Potbelly (PBPB) 10-Q 5 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 28, 2015	Jul. 31, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 28, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Trading Symbol	PBPB
Entity Registrant Name	Potbelly Corporation
Entity Central Index Key	1,195,734
Current Fiscal Year End Date	--12-27
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		30,213,562

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 28, 2015	Dec. 28, 2014
Current assets
Cash and cash equivalents	$ 54,105	$ 63,005
Accounts receivable, net of allowances of $43 and $19 as of June 28, 2015 and December 28, 2014, respectively	5,034	4,016
Inventories	2,820	2,768
Deferred income taxes, current	541	507
Prepaid expenses and other current assets	8,529	9,922
Total current assets	71,029	80,218
Property and equipment, net	92,615	85,704
Indefinite-lived intangible assets	3,404	3,404
Goodwill	1,428	1,428
Deferred income taxes, non-current	17,860	17,860
Deferred expenses, net and other assets	3,673	3,333
Total assets	190,009	191,947
Current liabilities
Accounts payable	2,228	3,301
Accrued expenses	19,694	16,349
Accrued income taxes	100	226
Current portion of long-term debt		1,008
Total current liabilities	22,022	20,884
Deferred rent and landlord allowances	15,781	14,012
Other long-term liabilities	699	726
Total liabilities	38,502	35,622
Equity
Common stock, $0.01 par value-authorized, 200,000,000 shares; outstanding 28,371,178 and 28,934,700 shares as of June 28, 2015, and December 28, 2014, respectively	301	298
Warrants	909	909
Additional paid-in-capital	396,385	391,972
Treasury stock, held at cost, 1,749,406 and 827,090 shares as of June 28, 2015, and December 28, 2014, respectively	(22,792)	(10,246)
Accumulated deficit	(223,882)	(226,874)
Total stockholders' equity	150,921	156,059
Non-controlling interest	586	266
Total equity	151,507	156,325
Total liabilities and equity	$ 190,009	$ 191,947

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 28, 2015	Dec. 28, 2014
Condensed Consolidated Balance Sheet [Abstract]
Allowances on accounts receivable	$ 43	$ 19
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	200,000,000	200,000,000
Common stock, outstanding	28,371,178	28,934,700
Treasury stock, shares	1,749,406	827,090

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Revenues
Sandwich shop sales, net	$ 95,566	$ 83,268	$ 180,963	$ 156,791
Franchise royalties and fees	383	352	754	710
Total revenues	95,949	83,620	181,717	157,501
Sandwich shop operating expenses
Cost of goods sold, excluding depreciation	27,253	23,936	51,598	45,022
Labor and related expenses	27,152	23,405	51,752	44,865
Occupancy expenses	11,539	10,183	22,886	20,162
Other operating expenses	9,970	8,691	19,627	16,849
General and administrative expenses	9,643	8,865	18,474	16,687
Depreciation expense	5,288	4,784	10,439	9,501
Pre-opening costs	536	273	1,077	525
Impairment and loss on disposal of property and equipment	484	29	832	877
Total expenses	91,865	80,166	176,685	154,488
Income from operations	4,084	3,454	5,032	3,013
Interest expense	63	40	124	82
Income before income taxes	4,021	3,414	4,908	2,931
Income tax expense	1,563	1,407	1,914	1,216
Net income	2,458	2,007	2,994	1,715
Net (loss) income attributable to non-controlling interest	(3)	(3)	2	6
Net income attributable to Potbelly Corporation	$ 2,461	$ 2,010	$ 2,992	$ 1,709
Net income per common share attributable to common stockholders:
Basic	$ 0.09	$ 0.07	$ 0.10	$ 0.06
Diluted	$ 0.08	$ 0.07	$ 0.10	$ 0.06
Weighted average shares outstanding:
Basic	28,594,712	29,342,528	28,749,898	29,246,676
Diluted	29,364,689	30,509,553	29,520,163	30,642,892

