When CEO Alan Johnson succeeded interim leader Michael Coyne on December 4, Ortiz shot him a message on Linkedln and wished him luck. Johnson responded in less than 30 minutes and the two stayed in touch. Eventually, industry vet Jeff Welch, Potbelly’s SVP of franchise development who also joined the company in 2018, called Ortiz and the negotiations began. The former head of Krispy Kreme’s international division, Ortiz says the experience “was like the president was calling me.”
It also appealed to Ortiz to join a rapidly evolving executive team. Johnson brought in Brandon Rhoten from Papa John’s to serve as CEO; named Tom Fitzgerald CFO after a run as president and CFO of retailer Charming Charlie; picked Chef Ryan LaRoche as its first head of culinary innovation; promoted Matt Revord to chief people officer; Julie Younglove-Webb to chief restaurant operations officer; and Maryann Byrdak to SVP of information technology.
“There are many places where I’ve been to where I’ve been Ringo,” Ortiz quips.
Work to be done
Potbelly enjoys a cult-like fanbase in many of its legacy markets. There’s even an underground menu. However, even with serious brand equity to spare, the sandwich chain’s top- and bottom-line health has been a bit more stressed recently. During a strategic review last year, the company considered—then ditched—a possible sale.
Its total revenue dropped 1.3 percent to $422.6 million from $428.1 million in fiscal 2018 versus the prior year. The company opened 17 restaurants, including 10 corporate units and seven franchised, but closed 23 (10 company run and 13 franchised).
In the fourth quarter, company-run same-store sales decreased 1.7 percent as nine restaurants shuttered (seven franchises) and seven opened (four company-run).
Perhaps the blockbuster event of 2018 was a fall test of concept menuboards at 58 locations. The chain also piloted, for the first time in its history, the inclusion of combos and bundle offers on its menuboards. It offered a pick-your-pair option that bundled a half sandwich with a choice of salad, soup, or mac and cheese, as well as a make-a-meal option that combines a guest’s choice of chips and a fountain drink or chips and a shake. By February 12, the new enhanced menuboards were systemwide.