Potbelly Corp. has signed a multi-unit deal to refranchise eight locations in New York City with a franchisee who plans to open another 13 over the next eight years.
Ownership of the eight units has been transferred to United One Group, an experienced franchise operator of multiple brands in Manhattan, led by CEO Paramjit Josan and Chief Development Officer Manny Singh.
It’s the first of what the company hopes will be many refranchising deals to come.
Last year, CEO Bob Wright outlined the chain’s planned 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, and Wright said the goal was to refranchise about 25% of company-operated units over three years to reignite growth.
Wright’s goal: reaching 2,000 Potbelly locations within the next decade.
“This agreement marks an important milestone for our Franchise Growth Acceleration Initiative as we expand Potbelly’s footprint across the country,” Wright said in a statement last week. “It also demonstrates our confidence in the dynamic New York market as well as Central Business District shops for the brand.”
Earlier this month, Potbelly said preliminary first-quarter results indicate sales and profit margins were better than expected. Same-store sales were up between 22% and 22.3%, exceeding projections.
The sandwich chain is expecting to hit record average unit volumes this year. Potbelly’s AUVs for 2022 were $1.16 million. The company is hoping to surpass $1.3 million.
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