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Warrants [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Non Controlling Interest [Member]
Beginning Balance at Dec. 29, 2013	$ 153,273	$ 291		$ 909	$ 383,077	$ (231,232)	$ 228
Beginning Balance, Common Shares at Dec. 29, 2013		29,148,029
Net income	1,715					1,709	6
Issuance of unrestricted common stock	400				400
Issuance of unrestricted common stock, Shares		25,663
Exercise of stock options	2,628	$ 4			2,624
Exercise of stock options, Shares		297,002
Capital distribution to non-controlling interest	(26)						(26)
Amortization of stock-based compensation	1,041				1,041
Ending Balance at Jun. 29, 2014	159,031	$ 295		909	387,142	(229,523)	208
Ending Balance, Common Shares at Jun. 29, 2014		29,470,694
Beginning Balance at Dec. 28, 2014	$ 156,325	$ 298	$ (10,246)	909	391,972	(226,874)	266
Beginning Balance, Common Shares at Dec. 28, 2014	28,934,700	28,934,700
Net income	$ 2,994					2,992	2
Exercise of stock options	$ 3,065	$ 3			3,062
Exercise of stock options, Shares	359,000	358,794
Excess tax benefits associated with exercise of stock options	$ 224				224
Repurchases of common stock	$ (12,546)		(12,546)
Repurchases of common stock, Shares	(922,316)	(922,316)
Capital distribution to non-controlling interest	$ (8)						(8)
Contributions from non-controlling interest	326						326
Amortization of stock-based compensation	1,127				1,127
Ending Balance at Jun. 28, 2015	$ 151,507	$ 301	$ (22,792)	$ 909	$ 396,385	$ (223,882)	$ 586
Ending Balance, Common Shares at Jun. 28, 2015	28,371,178	28,371,178

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 2,994	$ 1,715
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	10,439	9,501
Deferred income tax	190	121
Deferred rent and landlord allowances	1,769	723
Amortization of stock compensation expense	1,127	1,441
Excess tax benefit from stock-based compensation	(224)
Asset impairment, store closure and disposal of property and equipment	887	877
Amortization of debt issuance costs	35	35
Changes in operating assets and liabilities:
Accounts receivable, net	(1,018)	(958)
Inventories	(52)	(90)
Prepaid expenses and other assets	904	(2,035)
Accounts payable	(730)	1,351
Accrued and other liabilities	2,641	(910)
Net cash provided by operating activities	18,962	11,771
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(17,901)	(13,386)
Net cash (used in) investing activities	(17,901)	(13,386)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on note payable	(1,022)	(42)
Proceeds from exercise of stock options	3,743	3,337
Payment of payroll taxes related to stock-based compensation awards	(678)	(709)
Treasury stock repurchase	(12,546)
Excess tax benefit from stock-based compensation	224
Contributions from non-controlling interest	326
Distribution to non-controlling interest	(8)	(26)
Net cash (used in) provided by financing activities	(9,961)	2,560
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(8,900)	945
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	63,005	69,579
CASH AND CASH EQUIVALENTS AT END OF PERIOD	54,105	70,524
Supplemental cash flow information:
Income taxes paid	230	700
Interest paid	114	84
Supplemental non-cash investing and financing activities:
Unpaid liability for purchases of property and equipment	$ 2,931	$ 2,424

