Potbelly (PBPB) 10-Q 8 Aug 24 2024 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Jun. 30, 2024	Jul. 28, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-36104
Entity Registrant Name	Potbelly Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-4466837
Entity Address, Address Line One	111 N. Canal Street
Entity Address, Address Line Two	Suite 325
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60606
City Area Code	312
Local Phone Number	951-0600
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	PBPB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,945,387
Entity Central Index Key	0001195734
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-29
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 8,322	$ 33,788
Accounts receivable, net of allowances of $20 and $26 as of June 30, 2024 and December 31, 2023, respectively	8,973	7,960
Inventories	3,353	3,516
Prepaid expenses and other current assets	7,445	7,828
Total current assets	28,093	53,092
Property and equipment, net	46,730	45,087
Right-of-use assets for operating leases	137,199	144,390
Indefinite-lived intangible assets	3,404	3,404
Goodwill	2,053	2,056
Restricted cash	749	749
Deferred tax assets	30,976	0
Deferred expenses, net and other assets	5,406	3,681
Total assets	254,610	252,460
Current liabilities
Accounts payable	9,216	9,927
Accrued expenses	30,149	35,377
Short-term operating lease liabilities	23,539	24,525
Current portion of long-term debt	0	1,250
Total current liabilities	62,904	71,078
Long-term debt, net of current portion	4,000	19,168
Long-term operating lease liabilities	133,222	142,050
Other long-term liabilities	6,782	6,070
Total liabilities	206,908	238,367
Commitments and contingencies (Note 12)
Equity
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 29,944 and 29,364 shares as of June 30, 2024 and December 31, 2023, respectively	397	389
Warrants	1,745	2,219
Additional paid-in-capital	467,550	462,583
Treasury stock, held at cost, 10,354 and 10,077 shares as of June 30, 2024, and December 31, 2023, respectively	(119,538)	(116,701)
Accumulated deficit	(301,852)	(333,797)
Total stockholders’ equity	48,302	14,693
Non-controlling interest	(600)	(600)
Total equity	47,702	14,093
Total liabilities and equity	$ 254,610	$ 252,460

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Accounts receivable, net of allowances	$ 20	$ 26
Common stock (in USD per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	200,000	200,000
Common stock, outstanding (in shares)	29,944	29,364
Treasury stock (in shares)	10,354	10,077

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Revenues
Total revenues	$ 119,697	$ 126,623	$ 230,850	$ 244,893
Sandwich shop operating expenses, excluding depreciation
Food, beverage and packaging costs	31,306	34,903	60,576	67,523
Labor and related expenses	32,313	37,866	64,566	74,368
Occupancy expenses	12,543	13,083	24,257	26,393
Other operating expenses	21,264	20,925	41,093	41,409
Franchise support, rent and marketing expenses	3,001	1,215	5,538	1,806
General and administrative expenses	11,866	11,695	23,413	21,664
Depreciation expense	3,016	2,887	6,027	5,857
Pre-opening costs	96	33	96	55
Loss on Franchise Growth Acceleration Initiative activities	28	14	161	963
Impairment, loss on disposal of property and equipment and shop closures	145	658	886	1,703
Total operating expenses	115,578	123,279	226,613	241,741
Income from operations	4,119	3,344	4,237	3,152
Interest expense, net	181	1,011	545	1,678
Loss on extinguishment of debt	0	0	2,376	239
Income before income taxes	3,938	2,333	1,316	1,235
Income tax expense (benefit)	(30,982)	(48)	(30,931)	57
Net income	34,920	2,381	32,247	1,178
Net income attributable to non-controlling interest	208	165	302	288
Net income attributable to Potbelly Corporation	$ 34,712	$ 2,216	$ 31,945	$ 890
Net income per common share attributable to common stockholders:
Basic (in USD per share)	$ 1.16	$ 0.08	$ 1.07	$ 0.03
Diluted (in USD per share)	$ 1.13	$ 0.07	$ 1.04	$ 0.03
Weighted average shares outstanding:
Basic (in shares)	29,926	29,199	29,903	29,053
Diluted (in shares)	30,714	30,088	30,842	29,776
Sandwich shop sales, net
Revenues
Total revenues	$ 115,536	$ 124,709	$ 223,113	$ 241,656
Franchise royalties, fees and rent income
Revenues
Total revenues	$ 4,161	$ 1,914	$ 7,737	$ 3,237

