Potbelly Makes Its Franchising Debut

Potbelly Sandwich Shop has taken its first steps into franchising. In a freshly inked deal, the Chicago-based restaurant chain will celebrate the opening of the first franchised Potbelly before the end of the year in El Paso, Texas. The shop will join more than 30 other Potbelly locations in the Lone Star state. The closely held company got its start in Chicago in 1977, and now has more than 200 restaurants in 12 states.

The deal marks the start of Potbelly’s franchise program, announced last year after more than a decade of requests from eager investors. The program was instituted by Potbelly Pres. and CEO Aylwin Lewis, a veteran of Yum! Brands.

The franchise program aims to expand Potbelly to more than 40 cities. According to Crain’s Chicago Business, the first-ever franchisees were among the 6,000 people who contacted Potbelly over the years asking about a franchise. Last year, the company got in touch with many of those who inquired. The company says franchisees will initially be limited to operating a single Potbelly restaurant with the possibility of opening more in the future.

Potbelly estimates that a franchisee needs an initial investment of between $450,000 and $750,000, including a $40,000 company fee. The equipment and smallwares package is in the range of $75,000-$125,000, according to Potbelly’s website.