What was the amortization of debt issuance costs for Potbelly Sandwich Works in 2024?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
n thousands)**
| Fiscal Year | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| Cash flows from operating activities: | ||||||
| Net income | $ 41,332 | $ | 5,577 | $ 4,711 | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Depreciation expense | 12,669 | 12,138 | 11,890 | |||
| Noncash lease expense | 24,317 | 25,814 | 25,792 | |||
| Deferred income tax | (34,091) | — | 18 | |||
| Stock-based compensation expense | 5,728 | 5,450 | 3,265 | |||
| Asset impairment, shop closure and disposal of property and equipment | (136) | 1,058 | 3,651 | |||
| Loss (gain) on Franchise Growth Acceleration Initiative activities | 462 | (2,202) | — | |||
| Loss (gain) on extinguishment of debt | 2,376 | 224 | (10,191) | |||
| Amortization of debt issuance costs | 234 | 482 | 270 | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (1,826) | (1,580) | (387) | |||
| Inventories | (269) | 177 | (499) | |||
| Prepaid expenses and other assets | (1,747) | (3,989) | (520) | |||
| Accounts payable | (622) | (1,025) | 2,239 | |||
| Operating lease liabilities | (27,887) | (30,721) | (27,984) | |||
| Accrued expenses and other liabilities | (877) | 8,086 | 221 | |||
| Net cash provided by operating activities | 19,663 | 19,488 |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–49)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the amortization of debt issuance costs for the fiscal year 2024 was $234. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities.
Amortization of debt issuance costs represents the expense recognized over time as the company uses the funds borrowed. Debt issuance costs are initially capitalized as an asset and then amortized over the life of the debt. This accounting treatment spreads the cost of obtaining financing over the period the debt is outstanding, providing a more accurate picture of the company's financial performance in each reporting period.
For a prospective franchisee, understanding the amortization of debt issuance costs is important because it reflects how Potbelly Sandwich Works manages its debt and finances its operations. While this specific figure may not directly impact the franchisee's day-to-day operations, it provides insight into the financial strategies and overall financial health of the company, which can indirectly affect the support and resources available to franchisees.