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Warrants	Additional Paid-In- Capital	Accumulated Deficit	Non- Controlling Interest
Beginning balance (in shares) at Dec. 25, 2022		28,819
Beginning balance at Dec. 25, 2022	$ 4,273	$ 384	$ (115,388)	$ 2,566	$ 455,831	$ (338,916)	$ (204)
Net income (loss)	(1,204)					(1,327)	123
Shares issued under equity compensation plan (in shares)		70
Shares issued under equity compensation plan	(337)	$ 1	(337)		(1)
Proceeds from exercise of warrants (in shares)		159
Proceeds from exercise of warrants	865	$ 1		(313)	1,177
Distributions to non-controlling interest	(152)						(152)
Stock-based compensation expense	911				911
Ending balance (in shares) at Mar. 26, 2023		29,048
Ending balance at Mar. 26, 2023	4,356	$ 386	(115,725)	2,253	457,918	(340,243)	(233)
Beginning balance (in shares) at Dec. 25, 2022		28,819
Beginning balance at Dec. 25, 2022	4,273	$ 384	(115,388)	2,566	455,831	(338,916)	(204)
Net income (loss)	1,178
Ending balance (in shares) at Jun. 25, 2023		29,309
Ending balance at Jun. 25, 2023	7,201	$ 389	(116,497)	2,219	459,351	(338,027)	(234)
Beginning balance (in shares) at Mar. 26, 2023		29,048
Beginning balance at Mar. 26, 2023	4,356	$ 386	(115,725)	2,253	457,918	(340,243)	(233)
Net income (loss)	2,381					2,216	165
Shares issued under equity compensation plan (in shares)		243
Shares issued under equity compensation plan	(771)	$ 3	(772)		(2)
Proceeds from exercise of warrants (in shares)		18
Proceeds from exercise of warrants	96	$ 0		(34)	130
Distributions to non-controlling interest	(166)						(166)
Stock-based compensation expense	1,305				1,305
Ending balance (in shares) at Jun. 25, 2023		29,309
Ending balance at Jun. 25, 2023	$ 7,201	$ 389	(116,497)	2,219	459,351	(338,027)	(234)
Beginning balance (in shares) at Dec. 31, 2023	29,364	29,364
Beginning balance at Dec. 31, 2023	$ 14,093	$ 389	(116,701)	2,219	462,583	(333,797)	(600)
Net income (loss)	(2,673)					(2,767)	94
Shares issued under equity compensation plan (in shares)		81
Shares issued under equity compensation plan	(665)	$ 3	(665)		(3)
Proceeds from exercise of warrants (in shares)		240
Proceeds from exercise of warrants	1,309	$ 2		(474)	1,781
Distributions to non-controlling interest	(179)						(179)
Stock-based compensation expense	1,771				1,771
Ending balance (in shares) at Mar. 31, 2024		29,685
Ending balance at Mar. 31, 2024	$ 13,656	$ 394	(117,366)	1,745	466,132	(336,564)	(685)
Beginning balance (in shares) at Dec. 31, 2023	29,364	29,364
Beginning balance at Dec. 31, 2023	$ 14,093	$ 389	(116,701)	2,219	462,583	(333,797)	(600)
Net income (loss)	$ 32,247
Ending balance (in shares) at Jun. 30, 2024	29,944	29,944
Ending balance at Jun. 30, 2024	$ 47,702	$ 397	(119,538)	1,745	467,550	(301,852)	(600)
Beginning balance (in shares) at Mar. 31, 2024		29,685
Beginning balance at Mar. 31, 2024	13,656	$ 394	(117,366)	1,745	466,132	(336,564)	(685)
Net income (loss)	34,920					34,712	208
Shares issued under equity compensation plan (in shares)		345
