Potbelly Corporation has prioritized refranchising in 2023, aiming for approximately 25 percent of its corporate locations to convert during the next three years.
As a launching off point for the refranchising program, the brand recently signed a multi-unit deal for New York City, which calls for 13 new shops over the next eight years, and the refranchise of eight shops. Ownership of the shops has been fully transferred to United One Group (“UOG”), an experienced franchise group led by Chief Executive Officer Paramjit Josan and Chief Development Officer Manny Singh. Combined, the UOG team has over 75 years of restaurant experience, developing and operating fast casual concepts, quick service restaurants and sandwich-specific brands, as well as other hospitality-focused businesses, in the Manhattan region.
Beyond refranchising, the brand’s U.S. growth plans through franchising call for significantly advancing its national footprint. Potbelly is focused on a 10 percent annual new unit growth rate by 2024, with accelerated expansion in the years to follow. The company has set a goal of reaching 2,000 total units in the next eight to 10 years, with at least an 85% franchise system. As Potbelly escalates its franchising initiative across the country, it is focused on awarding development agreements to talented multi-unit operators that have proven experience in developing and operating multi-unit restaurant and retail brands. The prioritization of franchise growth supports the brand’s ‘Traffic Driven’ Profitability Strategic Plan, which includes recent Tech Stack rollouts, (the app, website and Perks Loyalty Program) and implementation of a new menu.
“We are zeroed-in on our growth goals, which includes a huge prioritization on refranchising,” says Larry Strain, Chief Development Officer at Potbelly. “We have unique opportunities for multi-unit franchise groups. Based on recent interest from proven operators, it’s clear that our business model, advanced operations and increasingly strong cash flow are resonating with the right groups.”
Potbelly’s expansion and refranchising plan comes as it boasts the highest average unit volume (AUV) in its category, an excellent sales-to-investment ratio, a seasoned leadership team with 100-plus years of combined experience and double-digit same-store sales growth. Plus, operators can benefit from the sandwich concept’s flexible store designs, including inline, endcap, drive-thru and non-traditional locations, which are equipped with tech-enabled enhancements to foster in-store, take-out and delivery dining. These factors, along with a diverse menu and multiple revenue streams stemming from various dayparts and catering, all make Potbelly an attractive franchise restaurant investment.
“Our Franchise Growth Acceleration Initiative pairs new shop development with a plan to refranchise an ample amount of corporate shops, creating enormous potential for multi-brand franchisees ready to grow with a distinguished concept like Potbelly,” says Bob Wright, CEO of Potbelly. “Forging partnerships with the right groups is essential to our growth and success. We’re a well-built brand with an experienced corporate team ready to support franchisees and cultivate the brand further together.”
Ideal franchise candidates should be able to meet the required financial criteria, have restaurant operations experience, strong entrepreneurial skill sets, focused and driven problem solving and enjoy working with others.