Potbelly’s Sandwich Works in Chicago to Franchise?

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Article by Ryan Knoll

Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115. Ryan Knoll tagged this post with: potbelly Read 448 articles by Ryan Knoll

1. FuwaFuwaUsagi says:

   February 3, 2009 at 10:31 pm

   Potbelly’s is by far my favorite chain. And I would assume they have some advantages over other chains. That being said there is nothing here you cannot do for yourself. I know part of the charm is that they do not franchise. That is pretty clear if you interview their customers, which I have done. There is a right way and an incorrect way to do this. I’d be curious how smart they are about it. My guess is they will blow it. I have already seen some rather annoying regional derivation.

   I would enjoy a look at the FDD, and would be very curious what the royalty and advertising fee is slated to be.

   Yuuummmm…low the veggie sub….caloric as heck by the way, but so good.

   FuwaFuwaUsagi

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2. Ryan Knoll says:

   February 4, 2009 at 12:53 am

   I’m a big fan of Potbelly’s, too. I prefer the wreck on wheat, skinny, with everything. Veggie sub…you a vegan?

   While the food is good, it is not special by any standard and seems to be fairly consistent across units. The customer experience is well done with the vintage store and aged wood accents.

   I suspect the franchising strategy may be due to trying to keep growth rates up in light of diminished capital availability over the next few years. They may also be seeing the increased evidence of normalized and less volatile returns with franchised stores.

   With Starbuck’s Shultz’s venture capital firm providing some of the $86 million in financing for Potbelly’s and more than a few Starbuck’s executives hired into management, I would wager that an IPO is the goal when the market recovers. Nearly all private equity funds have an expected investment exit of under 10 years, so I’m sure this is to help facilitate the exit.

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3. FuwaFuwaUsagi says:

   February 4, 2009 at 9:07 am

   Ryan queries:

   I’m a big fan of Potbelly’s, too. I prefer the wreck on wheat, skinny, with everything. Veggie sub…you a vegan?

   My reply:

   No, I just have an irrational fear of mad cow disease; key word, irrational. As a result I gave up all red meat, pork, etc and restrict myself to chicken, turkey and duck 1 year or less, The rest is vegetables, fruit, and soda pop : )

   I remember the day I stopped eating red meats well. I was in Pittsburgh and went to the 1902 tavern and had Prime Rib medium rare….delicious.

   Now when I am in Pittsburgh I hand out at the Original Oyster House or a Hispanic joint called Mexico City.

   Sorry to read what you noted above, funny but I was discussing this with my woman last night, and I told her I guessed this would roll out on the Starbucks model and eventually encounter the same problems. Time will tell.

   All the best Ryan,

   FuwaFuwaUsagi

   Reply
4. Ryan Knoll says:

   February 4, 2009 at 11:53 am

   FuwaFuwaUsagi wrote on February 4, 2009 @ 9:07 am:

   Ryan queries:

   I’m a big fan of Potbelly’s, too. I prefer the wreck on wheat, skinny, with everything. Veggie sub…you a vegan?

   My reply:

   No, I just have an irrational fear of mad cow disease; key word, irrational. As a result I gave up all red meat, pork, etc and restrict myself to chicken, turkey and duck 1 year or less,

   The rest is vegetables, fruit, and soda pop : )

   I remember the day I stopped eating red meats well. I was in Pittsburgh and went to the 1902 tavern and had Prime Rib medium rare….delicious.

   Now when I am in Pittsburgh I hand out at the Original Oyster House or a Hispanic joint called Mexico City.

   Sorry to read what you noted above, funny but I was discussing this with my woman last night, and I told her I guessed this would roll out on the Starbucks model and eventually encounter the same problems.

   Time will tell.

   All the best Ryan,

   FuwaFuwaUsagi

   Very funny…I’m about to stop eating pork and eating food other people prepare after seeing this video of brain worms obtained from undercooked pork or from someone not washing their hands after going to the bathroom.

   http://media2.foxnews.com/112008/worm_tumor_700.wmv

   Reply