Organization and Other Matters

Organization and Other Matters	6 Months Ended
	Jun. 28, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Other Matters	(1) Organization and Other Matters Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly-owned subsidiaries, operates Potbelly Sandwich Works sandwich shops in 27 states and the District of Columbia. As of June 28, 2015 and June 29, 2014, the Company had 349 and 312 company-operated shops, respectively. During the 26 weeks ended June 28, 2015, the Company opened 17 new company-operated shops and closed 2 shops. During the 26 weeks ended June 29, 2014, the Company opened 16 new company-operated shops and closed no shops. The Company also sells and administers franchises of Potbelly Sandwich Works sandwich shops. The first domestic and international franchise locations administered by the Company opened during February 2011. As of June 28, 2015, 17 franchised shops were in operation domestically and 12 franchised shops were in operation internationally. During the 26 weeks ended June 28, 2015, the Company opened one franchised shop and closed one franchised shop. During the 26 weeks ended June 29, 2014, the Company opened three franchised shops and closed no franchised shops. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2014. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of June 28, 2015 and December 28, 2014, its statement of operations for the 13 and 26 weeks ended June 28, 2015 and June 29, 2014 and its statement of cash flows for the 26 weeks ended June 28, 2015 and June 29, 2014 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income (loss) recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income (loss) in its consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works LLC (“LLC”) and 17 of LLC’s wholly owned subsidiaries and the LLC’s 4 joint ventures, collectively, the “Company.” All significant intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the 4 joint venture investments. The Company has ownership interests ranging from 65-80% in these consolidated joint ventures. Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal years 2015 and 2014 each consist of 52 weeks. The fiscal quarters ended June 28, 2015 and June 29, 2014 each consisted of 13 weeks. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, primarily related to the long-lived assets and income taxes, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. New and Revised Financial Accounting Standards We qualify as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, enacted on April 5, 2012. Section 102 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period is irrevocable. In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” The pronouncement changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Pursuant to ASU 2014-08, only disposals representing a strategic shift, such as a major line of business, a major geographical area or a major equity investment, which were not expected to have continuing cash flows should be presented as a discontinued operation. If the disposal does qualify as a discontinued operation under ASU 2014-08, the entity will be required to provide expanded disclosures. ASU 2014-08 is effective for fiscal and interim periods beginning on or after December 15, 2014. Early adoption is permitted. The adoption of ASU 2014-08 is not expected to have a significant impact on our consolidated financial statements or disclosures. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and IFRS. The FASB has approved a one-year deferral of the effective date of ASU 2014-09, such that it will become effective for the annual period ending after December 15, 2017. We are evaluating the expected adoption method of ASU 2014-09 and the adoption is not expected to have a significant impact on our consolidated balance sheet or consolidated statement of operations. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The pronouncement requires our management to evaluate whether there is substantial doubt about our ability to continue as a going concern. The pronouncement is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated balance sheet or consolidated statement of operations.

Fair Value Measurement

Fair Value Measurement	6 Months Ended
	Jun. 28, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurement	(2) Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. The Company assesses potential impairments to its long-lived assets, which includes property and equipment, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. After performing a periodic review of our shops during the first and second fiscal quarter of 2015, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance of shop profitability. We performed an impairment analysis related to these shops and recorded impairment charges of $0.3 million and $0.6 million for the 13 weeks and 26 weeks ended June 28, 2015, respectively, related to the excess of the carrying amounts recorded on our balance sheet over the identified shops’ estimated fair values. The fair value of the shop assets was determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In fiscal 2014, the Company established a non-qualified deferred compensation plan, “Potbelly Non-Qualified Deferred Compensation Plan,” which allows highly compensated employees to defer a portion of their base salary and variable compensation each plan year. The Company maintains a rabbi trust to fund obligations under the deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds. The investments in the rabbi trust are designated as trading securities and carried at fair value. Fair market value of investments in the rabbi trust is measured using Level 1 inputs (quoted prices for identical assets in active markets). As of June 28, 2015, the fair value of the investments in the rabbi trust was $71 thousand, which is included in other assets in the condensed consolidated balance sheet. The associated liability is recorded within other long-term liabilities in the condensed consolidated balance sheet. The Company records trading gains and losses in general and administrative expenses in the condensed consolidated statement of operations, along with the offsetting amount related to the increase or decrease in deferred compensation to reflect its exposure to liabilities for payment under the deferred plan. For the three months ended June 28, 2015, the Company recorded an immaterial amount of unrealized losses on investments held in the rabbi trust.

Earnings per Share

Earnings per Share	6 Months Ended
	Jun. 28, 2015
Earnings Per Share [Abstract]
Earnings per Share	(3) Earnings per share Basic and diluted income (loss) per share are calculated using the weighted average number of shares outstanding for the period as follows: For the 13 Weeks Ended For the 26 Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Net income attributable to Potbelly Corporation $ 2,461 $ 2,010 $ 2,992 $ 1,709 Weighted average common shares outstanding-basic 28,594,712 29,342,528 28,749,898 29,246,676 Plus: Effect of potential stock options exercise 708,271 1,046,198 709,276 1,258,203 Plus: Effect of potential warrant exercise 61,706 120,827 60,989 138,013 Weighted average common shares outstanding-diluted 29,364,689 30,509,553 29,520,163 30,642,892 Income per share available to common stockholders-basic $ 0.09 $ 0.07 $ 0.10 $ 0.06 Income per share available to common stockholders-diluted $ 0.08 $ 0.07 $ 0.10 $ 0.06 Potentially dilutive shares that are considered anti-dilutive: Common share options 491,494 242,636 609,084 242,636 Warrants — — — —

