negligence at their Potbelly Sandwich Works location, the franchisee may be responsible for covering Potbelly Sandwich Works's legal costs and any damages awarded. This could include situations such as food poisoning incidents, slip-and-fall accidents, or violations of labor laws.
It is important for prospective Potbelly Sandwich Works franchisees to understand that this indemnification clause could potentially expose them to significant financial liabilities. Franchisees should ensure they have adequate insurance coverage to protect themselves against such claims and should operate their businesses in a manner that minimizes the risk of third-party claims. Consulting with a legal and financial advisor is recommended to fully understand the implications of this clause and to develop appropriate risk management strategies.