Potbelly franchise cost per the 2026 FDD: $628,938 to $999,371 to open, a $40,000 fee, 6% royalty, and a $1,195,243 median across 97 franchised shops.
Quick answer A Potbelly Sandwich Shop costs $628,938 to $999,371 to open per Item 7 of the 2026 FDD, including a $20,000 to $40,000 franchise fee (the standard fee is $40,000). The royalty is 6% of weekly revenue plus a 3% brand fund. Median 2025 sales were $1,195,243 across 97 franchised shops.
Potbelly Franchising, LLC prices one Potbelly Sandwich Shop at $628,938 to $999,371 in Item 7 of its 2026 Franchise Disclosure Document (issuance date April 23, 2026, pages 18 to 22). Item 19 reports a $1,195,243 median across the 97 franchised shops open for all of fiscal 2025.
That pairing puts Potbelly in a narrower capital band than most full-size restaurant brands, and it comes with a disclosure that splits sales by location type for franchised, affiliate and systemwide shops. It also comes with a new owner. RaceTrac bought the parent company in October 2025, and the 2026 FDD is the first written under it.
| Item 7 line | Low | High |
|---|---|---|
| Initial franchise fee | $20,000 | $40,000 |
| Lease and utility security deposits | $4,500 | $9,000 |
| Real estate | See Note 3 | See Note 3 |
| Architectural fees | $14,815 | $22,137 |
| Leasehold improvements | $329,727 | $435,090 |
| Signage | $8,318 | $26,144 |
| Furniture, fixtures and equipment | $197,507 | $268,315 |
| Smallwares | $11,000 | $45,000 |
| Technology | $20,564 | $37,488 |
| Training expenses | $500 | $10,000 |
| Insurance, 12 months | $4,000 | $9,240 |
| Professional fees | $2,378 | $3,250 |
| Business licenses and permits | $831 | $3,707 |
| Office equipment and supplies | $1,000 | $5,000 |
| Market introduction program | $10,000 | $15,000 |
| Opening inventory | $3,698 | $20,000 |
| Additional funds, 3 months | $100 | $50,000 |
| Total | $628,938 | $999,371 |
A traditional Potbelly occupies 1,500 to 2,000 square feet of leased space in a strip center, mall or lifestyle center near daytime traffic: offices, campuses, hospitals and transit (Note 3). You are paying to build out a shell, not a building.
Leasehold improvements are the largest line at $329,727 to $435,090. Note 4 puts the average at $261 per square foot, and shops that opened in fiscal 2025 ranged from $202 to $296. Those figures assume the landlord delivers walls, a concrete floor, exposed ceiling, utilities and HVAC, and they do not account for any landlord tenant-improvement contribution. Enclosed malls cost more.
Furniture, fixtures and equipment add $197,507 to $268,315: refrigeration, conveyor ovens, prep tables, beverage machines, a floor safe and dining furniture. Smallwares ($11,000 to $45,000) and part of the FF&E come from PSW, LLC, a Potbelly affiliate.
Drive-thru shops need 2,000 to 2,200 square feet on an out-lot, with additional construction, equipment, labor and technology costs that Note 3 does not price.
Rent. Item 7 does not estimate it. Note 3 puts occupancy at $35 to $50 per square foot, and shops opened in fiscal 2025 averaged $42 (median $40) on 1,510 to 2,504 square feet. A 1,750-square-foot shop at $42 is about $73,500 a year.
Working capital. The additional-funds line starts at $100. Note 15 says it covers three months of expenses including payroll, but not an owner’s salary. No sandwich shop opens on $100 of reserves. Budget from the $50,000 high end at minimum. Our Item 7 guide explains why the low column of a working-capital line rarely means what it says.
The cover page adds the number that goes to Potbelly and its affiliates: $38,000 to $144,000 of the total.
Item 5 (pages 7 to 10) sets the initial franchise fee at $40,000, paid in full at signing. In fiscal 2025, Potbelly collected initial fees of $10,000 to $40,000 and successor fees of $5,000 to $10,000. If you have not found a site and Potbelly has not accepted one within 180 days of signing, either side can terminate.