Income Taxes

Income Taxes	6 Months Ended
	Jun. 28, 2015
Income Tax Disclosure [Abstract]
Income Taxes	(4) Income Taxes The Company recognized income tax expense of $1.9 million on pre-tax income of $4.9 million, or an effective tax rate of 39.0%, for the 26 weeks ended June 28, 2015, compared to income tax expense of $1.2 million on pre-tax income of $2.9 million, or an effective tax rate of 41.5%, for the 26 weeks ended June 29, 2014. The difference between the statutory rate and the effective tax rate is primarily attributable to state income taxes offset by certain federal and state tax credits.

Capital Stock

Capital Stock	6 Months Ended
	Jun. 28, 2015
Equity [Abstract]
Capital Stock	(5) Capital Stock On August 1, 2014, the Company’s Board of Directors authorized a share repurchase program of up to $35.0 million of the Company’s common stock. Under this program, the Company may, from time to time, purchase shares in the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions. During the 26 weeks ended June 28, 2015, the Company repurchased 922,316 shares of its common stock for approximately $12.5 million in open market transactions. As of June 28, 2015, the remaining dollar value of authorization under the share repurchase program was $12.2 million. Repurchased shares are included as treasury stock in the condensed consolidated balance sheets and the condensed consolidated statement of equity.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 28, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	(6) Stock-Based Compensation Throughout the 26 weeks ending June 28, 2015, the Company issued 498,479 stock options under the 2013 Long-Term Incentive Plan to eligible employees and key executives. The fair value of the options was determined using the Black-Scholes option pricing model. The weighted average fair value of options granted during the 26 weeks ended June 28, 2015 was $6.65 per share, as estimated using the following weighted average assumptions: expected life of options – seven years; volatility- 45.47%; risk-free interest rate – 1.90%; and dividend yield – 0.00%. The Company used the simplified method for determining the expected life of the options. Due to the lack of historical data as a newly public company, the Company calculated the specific stock price volatility using a blended volatility rate based on comparable publicly traded companies. A summary of activity for the 26 weeks ended June 28, 2015 is as follows: Options Shares Weighted Aggregate Weighted Outstanding—December 28, 2014 4,613 $ 10.10 $ 12,731 5.62 Granted 498 13.59 Exercised (359 ) 8.54 Canceled (141 ) 14.18 Outstanding—June 28, 2015 4,611 10.47 $ 12,653 5.61 Exercisable—June 28, 2015 3,337 6.79 $ 11,549 3.19 In accordance with ASC Topic 718, Compensation—Stock Compensation In May 2015, the Company issued 30,856 shares of restricted stock units (“RSUs”) to certain non-employee members of its Board of Directors. The RSUs had a grant-date share price of $14.26 upon issuance and have a vesting schedule of 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. The Company recorded an immaterial amount of stock-based compensation expense related to the issuance of the RSUs.