Shares issued under equity compensation plan	(1,469)	$ 3	(1,469)		(3)
Distributions to non-controlling interest	(123)						(123)
Stock-based compensation expense	1,421				1,421
Repurchases of common stock (in shares)		(86)
Repurchases of common stock	$ (703)		(703)
Ending balance (in shares) at Jun. 30, 2024	29,944	29,944
Ending balance at Jun. 30, 2024	$ 47,702	$ 397	$ (119,538)	$ 1,745	$ 467,550	$ (301,852)	$ (600)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023
Cash flows from operating activities:
Net income	$ 32,247	$ 1,178
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	6,027	5,857
Noncash lease expense	12,568	12,386
Deferred income tax	(31,251)	(81)
Stock-based compensation expense	3,192	2,216
Asset impairment, loss on disposal of property and equipment and shop closures	463	1,061
Loss on Franchise Growth Acceleration Initiative activities	162	936
Loss on extinguishment of debt	2,376	224
Other operating activities	130	209
Changes in operating assets and liabilities:
Accounts receivable, net	(1,035)	(1,862)
Inventories	169	281
Prepaid expenses and other assets	(900)	(240)
Accounts payable	(522)	(1,222)
Operating lease liabilities	(14,540)	(13,707)
Accrued expenses and other liabilities	(5,236)	4,786
Net cash provided by operating activities:	3,850	12,022
Cash flows from investing activities:
Purchases of property and equipment	(8,687)	(7,281)
Proceeds from sale of refranchised shops and other assets	227	1,362
Net cash used in investing activities:	(8,460)	(5,919)
Cash flows from financing activities:
Payment of debt issuance costs	(623)	(2,204)
Proceeds from exercise of warrants	1,309	961
Employee taxes on certain stock-based payment arrangements	(1,710)	(976)
Distributions to non-controlling interest	(302)	(318)
Principal payments made for Term Loan	0	(625)
Treasury Stock repurchase	(703)	0
Net cash (used in) provided by financing activities:	(20,856)	13,288
Net (decrease) increase in cash and cash equivalents and restricted cash	(25,466)	19,391
Cash and cash equivalents and restricted cash at beginning of period	34,537	15,619
Cash and cash equivalents and restricted cash at end of period	9,071	35,010
Supplemental cash flow information:
Income taxes paid	553	245
Interest paid	493	1,446
Supplemental non-cash investing and financing activities:
Unpaid liability for purchases of property and equipment	803	1,035
Unpaid liability for employee taxes on certain stock-based payment arrangements	424	149
Revolving Credit Facility - WinTrust Bank
Cash flows from financing activities:
Borrowings under Credit Facilities and Term Loan	7,000	0
Repayments of Credit Facilities and Term Loan	(3,000)	0
Term Loan
Cash flows from financing activities:
Borrowings under Credit Facilities and Term Loan	0	25,000
Repayments of Credit Facilities and Term Loan	(22,827)	0
Revolving Credit Facility - JP Morgan
Cash flows from financing activities:
Borrowings under Credit Facilities and Term Loan	0	14,600
Repayments of Credit Facilities and Term Loan	$ 0	$ (23,150)