Multi-unit buyers sign a Shop Development Area Agreement (SDAA). The development fee is $40,000 (the first shop’s fee) plus $20,000 for each additional shop, paid at signing and non-refundable. Development fees collected in 2025 ranged from $20,000 to $180,000.
Two incentive programs run through 2026 and 2027:
| Program | Who qualifies | Fee per shop | Royalty |
|---|---|---|---|
| 50/50 Incentive Program | Shops opened early or on time in 2026 and 2027 under an SDAA | $20,000 | Cut by 50% for 1 to 52 weeks |
| Large Area Developer Incentive | SDAA signed in 2026 for at least 15 shops in one area within 8 years | $20,000 for shops opened early | Cut by 50% until the required opening date; development fee also halved |
Default on any agreement and Potbelly can cancel the discounts and require you to repay them. That is why the Item 7 fee line starts at $20,000: the low end assumes you qualify.
Other Item 5 charges: a $5,000 asset transfer fee if you buy an existing company shop, an architectural review fee of $2,000 if you use your own architect, a site investigation report of $6,500 to $10,000 that Potbelly covers unless you fail to secure the site, and $18,000 to $42,000 of required items from PSW, LLC (interior menu boards, lighting, millwork, décor and tabletops).
See the full Potbelly data sheet
Item 6 (pages 10 to 18) is collected weekly by automatic debit every Wednesday.
| Item 6 fee | Amount |
|---|---|
| Royalty | 6% of weekly Total Revenue |
| Brand Fund | 3% of weekly Total Revenue; can rise to 4% on 90 days’ notice |
| Local marketing spend | At least 1% of Total Revenue |
| Total required marketing | Capped at 5% of Total Revenue |
| Technology services | $1,165 per month plus $0.20 per digital transaction |
| Successor franchise | 25% of the then-current initial fee |
| Transfer (controlling interest) | 20% or 50% of the then-current initial fee |
| Relocation | 20% of the then-current initial fee |
| Training beyond the first 3 people | Up to $500 per trainer per day |
| Re-inspection | Up to $2,500 |
| Non-compliance | $250 per violation |
| Brand damages on early termination | Lost royalty and brand fund for up to 36 months |
The technology fee is itemized: IT systems $220, Paytronix $124, operations systems $158, security and Office 365 $100, CrunchTime $203, NCR $330 and Cartwheel $30 a month. That is $13,980 a year before digital transaction fees, and Potbelly may increase it on notice.
At the median. On $1,195,243 of sales, the royalty is $71,715, the brand fund $35,857, minimum local marketing $11,952 and fixed tech fees $13,980. Together that is about $133,500 a year, or 11.2% of sales, before the per-transaction digital charge. If the brand fund moves to 4%, add another $11,952.
Brand damages deserve a read before signing. If you terminate early, Note 5 requires a lump sum equal to lost royalties and brand fund contributions for the lesser of the remaining term or 36 months. For a shop open less than 12 months, it is calculated on the average weekly revenue of all Potbelly shops. Our technology fees explainer covers how fixed monthly fees weigh on smaller-volume units.
Item 19 (pages 61 to 66) reports sales for franchised, affiliate and systemwide shops over the 12 fiscal periods ending December 28, 2025. The franchised sample is the 97 shops open the whole year. It excludes 24 that were not: 22 opened during the year and 2 closed. Potbelly states the figures were not audited.