Organization and Other Matters

Organization and Other Matters (Policies)	6 Months Ended
	Jun. 28, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business	Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly-owned subsidiaries, operates Potbelly Sandwich Works sandwich shops in 27 states and the District of Columbia. As of June 28, 2015 and June 29, 2014, the Company had 349 and 312 company-operated shops, respectively. During the 26 weeks ended June 28, 2015, the Company opened 17 new company-operated shops and closed 2 shops. During the 26 weeks ended June 29, 2014, the Company opened 16 new company-operated shops and closed no shops. The Company also sells and administers franchises of Potbelly Sandwich Works sandwich shops. The first domestic and international franchise locations administered by the Company opened during February 2011. As of June 28, 2015, 17 franchised shops were in operation domestically and 12 franchised shops were in operation internationally. During the 26 weeks ended June 28, 2015, the Company opened one franchised shop and closed one franchised shop. During the 26 weeks ended June 29, 2014, the Company opened three franchised shops and closed no franchised shops.
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2014. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of June 28, 2015 and December 28, 2014, its statement of operations for the 13 and 26 weeks ended June 28, 2015 and June 29, 2014 and its statement of cash flows for the 26 weeks ended June 28, 2015 and June 29, 2014 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income (loss) recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income (loss) in its consolidated financial statements.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works LLC (“LLC”) and 17 of LLC’s wholly owned subsidiaries and the LLC’s 4 joint ventures, collectively, the “Company.” All significant intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the 4 joint venture investments. The Company has ownership interests ranging from 65-80% in these consolidated joint ventures.
Fiscal Year	Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal years 2015 and 2014 each consist of 52 weeks. The fiscal quarters ended June 28, 2015 and June 29, 2014 each consisted of 13 weeks.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, primarily related to the long-lived assets and income taxes, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
New and Revised Financial Accounting Standards	New and Revised Financial Accounting Standards We qualify as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, enacted on April 5, 2012. Section 102 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period is irrevocable. In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” The pronouncement changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Pursuant to ASU 2014-08, only disposals representing a strategic shift, such as a major line of business, a major geographical area or a major equity investment, which were not expected to have continuing cash flows should be presented as a discontinued operation. If the disposal does qualify as a discontinued operation under ASU 2014-08, the entity will be required to provide expanded disclosures. ASU 2014-08 is effective for fiscal and interim periods beginning on or after December 15, 2014. Early adoption is permitted. The adoption of ASU 2014-08 is not expected to have a significant impact on our consolidated financial statements or disclosures. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and IFRS. The FASB has approved a one-year deferral of the effective date of ASU 2014-09, such that it will become effective for the annual period ending after December 15, 2017. We are evaluating the expected adoption method of ASU 2014-09 and the adoption is not expected to have a significant impact on our consolidated balance sheet or consolidated statement of operations. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The pronouncement requires our management to evaluate whether there is substantial doubt about our ability to continue as a going concern. The pronouncement is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated balance sheet or consolidated statement of operations.

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 28, 2015
Earnings Per Share [Abstract]
Schedule of the Calculation of Weighted Average Shares Outstanding for Basic and Diluted Earnings per Share	Basic and diluted income (loss) per share are calculated using the weighted average number of shares outstanding for the period as follows: For the 13 Weeks Ended For the 26 Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Net income attributable to Potbelly Corporation $ 2,461 $ 2,010 $ 2,992 $ 1,709 Weighted average common shares outstanding-basic 28,594,712 29,342,528 28,749,898 29,246,676 Plus: Effect of potential stock options exercise 708,271 1,046,198 709,276 1,258,203 Plus: Effect of potential warrant exercise 61,706 120,827 60,989 138,013 Weighted average common shares outstanding-diluted 29,364,689 30,509,553 29,520,163 30,642,892 Income per share available to common stockholders-basic $ 0.09 $ 0.07 $ 0.10 $ 0.06 Income per share available to common stockholders-diluted $ 0.08 $ 0.07 $ 0.10 $ 0.06 Potentially dilutive shares that are considered anti-dilutive: Common share options 491,494 242,636 609,084 242,636 Warrants — — — —

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 28, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Activity Under Plans and Agreement	A summary of activity for the 26 weeks ended June 28, 2015 is as follows: Options Shares Weighted Aggregate Weighted Outstanding—December 28, 2014 4,613 $ 10.10 $ 12,731 5.62 Granted 498 13.59 Exercised (359 ) 8.54 Canceled (141 ) 14.18 Outstanding—June 28, 2015 4,611 10.47 $ 12,653 5.61 Exercisable—June 28, 2015 3,337 6.79 $ 11,549 3.19

Organization and Other Matter16

Organization and Other Matters - Additional Information (Detail)	6 Months Ended
	Jun. 28, 2015StoreStateJointVentureSubsidiaries	Jun. 29, 2014Store
Nature Of Business And Basis Of Presentation [Line Items]
Number of sandwich works and shops operation states | State	27
Number of wholly owned subsidiaries | Subsidiaries	17
Number of joint ventures | JointVenture	4
Minimum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Ownership interest rate	65.00%
Maximum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Ownership interest rate	80.00%
Company Operated Shops [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops	349	312
Number of closed stores	2	0
Company Operated Shops [Member] | New Shops [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops	17	16
Franchised Shops [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of closed stores	1	0
Franchised Shops [Member] | New Shops [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops	1	3
Franchised Shops [Member] | Domestic Operations [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops	17
Franchised Shops [Member] | International [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops	12

