Potbelly (PBPB) The 44th Annual William Blair Growth Stock Conference summary

Business momentum and brand foundation

• Significant improvement in average unit volumes and unit-level margins since 2020, driven by new leadership and strategic focus.

• The brand has a 47-year history, 427 locations nationwide, and a proven ability to succeed in diverse markets.

• Emphasis on a differentiated, craveable menu and inviting atmosphere as core brand strengths.

• Management team brings deep restaurant and franchise experience from major industry players.

• Five-pillar strategy centers on customer experience, digital engagement, and franchise-focused development.

Financial performance and growth outlook

• Same-store sales showed strong growth post-COVID, with system-wide sales expected to accelerate as franchise units ramp up.

• Transitioning from 85% company-owned to 85% franchise units over several years to drive growth.

• Margin expansion achieved, with increased marketing spend still below industry average, providing room for further investment.

• Guidance for 2024 remains at 0%-2% same-store sales growth and $7M-$8.5M adjusted EBITDA.

• Long-term targets include low- to mid-single-digit same-store sales growth and double-digit unit growth.

Franchise development and operational innovation

• Organization reengineered to be franchise growth-centric, with dedicated leaders for franchising and development.

• Franchisees benefit from a strong economic model: $1.3M average unit volume and investment costs as low as $650K.

• New 1,800 sq ft prototype reduces build costs and occupancy expenses, increasing real estate flexibility.

• About half of new builds in 2024 will use the new prototype, supporting expansion in new and existing markets.

• Active pipeline of multi-unit franchisees supports 10%+ unit growth, with 30+ units in the 2024 pipeline.