Potbelly's Is Getting Bigger

Chicago-based Potbelly's looking to open up to franchisees

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    Potbelly’s keeps on expanding.

    The Chicago-based sandwich company is looking to expand from its current Chicago-dominated market by opening up to franchises far and wide, Crain’s Chicago reports.

    In the past, Potbelly’s chairman, Bryant Keil, has resisted the idea of growing through franchising. But ever since hiring the company’s new CEO Aylwin Lewis last year, Keil is all about making the leap -- and he wants to start with 40 franchises.

    “Having a guy like Aylwin, who has been so involved in the franchise world, was really the last tipping point to make sure we could do it,” Keil told Crain’s. “It’s absolutely the right move, and we are now totally ready.”

    Lewis, the former chief executive of Sears Holding Corp. who also helped run the company that owns Pizza Hut and Taco Bell, was hired last year to help the company's agressive expansion.

    Keil and Lewis are hoping to salvage the restaurant’s food quality, customer service and its original look while opening the company up to franchise owners, which is a difficult proposition.

    The company, already present in 12 states through the Midwest and Mid-Atlantic, has reportedly set its eyes on Missouri, Iowa, Tennessee, Oklahoma, Kansas and Nebraska. Cities like Cleveland, Memphis and San Antonio might soon see their first Potbelly’s, too.

    The estimated cost for a new franchisee can vary from $450,000 to $750,000, including a $40,000 fee to the company. In addition, all franchisees would have to pay at least six percent of gross sales in royalties and four percent in marketing fees to Potbelly's.