Potbelly acquired by convenience store chain RaceTrac for $566 million

"Sandwich maker Potbelly is being acquired by the gas station and convenience store chain RaceTrac for $566 million. Potbelly, which was founded in Chicago in 1977, has 445 restaurants across the U.S. company said the deal with RaceTrac will help it reach its goal of quadrupling in size to 2,000 locations. Potbelly stores are both company- and franchise-owned."

""With RaceTrac's resources, we will unlock new opportunity for this incredible brand while staying true to the neighborhood sandwich shop experience that makes Potbelly special," Potbelly CEO Bob Wright said in a statement Wednesday."

"Sandwich chains and restaurants have struggled in recent years, starting with the pandemic that had millions eating at home when they would usually have dined out. Yet Potbelly's profits have been rising and growth in its franchised businesses has been strong. Now it is inflation that is hitting restaurants hard as they pay more for ingredients and customers tighten their belts. At the same time, national chains are being pressured to lower prices with lower-income customers pulling back on spending and sticking to essentials."

RaceTrac will acquire Potbelly for $566 million. Potbelly has 445 U.S. restaurants and both company-owned and franchised locations. The deal is positioned to support an expansion goal of roughly 2,000 locations. Potbelly shares rose more than 31% to $17 on the news. The sandwich chain has seen rising profits and strong franchised growth despite pandemic-related restaurant challenges. Restaurants face new pressure from inflation-driven higher ingredient costs and constrained consumer spending, prompting some national chains to lower menu prices. RaceTrac is a family-owned Atlanta-based chain operating more than 800 locations in 14 states.

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