| Segment | Shops | Median | Average | Low | High |
|---|---|---|---|---|---|
| All franchised | 97 | $1,195,243 | $1,344,085 | $601,352 | $4,599,072 |
| Suburban | 60 | $1,177,132 | $1,187,544 | $601,352 | $1,929,996 |
| Central business district | 22 | $1,275,776 | $1,377,260 | $793,190 | $2,404,085 |
| Urban | 8 | $1,201,126 | $1,212,785 | $673,234 | $1,973,550 |
| University | 2 | $984,095 | $984,095 | $947,920 | $1,020,271 |
| Airport | 5 | $3,522,652 | $3,430,686 | $2,127,958 | $4,599,072 |
Only 33 of the 97 (34%) beat the average, which tells you the average is pulled up. The five airport shops average $3,430,686, nearly three times a suburban shop. Remove the two university and five airport shops and the 90 traditional franchised shops average about $1,236,000 by our arithmetic. The suburban median of $1,177,132 is the most relevant figure for a typical new buyer, since 60 of the 97 sit there.
| Year | Franchised shops | Median | Average |
|---|---|---|---|
| 2023 | 76 | $1,171,012 | $1,280,259 |
| 2024 | 78 | $1,198,094 | $1,367,425 |
| 2025 | 97 | $1,195,243 | $1,344,085 |
Flat. The median moved less than $25,000 over two years while the sample grew by 21 shops.
Potbelly’s 337 full-year affiliate shops had a $1,245,773 median and $1,330,806 average in 2025. Across all 434 traditional and non-traditional shops in the system table, the median was $1,227,669. Sorted by volume:
| 2025 systemwide band | Shops | Median |
|---|---|---|
| Over $1.5 million | 119 | $1,728,361 |
| $1.0 to $1.5 million | 217 | $1,207,752 |
| $500,000 to $1.0 million | 98 | $883,224 |
| Under $500,000 | 0 | n/a |
What Item 19 promises and does not show. Its opening paragraph says it provides “actual average and median annual Gross Sales, operating expenses, and profits” for certain affiliate shops. The tables as printed report unit volumes only. There is no cost or profit table in the 2026 document on file. Ask Potbelly for the affiliate operating statement the introduction describes.
A rough ratio. The $1,195,243 median is about 1.9 times the low-end build and 1.2 times the high end. Without cost data, that is a sales-to-investment ratio, not a return. See Item 19 explained for why the sample definition matters.
Compare Potbelly’s financial disclosures
Item 20 (pages 67 to 74) reports year-end counts as of December 31.
| Outlet type | Start of 2023 | End of 2023 | End of 2024 | End of 2025 |
|---|---|---|---|---|
| Franchised | 45 | 80 | 102 | 122 |
| Affiliate-owned | 384 | 345 | 342 | 348 |
| Total | 429 | 425 | 444 | 470 |
| Year | Franchised opened | Franchised terminated | Affiliate shops sold to franchisees | Affiliate closed | Affiliate opened |
|---|---|---|---|---|---|
| 2023 | 39 | 4 | 33 | 7 | 1 |
| 2024 | 24 | 2 | 5 | 3 | 5 |
| 2025 | 22 | 2 | 1 | 2 | 9 |
Two things stand out. First, much of the 2023 franchised growth was refranchising: the affiliate sold 33 shops to franchisees that year, and franchised openings in Maryland (12), New York (9) and Washington (11) arrived in blocks. By 2025 the growth is organic, 22 openings with one shop sold. Second, there were zero franchisee-to-franchisee transfers in 2023, 2024 or 2025. In a young franchised base, that is a good sign: nobody sold out.
Terminations are low (8 over three years, including 2 in Virginia in 2025), and the totals row shows no non-renewals in any of the three years. The franchised base is spread thin: Florida (17), Maryland (13), North Carolina (13), New York (12) and Texas (9) lead.
The pipeline. Item 20 lists 40 franchise agreements signed but not opened and projects 55 franchised and 3 affiliate openings in the next fiscal year, with Texas the largest at 10 signed and 9 projected. Potbelly also says no current or former franchisees signed confidentiality clauses in the last three years, so every franchisee in Exhibit J-1 is free to talk.