Organization and Other Matters

Organization and Other Matters	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Other Matters	Organization and Other Matters Business Potbelly Corporation, a Delaware corporation, together with its subsidiaries (collectively referred to as the "Company," "Potbelly," "we," "us" or "our"), owns and operates 345 company-operated shops in the United States as of June 30, 2024. Additionally, Potbelly franchisees operate 84 shops domestically. 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 and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported within. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly; its wholly-owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly-owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly-owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures. Fiscal Year We use 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 year 2024 consists of 52 weeks and fiscal year 2023 consisted of 53 weeks. The year to date periods ended June 30, 2024 and June 25, 2023 each consisted of 26 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standard Board ("FASB") issued guidance to expand annual and interim disclosure requirements for reportable segments, primarily through additional disclosures on segment expenses. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 29, 2024. We do not anticipate the updated standard will have a material impact on our financial statement disclosures. In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 28, 2025. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

Restricted Cash

Restricted Cash	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Restricted Cash	Restricted Cash As of June 30, 2024, we had restricted cash related to funds held in a money market account as collateral for letters of credit to certain lease agreements. The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537

Revenue

Revenue	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Revenue	Revenue We primarily earn revenue at a point in time for sandwich shop sales, which can occur in person at a shop, through our online or app platform, or through a third-party platform. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. We have other revenue generating activities where revenue is generally recognized over time, as outlined below. For the quarter and year to date ended June 30, 2024, revenue recognized from all revenue sources on point in time sales was $119.1 million and $229.7 million, respectively, and revenue recognized from sales over time was $0.6 million and $1.1 million, respectively. For the quarter and year to date ended June 25, 2023, revenue recognized from all revenue sources on point in time sales was $125.8 million and $243.7 million, respectively, and revenue recognized from sales over time was $0.8 million and $1.2 million, respectively. Franchise Royalties and Fees We earn an initial franchise fee, a franchise development agreement fee and ongoing royalty fees and support fees under our franchise agreements. Initial franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement. We record a contract liability for the unearned portion of the initial franchise fees. Franchise development agreement fees represent the exclusivity rights for a geographical area paid by a third party to develop Potbelly shops for a certain period of time. Franchise development agreement fee payments received by us are recorded in the condensed consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Royalty fees and Brand Fund contributions are based on a percentage of sales and are recorded as revenue as they are earned and become receivable from the franchisee. Other support fees, which primarily include fees for software and technology, are recorded as revenue as the fees are earned and the service is provided to the franchise. Revenue from support fees are recognized gross of the related expenses since we are the principal in the arrangement to provide those services. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer ("breakage"), which is recognized as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. We recognize gift card breakage income within sandwich shop sales, net in the condensed consolidated statements of operations. We recognized gift card breakage income of $0.2 million and $0.5 million for the quarter and year to date ended June 30, 2024, respectively. For the quarter and year to date ended June 25, 2023, we recognized gift card breakage income of $0.2 million and $0.4 million, respectively. Loyalty Program We offer a customer loyalty program for customers using the Potbelly Perks application at the point of sale. In January 2024, we enhanced our Potbelly Perks program to provide more reward options and flexibility for members. Under the original program, the customer would earn 10 points for every dollar spent, and the customer would earn a free entrée after earning 1,000 points. Once a customer earned a free entrée, that entrée reward expires after 30 days. Under the enhanced program, Potbelly Perks members will earn 10 or more coins, the equivalent of points under the legacy program, for every dollar they spend. The number of coins earned per dollar is dependent on each member's annual spend with Potbelly. Coins can be redeemed for a variety of items across the Potbelly menu. The coins expire one year after they are earned. The change in program did not have a material impact on our financial statements. We defer revenue associated with the estimated selling price of points and coins earned by Potbelly Perks members towards free entrées as they are earned, and a corresponding deferred revenue liability is established in accrued expenses. The deferral is based on the estimated value of the unredeemed points and rewards. The estimated value and the estimated redemption rates are based on a historical data analysis of loyalty reward redemptions. Estimated breakage is recognized in net shop sandwich sales in the consolidated statement of operations. When points and coins are redeemed, we recognize revenue for the redeemed product and reduce accrued expenses. Contract Liabilities We record current and noncurrent contract liabilities in accrued expenses and other long-term liabilities, respectively, for initial franchise fees, gift cards, and loyalty programs. We have no other contract liabilities or contract assets recorded. The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability Beginning balance as of December 31, 2023 $ 8,028 $ 4,397 Ending balance as of June 30, 2024 8,229 5,701 Increase in contract liability $ 201 $ 1,304 The aggregate value of remaining performance obligations on outstanding contracts was $13.9 million as of June 30, 2024. We expect to recognize revenue related to contract liabilities as follows, which may vary based upon franchise activity as well as gift card and loyalty program redemption patterns: Years Ending Amount 2024 $ 5,752 2025 2,231 2026 869 2027 605 2028 683 Thereafter 3,789 Total revenue recognized $ 13,929 For the quarter and year to date ended June 30, 2024, the amount of revenue recognized related to the December 31, 2023 liability ending balance was $1.9 million and $4.3 million, respectively. For the quarter and year to date ended June 25, 2023, the amount of revenue recognized related to the December 25, 2022 liability ending balance was $0.6 million and $2.0 million, respectively. This revenue is related to the recognition of gift card redemptions and upfront franchise fees. For the quarters ended June 30, 2024 and June 25, 2023, we did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods. Contract Costs Deferred contract costs, which include sales commissions and market planning costs, totaled $1.1 million and $0.9 million as of June 30, 2024 and December 31, 2023, respectively. For the quarter and year to date ended June 30, 2024, amortization expense for deferred costs was $42 thousand and $68 thousand, respectively. For the quarter and year to date ended June 25, 2023, amortization expense for deferred costs was $9 thousand and $36 thousand, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented.