Fair Value Measurement - Additi

Fair Value Measurement - Additional Information (Detail) - Jun. 28, 2015 - USD ($) $ in Thousands	Total	Total
Fair Value Disclosures [Abstract]
Impairment charges	$ 300	$ 600
Fair value of investments in rabbi trust	$ 71	$ 71

Earnings Per Share - Schedule o

Earnings Per Share - Schedule of the Calculation of Weighted Average Shares Outstanding for Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income attributable to Potbelly Corporation	$ 2,461	$ 2,010	$ 2,992	$ 1,709
Weighted average common shares outstanding-basic	28,594,712	29,342,528	28,749,898	29,246,676
Plus: Effect of potential stock options exercise	708,271	1,046,198	709,276	1,258,203
Plus: Effect of potential warrant exercise	61,706	120,827	60,989	138,013
Weighted average common shares outstanding-diluted	29,364,689	30,509,553	29,520,163	30,642,892
Income per share available to common stockholders-basic	$ 0.09	$ 0.07	$ 0.10	$ 0.06
Income per share available to common stockholders-diluted	$ 0.08	$ 0.07	$ 0.10	$ 0.06
Common Share Options [Member]
Potentially dilutive shares that are considered anti-dilutive:
Potentially dilutive shares that are considered anti-dilutive	491,494	242,636	609,084	242,636
Warrants [Member]
Potentially dilutive shares that are considered anti-dilutive:
Potentially dilutive shares that are considered anti-dilutive	0	0	0	0

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Income Tax Disclosure [Abstract]
Income tax expense	$ 1,563	$ 1,407	$ 1,914	$ 1,216
Income before income taxes	$ 4,021	$ 3,414	$ 4,908	$ 2,931
Effective tax rate			39.00%	41.50%

Capital Stock - Additional Info

Capital Stock - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 28, 2015	Aug. 01, 2014
Equity [Abstract]
Stock repurchase program, authorized amount		$ 35,000,000
Common stock shares repurchased	922,316
Repurchases of common stock	$ 12,546,000
Remaining dollar value of authorization under the share repurchase program	$ 12,200,000

Stock Based Compensation - Addi

Stock Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	May. 31, 2015	May. 31, 2014	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options issued					498,000
Weighted average common stock fair value					$ 13.59
Recognized stock-based compensation expense			$ 600	$ 1,000	$ 1,127	$ 1,441
Unrecognized stock compensation expense			$ 7,200		$ 7,200
Unrecognized stock compensation expense, recognition period					Through 2,019
Unrestricted Common Stock Granted [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized stock-based compensation expense		$ 400
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units issued	30,856
Grant-date share price	$ 14.26
Restricted Stock Units (RSUs) [Member] | First Anniversary [Member] | Non-Employee Board Of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Restricted Stock Units (RSUs) [Member] | Second Anniversary [Member] | Non-Employee Board Of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
2013 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options issued					498,479
Weighted average common stock fair value					$ 6.65
Expected life of options					7 years
Volatility					45.47%
Risk-free interest rate					1.90%
Dividend yield					0.00%
Method used to determine fair value of the options					Black-Scholes option pricing model

Stock Based Compensation - Summ

Stock Based Compensation - Summary of Activity Under Plans and Agreement (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 28, 2015	Dec. 28, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Outstanding shares, Beginning balance	4,613
Options Outstanding shares, Granted	498
Options Outstanding shares, Exercised	(359)
Options Outstanding shares, Canceled	(141)
Options Outstanding shares, Ending balance	4,611	4,613
Options Outstanding shares, Exercisable	3,337
Options outstanding weighted average exercise price, Granted	$ 13.59
Options outstanding weighted average exercise price, Exercised	8.54
Options outstanding weighted average exercise price, Canceled	14.18
Options outstanding weighted average exercise price, Ending balance	10.47	$ 10.10
Options outstanding weighted average exercise price, Exercisable	$ 6.79
Options Outstanding Aggregate Intrinsic value	$ 12,653	$ 12,731
Options Exercisable Aggregate Intrinsic Value	$ 11,549
Option Outstanding Weighted Average Remaining Term	5 years 7 months 10 days	5 years 7 months 13 days
Options Exercisable Weighted Average Remaining Term	3 years 2 months 9 days