AAP Podcast #49: Potbelly – Love the Sandwiches and Cookies, Look at the Results

On this week’s AAP podcast, we delve into the quick-service restaurant business with Potbelly (PBPB) CEO Bob Wright. No stranger to the restaurant industry given his time at Wendy’s (WEN), Charley’s Philly Steaks, Checker’s Drive-In Restaurants, and Domino’s Pizza (DPZ), Wright entered Potbelly as President and CEO during a challenging time for the company in 2020. Flash forward to today and Potbelly is coming off reporting positive same-store comps for nine consecutive quarters, including +12.9% for its June quarter.

During the conversation with AAP’s Chris Versace, the two discuss why Wright came to Potbelly, steps taken to turn the company around, how, and why franchising provides an avenue for growth, food inflation, pricing, and much more. For those that have yet to sample the Potbelly menu, be sure to listen to several of Wright’s callouts, including the cookies and what he keeps in his refrigerator at home.

From an AAP portfolio perspective, Potbelly’s franchising strategy follows in the footsteps of McDonald’s (MCD) while its focus on fresh food is similar to Chipotle (CMG). We like the steps enacted by Wright and the team, especially the profitable and asset-lite model better known as franchising. The average daily trading volume and market cap for PBPB shares make them a tasty consideration for investors looking for small-cap stocks.