Item 1 (pages 1 and 2) explains that RaceTrac, Inc. acquired Potbelly Corporation on October 23, 2025, and that the franchisor’s new parent is Hero Franchising Inc. in Atlanta. Three practical effects show up in the document:
The territory terms did not get more generous. Item 12 grants no exclusive territory and no non-exclusive territory. Potbelly and its affiliates keep the right to open shops anywhere, on any terms. The term is 10 years with one 10-year successor franchise at Potbelly’s option, which requires remodeling to then-current standards “regardless of cost” (Item 17, page 52). Opening typically takes 9 to 12 months from signing (Item 11, page 39), and training is six weeks in a shop for the owner and a general manager, plus a four-day owner course in Chicago.
Potbelly sits in the mid-capital tier of the food and beverage category, between small-box sub shops and larger fast-casual deli concepts.
| Brand | Item 7 range | Item 19 median (2026 FDD) | Basis |
|---|---|---|---|
| Potbelly | $628,938 to $999,371 | $1,195,243 sales | 97 franchised shops, 2025 |
| Firehouse Subs | $405,350 to $1,577,750 | $986,432 annual sales | 704 restaurants |
| Schlotzsky’s | $675,365 to $2,261,500 | $1,084,731 net sales | 201 traditional franchises with drive-thru |
| McAlister’s Deli | $910,175 to $2,575,400 | $1,764,584 net sales | 477 traditional franchises |
Potbelly’s median beats Firehouse and drive-thru Schlotzsky’s at a lower capital ceiling than either, on a smaller sample. McAlister’s posts a higher median but needs a larger box and up to $2.58 million. The fee load is where Potbelly is heavier: 6% royalty plus 3% to 4% brand fund plus 1% local, against a disclosed sales base that has been flat for three years. Our best sandwich franchises ranking covers the full field, the Firehouse Subs Item 19 breakdown shows a disclosure with EBITDA by sales band, and the Jersey Mike’s and Subway cost breakdowns cover the largest sub chains.
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About this analysis The franchise data in this article is drawn from VetMyFranchise's structured analysis of 2,300+ Franchise Disclosure Documents filed with U.S. state regulators. See our data & methodology.
Item 7 of the 2026 Potbelly FDD estimates $628,938 to $999,371 for one shop, including the franchise fee. The largest lines are leasehold improvements at $329,727 to $435,090 and furniture, fixtures and equipment at $197,507 to $268,315. Rent is not included; Note 3 estimates $35 to $50 per square foot.
The initial franchise fee is $40,000, paid in full when you sign the Franchise Agreement (Item 5). In fiscal 2025 Potbelly collected initial fees of $10,000 to $40,000. Under the 50/50 Incentive Program, shops opened early or on time in 2026 and 2027 under a Shop Development Area Agreement pay $20,000.
The royalty is 6% of weekly Total Revenue, paid every Wednesday. You also pay a 3% brand fund contribution, which Potbelly can raise to 4% on 90 days' notice, and must spend at least 1% locally. Total required marketing is capped at 5% of Total Revenue. Shops in non-traditional venues may pay a negotiated royalty that Potbelly does not expect to exceed 10%.
Per Item 19 of the 2026 FDD, the 97 franchised shops open for all 12 fiscal periods of 2025 had median sales of $1,195,243 and average sales of $1,344,085, ranging from $601,352 to $4,599,072. Suburban franchised shops had a $1,177,132 median. The FDD discloses sales only, not franchisee profit.
Item 20 reports 470 shops at December 31, 2025: 122 franchised and 348 owned by affiliates. Franchised shops have grown from 45 at the start of 2023, partly through 39 company shops sold to franchisees in 2023 to 2025.
RaceTrac, Inc. acquired Potbelly Corporation on October 23, 2025. The franchisor, Potbelly Franchising, LLC, is now a subsidiary of Hero Franchising Inc., a RaceTrac affiliate based in Atlanta. Item 1 also discloses RaceTrac's Raceway, RaceTrac and Gulf franchising affiliates.
No. Item 12 states you receive no exclusive territory and no non-exclusive territory of any kind. Potbelly and its affiliates may open shops anywhere, including next to yours.
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