What net income did Potbelly Sandwich Works have in 2024?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 |
Source: Item 23 — RECEIPTS (FDD pages 79–355)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, the company's net income in 2024 was $41,332. This figure is part of the cash flow statement, which also includes adjustments to reconcile net income to net cash provided by operating activities. These adjustments include depreciation expense, noncash lease expense, deferred income tax, stock-based compensation expense, asset impairment, shop closure and disposal of property and equipment, loss (gain) on Franchise Growth Acceleration Initiative activities, loss (gain) on extinguishment of debt, amortization of debt issuance costs, and changes in operating assets and liabilities.
For a prospective franchisee, understanding the net income and the adjustments made to it provides insight into the financial health and operational efficiency of Potbelly Sandwich Works. A higher net income generally indicates better profitability, while the adjustments offer a more detailed view of the company's cash flow management and accounting practices. Reviewing these figures over the three-year period (2022-2024) can help potential franchisees identify trends and assess the stability of the business.
It's important to note that while net income is a key indicator, it doesn't tell the whole story. Franchisees should also consider other factors such as revenue growth, operating expenses, and debt levels to get a comprehensive understanding of Potbelly Sandwich Works's financial performance. Additionally, prospective franchisees should consult with a financial advisor to interpret these figures in the context of their own investment goals and risk tolerance.
In comparison to other franchises, analyzing the cash flow statement in this level of detail is fairly standard. Potential franchisees should look for consistent profitability and positive cash flow from operating activities as indicators of a healthy franchise system. Significant fluctuations or negative trends should be investigated further to understand the underlying causes and potential risks.