PBPB - Potbelly: New Units Coming Out Of The Oven!
2024-07-13 09:46:44 ET
Summary
- Potbelly aims to grow through franchising, with a goal of becoming 85% franchised, focusing on lean unit models for expansion.
- The company's paradigm shift includes a focus on digital sales, loyalty programs, and a new unit model to drive growth.
- Potbelly's financial performance in the first quarter of 2024 shows improvements in key cost centers, with a potential upside of 38% in valuation.
Context
Potbelly ( PBPB ) has as a cornerstone of its value proposition the development of a friendly and welcoming concept that emulates the atmosphere of a neighborhood sandwich shop, despite its more than 427 locations in 31 states and the District of Columbia. Quickly contextualizing the history of the company, it was born in Chicago, but precisely on Lincoln Avenue in 1977. In fact, the idea of ??the creator, Peter Hastings, was for the sandwich shop to be used to offer a meal for his antique store, which had been opened six years earlier. Soon Potbelly grew locally and eventually became Peter's main business.
It was only in 1997 when the company opened its second unit. Since then, the fast casual chain has expanded with a predominance of its own units rather than franchises, which we know requires a greater amount of capital employed. Around 81% of Potbelly's units are owned and around 19% are franchises. In fact, the need for equity to accelerate the growth of units was Potbelly's main focus in its more mature phase of growth. As a result, an IPO was held in October 2013, raising more than $108 million. The share price rose 141% during the day the company went public....
Potbelly: New Units Coming Out Of The Oven!