Chicago-based sandwich shop chain Potbelly will be bought for $566 million in an all-cash deal by convenience store retailer RaceTrac, Potbelly announced Wednesday.
“We have positioned Potbelly for accelerated franchise-led growth in recent years, and this transaction fortifies our path while delivering certain and immediate value to our shareholders,” Bob Wright, president and CEO of Potbelly, said in a news release.
Potbelly was founded in a Lincoln Park antiques store in 1977. Today, it has more than 445 company- and franchise-owned shops across the U.S., with a goal of reaching 2,000 locations. Potbelly has more than 5,200 employees.
Atlanta-based RaceTrac will acquire all of the outstanding shares of Potbelly for $17.12 per share. The transaction is expected to close in the fourth quarter, subject to regulatory approvals.
Natalie Morhous, CEO and chairman of the board at RaceTrac, said in a news release, “We are proud of Potbelly’s legacy as a beloved neighborhood sandwich shop and are excited to expand our family of convenience-driven brands.”
In 2023, RaceTrac’s wholly owned wholesale fuel supply and trading subsidiary, Metroplex Energy, bought fuel retailer Gulf Oil for an undisclosed sum.
RaceTrac operates more than 800 convenience stores in 14 states under the RaceTrac and RaceWay brands, as well as about 1,200 Gulf-branded locations. The private family-owned company, founded in 1934, has more than 10,000 employees.
RaceTrac’s purchase of Potbelly takes the restaurant chain private after it became a publicly traded company in 2013.
The sandwich shop chain was hard hit by the COVID-19 pandemic, like many restaurants nationwide. In spring 2020, Potbelly saw a dramatic downturn in business when the pandemic shut down indoor dining and forced many people to work from home.
Wright, former chief operating officer of fast food chain Wendy’s, took over as Potbelly’s CEO in July 2020. By 2022, he returned the sandwich shop to profitability and pivoted to focus on franchises.
Potbelly continues to grow. It opened eight shops and signed 54 more franchise commitments in its fiscal second quarter, the company announced in August.