Fair Value Measurement

Fair Value Measurement	6 Months Ended
	Jun. 30, 2024
Fair Value Disclosures [Abstract]
Fair Value Measurement	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. We apply fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. The following table presents information about our financial assets that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: June 30, December 31, Assets - Level 1 Money market funds $ — $ 6,398 Financial assets measured at fair value on recurring basis $ — $ 6,398 The book value of the long-term and short-term debt under the Credit Agreement, which is further discussed in Note 8, was considered to approximate its fair value as of June 30, 2024, as the interest rates are considered in line with current market rates. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the condensed consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. We assess potential impairments to our long-lived assets, which includes property and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets and right-of-use assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. 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 group exceeds the fair value of the asset group. The fair value of the shop assets is 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. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. After performing a periodic review of our shops during the quarter and year to date ended June 30, 2024, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. We performed an impairment analysis related to these shops and recorded impairment charges of $0.4 million and $0.6 million for the quarter and year to date ended June 30, 2024, respectively.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2024
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic and diluted income per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted income per common share attributable to common stockholders is computed by dividing the income allocated to common stockholders by the weighted average number of fully diluted common shares outstanding. In periods of a net loss, no potential common shares are included in diluted shares outstanding as the effect is anti-dilutive. The following table summarizes the earnings per share calculation: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Net income attributable to Potbelly Corporation $ 34,712 $ 2,216 $ 31,945 $ 890 Weighted average common stock outstanding-basic 29,926 29,199 29,903 29,053 Plus: Effect of potentially dilutive stock-based compensation awards 425 467 499 360 Plus: Effect of potential warrant exercise 363 422 440 363 Weighted average common shares outstanding-diluted 30,714 30,088 30,842 29,776 Income per share available to common stockholders-basic $ 1.16 $ 0.08 $ 1.07 $ 0.03 Income per share available to common stockholders-diluted $ 1.13 $ 0.07 $ 1.04 $ 0.03 Potentially dilutive shares that are considered anti-dilutive: Shares 457 433 223 633

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The interim tax provision is determined using an estimated annual effective tax rate and is adjusted for discrete taxable events that occur during the quarter. We regularly assess the need for a valuation allowance related to our deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more likely than not that some or all of our deferred tax assets will not be realized. In our assessment, we consider recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. We recorded a full valuation allowance against our net deferred tax assets during the first quarter of 2019, and until the quarter ended June 30, 2024, we have continued to maintain a full valuation allowance because it was been deemed more likely than not that the deferred tax assets would not be realized. As of the quarter ended June 30, 2024, based on all available positive and negative evidence, including taxable income generated in recent periods and forecasts of taxable income in future periods, we concluded that it was more likely than not that we will be able to utilize our U.S. federal and state deferred tax assets, except for a portion related to certain states where the allowable carryforward period is expected to limit our ability to fully utilize them. As a result of this, we released the valuation allowance for all of our U.S. federal deferred tax assets and a portion of our state deferred tax assets during the quarter ended June 30, 2024, resulting in an income tax benefit of $31.3 million. In determining the amount of deferred tax assets that are more likely than not to be realized, we evaluated the potential to realize the assets through future taxable income and the reversal of existing taxable temporary differences. Based on this analysis, we retained a valuation allowance of $0.1 million as of June 30, 2024.

Leases

Leases	6 Months Ended
	Jun. 30, 2024
Leases [Abstract]
Leases	Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops, warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures The gains and losses recognized upon lease terminations are recorded in impairment, loss on disposal of property and equipment and shop closures in the condensed consolidated statement of operations. The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ — The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 % Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859 Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761 As of June 30, 2024, we had no significant real estate leases entered into that had not yet commenced. Lessor Disclosures The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $1.4 million and $2.8 million in expenses during the quarter and year to date ended June 30, 2024, respectively, associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations from the inception of the related sublease agreements. We incurred $0.6 million and $0.7 million in expenses during the quarter and year to date ended June 25, 2023, respectively, associated with these leases. Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837
Leases	Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops, warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures The gains and losses recognized upon lease terminations are recorded in impairment, loss on disposal of property and equipment and shop closures in the condensed consolidated statement of operations. The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ — The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 % Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859 Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761 As of June 30, 2024, we had no significant real estate leases entered into that had not yet commenced. Lessor Disclosures The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $1.4 million and $2.8 million in expenses during the quarter and year to date ended June 30, 2024, respectively, associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations from the inception of the related sublease agreements. We incurred $0.6 million and $0.7 million in expenses during the quarter and year to date ended June 25, 2023, respectively, associated with these leases. Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837

