Post on 08-Feb-2017
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06/24/2015 Potbelly Sandwich Shop
By implementing a management initiative to attract highly qualified franchisees to expand revenue rapidly and solidifying the Potbelly brand as the neighborhood sandwich shop, Potbelly’s profitability
will increase dramatically.
Group 1-9: Stephanie Castillo, Mac Dobbins, Wendy Qi, Charles Snipes, Jason Warren
❧❧ The Two Pronged Approach to Creating Value for Potbelly
❧ Creation of a New Mission
❧ Potbelly is your Neighborhood Shop
❧ An Integrated Frame Campaign to Create Value
❧ Use Cash to Expand Franchise Operations
Agenda
❧An Integrated Marketing Campaign with a Focus on Neighborhood
An Integrated Marketing Campaign With A Focus On Neighborhood
❧An Integrated Marketing Campaign with a Focus on Neighborhood
An Integrated Marketing Campaign With A Focus On Neighborhood
A taste of home away from
home.
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#PotbellyRichmond
#PotbellyNewYork
#PotbellyChicago
#Potbelly@Chicago
A Picture Frame That Promotes Neighborhood, Closeness, And Togetherness
❧145,438 likes 500,000 likes
Social Media Campaign Will Be Created From The Picture Frames
13,200 followers 50,000 followers
1678 followers 10,000 followers
❧Potbelly Should Carefully Open 50 New Franchises Over the Next Year
❧ The Current Franchise Model of Potbelly Should Be Adjusted to Maintain Strict Brand Discipline
$19 Million 50 New Shops22.4% Return and $2.7 Million NPV
❧Liquidity Ratios 2012 2013 2014 Avg
Industry Average
Post 19 Million Cash Expansion
Current Ratio 1.88 4.37 3.84 3.01 2.48 2.93
Quick Ratio 1.77 4.25 3.71 2.88 2.36 2.80
2012 2013 2014 Cash and Cash Equivalent 22,595 69,579 63,005
Liabilities 45,084 32,807 35,888
Use Potbelly’s Cash to Expand Franchise Operations
❧Debt Management 2011 2012 2013 2014 Avg
Industry Average
Times Interest Earned 16.6 x 16.9 x 3.5 x 40.62 19.39 104.3x
Debt/Assets Ratio 15.4% 12.0% 0.6% 0.5% 9.3% 0.90%
Long-term Debt/Equity 27.8% 18.5% 0.7% 0.0% 15.7% 0.01
❧ No long-term debt in 2014❧ Doesn’t need debt
Potbelly is Unlevered...And It Doesn’t Need Debt To Expand
❧Same Store Sales (Q1,2015)
Fast Casual %Change
Chipotle 10.4
Cosi 1.2
Noodles 0.8
Panera 1.5
Potbelly 5.4
Existing Stores Are Doing Well
❧❧ Reduce Franchisee Investment $40,000 $15,000
❧ Potbelly Finances: Setup and Operating Expenses
❧ ~$180,000/Shop Setup+$766,000/Shop Operating Expenses Annually
❧ 50% of Profit from Franchisees Potbelly
❧ $10 Million Training and Management Program
Change Existing Franchise Model
❧❧ $1.87 Million Additional Profit for Potbelly
❧ Close Corporate Management of Franchise Operations
❧ + $300 Million in Annual Revenue
❧ More Potbellys Can Help Existing Potbellys
❧ Establishes Infrastructure for Disciplined Franchise Growth
After the First Year...