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

With plans to shift the concept from primarily company-owned to primarily franchise-operated, the sandwich franchise is looking to reach 2,000 locations within the next decade. But is the investment tasty enough to achieve that kind of unit count?

By Luca Piacentini1851 Franchise Managing Editor

10:10AM • 06/07/23

LAST UPDATED: October 2023

FRANCHISE WEBSITE: https://www.potbelly.com/franchising-why-potbelly

NUMBER OF LOCATIONS: 474

REPORTED COST TO GET IN: $666,050 - $ 955,200

REPORTED ROI (Item 19): $1.16 million (AUV for 2022)

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.

How Many Potbelly Locations Are There?

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.

What Is the Potbelly Business Model?

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

How Much Can Potbelly Franchise Owners Make?

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.

How Much Does It Cost to Open a Potbelly?

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

Type of expenditure	Amount	To whom payment is to be made
Initial Franchise Fee	$40,000	Potbelly Franchising, LLC
Real Estate / Rent	Determined by your lease	Landlord
Security Deposit	Determined by your lease	Landlord
Construction / Leasehold Improvements	$250,000 - $400,000	Outside Suppliers
Architect Fee (for your architect)	$17,900 - $28,000	Architect
Furniture, Fixtures and Signage	$43,000 - $95,000	Outside Suppliers and Potbelly Sandwich Works, LLC
Equipment (including smallwares)	$100,000 - $114,000	Outside Suppliers and Potbelly Sandwich Works, LLC
Point-of-Sale and Computer Systems	$53,000 - $63,000	Outside Suppliers
Opening Inventory	$12,000 - $18,000	Designated and Approved Suppliers
Market Introduction Program	$25,000	Marketing Sources (possibly Potbelly Sandwich Works, LLC if you do not conduct program as required)
Insurance (12 months)	$11,000 - $18,000	Insurance Company
Training Expenses	$15,000 - $45,000	Third Parties
Professional Fees	$2,000 - $5,000	Professional Advisors
Business Licenses and Permits	$250 - $1,700	Government Agencies
Office Equipment and Supplies	$800 - $3,000	Third Parties
Total Estimated Initial Investment (excluding real estate lease / acquisition costs)	$594,950 - $899,700

What Is the Franchise Fee for Potbelly?

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

Who Is the Leadership of Potbelly?

What Helpful Articles Can I Read to Learn More About Potbelly?

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