What was the loss (gain) on extinguishment of debt for Potbelly Sandwich Works in 2022?
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: |
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 company experienced a gain on extinguishment of debt of $10,191,000 in fiscal year 2022. This figure is part of the consolidated statements of operations, which detail the revenues, expenses, and income of Potbelly Corporation and its subsidiaries.
The gain on extinguishment of debt represents a financial benefit that Potbelly Sandwich Works realized when it settled its debt for less than the outstanding amount. This can occur through various methods, such as debt refinancing or debt forgiveness. For potential franchisees, this indicates that Potbelly Sandwich Works has been actively managing its debt obligations, which can improve its overall financial health.
It's important to note that while a gain on extinguishment of debt is generally positive, it is a non-recurring event. Prospective franchisees should consider this within the broader context of Potbelly Sandwich Works's financial performance, including revenue trends, operating expenses, and overall profitability, to gain a comprehensive understanding of the company's financial stability and growth potential.