What was the noncash lease expense for Potbelly Sandwich Works in 2024?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
ntal income | $ 5,433 | $ | 2,945 | We incurred $5.4 million and $3.0 million in expenses during fiscal years 2024 and 2023, respectively, associated with these leases, which are included in franchise support, rent and marketing expenses in the consolidated statement of operations from the inception of the related sublease agreements.
Future expected fixed sublease payments from franchisees to Potbelly w
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' 2025 Franchise Disclosure Document, the company incurred $5.4 million in expenses associated with leases during fiscal year 2024. In 2023, these expenses were $3.0 million. These lease-related expenses are included within franchise support, rent, and marketing expenses in the consolidated statement of operations from when the sublease agreements began.
For a prospective franchisee, this indicates that Potbelly Sandwich Works has significant lease obligations that are factored into their franchise support, rent, and marketing expenses. The increase from $3.0 million in 2023 to $5.4 million in 2024 suggests a growing reliance on subleases or an expansion of leased properties. This could reflect Potbelly's strategy in managing real estate and subleasing to franchisees.
It's important for potential franchisees to understand how these lease expenses are allocated and how they might affect the overall cost structure of their franchise. The FDD also mentions future expected fixed sublease payments from franchisees to Potbelly as of December 29, 2024, which would be a crucial detail for franchisees to consider in their financial planning. Understanding the terms and conditions of these subleases is essential for assessing the financial viability of a Potbelly Sandwich Works franchise.