Under what conditions must a Potbelly Sandwich Works franchisee appoint an 'Operator'?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a legal entity, you must appoint a shareholder, member or partner (as applicable) to be your "Managing Owner," responsible for overseeing and supervising the Shop's operation. If your Managing Owner will not be involved in the Shop's on-site, day-to-day operation, you also must appoint an "Operator," an individual whom you hire to manage the Shop on an on-site, dayto-day basis (or, if you operate more than one Potbelly Shop, to oversee management and operation of all your Potbelly Shops), who reports to the Managing Owner, who is eligible to participate in a long-term incentive plan (i.e., cash bonus or equity grant), and who completes the applicable training requirements. We must approve your proposed Operator, who must sign our Principal's Agreement (see below). You may replace any Operator, although that person must give up his or her ownership interest in you, a replacement Operator must complete training to our satisfaction, and you must identify and we first must approve any new or replacement Operator. Your Shop always must have on staff at least 3 fully trained, certified key-holding supervisory employees, including a Managing Owner and a General Manager, so that the quality of the Products and the Potbelly brand is maintained.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 56–57)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, if the franchisee is a legal entity (such as a corporation, limited liability company, or partnership), they must appoint a Managing Owner who is a shareholder, member, or partner responsible for overseeing the Shop's operation. If this Managing Owner will not be involved in the Shop's on-site, day-to-day operations, the franchisee must also appoint an Operator.
The Operator is an individual hired to manage the Potbelly Sandwich Works Shop on a day-to-day basis, reporting to the Managing Owner. If the franchisee operates more than one Potbelly Sandwich Works location, the Operator can oversee the management and operation of all the franchisee's Potbelly Sandwich Works Shops. The Operator must be eligible to participate in a long-term incentive plan, such as a cash bonus or equity grant, and must complete the required training.
The franchisor, Potbelly Sandwich Works, must approve the proposed Operator, who is also required to sign a Principal's Agreement. While the franchisee can replace an Operator, the replaced Operator must relinquish their ownership interest in the franchise. Any replacement Operator must complete training to Potbelly Sandwich Works's satisfaction, and Potbelly Sandwich Works must approve any new or replacement Operator. Each Potbelly Sandwich Works Shop must have at least three fully trained, certified key-holding supervisory employees, including a Managing Owner and a General Manager, to maintain product quality and the Potbelly Sandwich Works brand standards.