Financing

Struggling Potbelly shores up its capital to stay afloat

The sandwich chain has secured $16 million in funding and has a new line of credit.
Potbelly Sandwich Shop
Photo: Shutterstock

Struggling sandwich chain Potbelly Sandwich Shop has raised about $16 million in funding and boosted its credit facility, the Chicago-based chain announced Wednesday.

The $16 million comes from the sale of Potbelly stock, in a deal that is slated to close Friday. The proceeds will be used for working capital and “general corporate purposes,” the operator said in a press release.

Under the new credit agreement with its bank, Potbelly will have a $25 million revolving credit facility that matures in January 2023.

“Today is a great day for Potbelly as we enhance our ability to achieve ‘Traffic-Driven Profitability,’” CEO Bob Wright said in a statement. “As 2021 progresses, we expect to see our customers increasingly enjoy Potbelly’s offerings as the pace of COVID-19 vaccinations and dining-room re-openings accelerate across our markets.”

Potbelly, like many fast-casual chains centered in urban locations, has been hard hit by the pandemic as downtown office workers continue to work from home.

Potbelly has seen sales and traffic nosedive during the crisis and is embroiled in a dispute with the landlord of its Chicago headquarters.

The chain’s same-store sales fell 21% in Q3 and the company closed more than 20 units, compared with the same period last year.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

How Popeyes changed the chicken business

How did a once-struggling, regional bone-in chicken chain overtake KFC, the formerly dominant player in the U.S. market? With a fixation on sandwiches and many more new restaurants.

Financing

Get ready for a summertime value war

The Bottom Line: With more customers opting to eat at home, rather than at restaurants, more fast-food chains will start pushing value this summer.

Food

Inside Chili's quest to craft a value-priced burger that could take on McDonald's

Behind the Menu: How the casual-dining chain smashes expectations with a winning combination of familiarity and price with its new Big Smasher burger.

Trending

More from our partners