Franchise Deep Dive: Potbelly Franchise Costs, Fees, Profit and Data

Potbelly is a fast casual sandwich franchise concept known for its unique atmosphere, friendly staff and tasty food. The menu includes a variety of sandwiches, salads and soups made with fresh ingredients on daily-baked bread. Customers can also choose an array of shakes and malts to complete their meals. The brand competes in the sandwich segment against brands like Jimmy John’s, Jersey Mike’s and Subway.

Company history

As of the writing of this, there are 474 Potbelly locations across the U.S.

Potbelly was founded in 1977 by Peter Hastings, who opened the first sandwich shop in an antique store on Chicago’s Lincoln Avenue. The menu included freshly made sandwiches, salads, soups and shakes. In 1996, a local entrepreneur and Potbelly regular Bryant Keil purchased the company from Hastings and opened the first franchised store in Houston. He then grew the company from one to 250 shops over the next 12 years.

In 2005, the 100th Potbelly Sandwich Shop opened, and Inc. Magazine named Potbelly one of “America’s 500 Fastest Growing Private Companies.” In 2013, Potbelly became a publicly traded company.

Today, there are more than 400 stores located in 30 states, most of which are company-owned. In 2022, the Potbelly team announced a shift in strategy to move from a primarily company-owned operation to one that is 85% franchise-operated. At the time, the 445-unit chain had only 46 franchise units. Potbelly aims to “refranchise” about 25% of company-operated units over three years to reignite growth and hopefully reach 2,000 locations within the next decade. The sandwich chain is expecting to hit record average unit volumes in 2023.

Potbelly’s target demographic is people looking for a quality, affordable lunch. Their menu includes subs with several toppings, soups, shakes and salads served in a dining area with old-wood decor and live music. This ambiance gives the restaurant a warm, neighborhood feel. The brand is known for using quality ingredients while still providing customers with an affordable price.

Potbelly offers several build-out options, including:

• Old-school shops

• Mall shops

• Drive-thru shops

• Strip mall shops

Financial performance

According to Potbelly’s 2022 Franchise Disclosure Document (FDD), average weekly gross sales for the 38 franchised Potbelly shops was $15,058. Eighteen of the 38 (47%) exceeded the average weekly gross sales of $15,058. Median weekly gross sales for these 38 franchised shops during 2021 was $14,504. The highest weekly gross sales for any of the 38 shops during 2021 was $25,532. The lowest weekly gross sales during 2021 was $9,584.

Potbelly’s average unit volume (AUV) for 2022 was $1.16 million.

The estimated total investment necessary to begin the operation of a non-drive-thru Potbelly franchise is as follows:

Potbelly requires a franchise fee of up to $40,000.

• Robert Wright — President and Chief Executive Officer

• Steven Cirulis — Senior Vice President, Chief Financial Officer, Chief Strategy Officer

• Adam Noyes — Senior Vice President and Chief Operations Officer

• Adiya Dixon Wiggins — Senior Vice President and Chief Legal Officer and Secretary

• Jeffrey Douglas — Senior Vice President and Chief Information Officer

• David Daniels — Senior Vice President and Chief Marketing Officer

• Lynette McKee - Senior Vice President of Franchising

• Patrick Walsh - Chief People Officer

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