Debt and Credit Facilities

Debt and Credit Facilities	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
Debt and Credit Facilities	Debt and Credit Facilities The components of long-term debt were as follows: June 30, December 31, Revolving Facility $ 4,000 $ — Term Loan — 22,162 Unamortized debt issuance costs — (1,744) Less: current portion of long-term debt — (1,250) Total long-term debt $ 4,000 $ 19,168 Revolving Facility On February 7, 2024, Potbelly Sandwich Works, LLC entered into a credit agreement (the “Credit Agreement”) with Wintrust Bank, N.A., as administrative agent (the “Agent”), the other loan parties party thereto and the lenders party thereto. The Credit Agreement provides for a revolving loan facility with an aggregate commitment of $30 million (the “Revolving Facility”, the commitments thereunder, the “Revolving Commitments”). Concurrently with entry into the Credit Agreement, we repaid in full and terminated the obligations and commitments of the lenders under a term loan facility described in more detail below. Proceeds from the Revolving Facility will be used for general corporate and working capital purposes. The Revolving Commitments expire on February 7, 2027. Loans under the Credit Agreement will initially bear interest, at our option, at either one-month term secured overnight financing rate ("SOFR") or the base rate plus, in each case, an applicable rate per annum, based upon the Consolidated Adjusted Leverage Ratio (as defined in the Credit Agreement). The applicable rate may vary between 3.75% and 2.75% with respect to borrowings which are based upon the one-month term SOFR and between 2.25% and 1.25% with respect to borrowings which are based upon the base rate. The applicable rate with respect to one-month term SOFR borrowings is 3.25% and the applicable rate with respect to base rate borrowings is 1.75%, based upon ratios calculated in the most recent compliance certificate for the fiscal quarter ending on March 31, 2024. We may prepay the Revolving Commitments at any time and from time to time in whole or in part without premium or penalty, subject to prior notice in accordance with the Credit Agreement. Subject to certain customary exceptions, obligations under the Credit Agreement are guaranteed by the Company and all of the Company’s current and future wholly-owned material domestic subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the Company and its subsidiary guarantors. The Credit Agreement contains customary representations and affirmative and negative covenants. Among other things, these covenants restrict our ability to incur certain indebtedness and liens, undergo certain mergers, consolidations and certain other fundamental changes, make certain investments, make certain dispositions and acquisitions, enter into sale and leaseback transactions, enter into certain swap transactions, make certain restricted payments (including certain payment of dividends, repurchases of stock and payments on certain indebtedness), engage in certain transactions with affiliates, enter into certain types of restricted agreements, make certain changes to its organizational documents and indebtedness, and use the proceeds of the Revolving Commitments for certain non-permitted uses. In addition, the Credit Agreement requires that we maintain compliance with certain minimum fixed charge coverage ratios and maximum consolidated leverage ratios as set forth in the Credit Agreement. The Credit Agreement also contains customary events of default. If an event of default occurs, the Agent and lenders are entitled to take various actions, including the acceleration of amounts due under the Credit Agreement, termination of commitments thereunder and all other actions permitted to be taken by a secured creditor. Since the execution of the Credit Agreement, we have been in compliance with all terms and covenants. Term Loan On February 7, 2023 (the “Closing Date”), we entered into a credit and guaranty agreement (the “Term Loan Credit Agreement”) with Sagard Holdings Manager LP as administrative agent. The Term Loan Credit Agreement provides for a term loan facility with an aggregate commitment of $25 million (the “Term Loan”). Concurrent with entry into the Term Loan Credit Agreement, we repaid in full and terminated the obligations and commitments under our former senior secured credit facility (the “Former Credit Facility”). In connection with entering into the Term Loan Credit Agreement, we paid $2.2 million in debt issuance costs, all of which were capitalized. The remaining proceeds from the Term Loan were used to pay related transaction fees and expenses, and for general corporate purposes. The Term Loan Credit Agreement was scheduled to mature on February 7, 2028. We were required to make principal payments equal to 1.25% of the initial principal of the Term Loan on the last business day of each fiscal quarter. If not previously paid, any remaining principal balance would be due on the maturity date. Loans under the Term Loan Credit Agreement bore interest, at the Company’s option, at either the term SOFR plus 9.25% per annum or base rate plus 8.25% per annum. The Term Loan could be prepaid in agreed-upon minimum principal amounts, subject to prepayment fees equal to (a) if the prepayment occurred on or prior to the one (1) year anniversary of the Closing Date, a customary make-whole amount plus 3.00% of the outstanding principal balance of the Term Loan, (b) if the prepayment occurred after such one (1) year anniversary and prior to the two (2) year anniversary of the Closing Date, 3.00% of the outstanding principal balance of the Term Loan, (c) if the prepayment occurred after such second anniversary of the Closing Date and prior to the three (3) year anniversary of the Closing Date 1.00% of the outstanding principal balance of the Term Loan and (d) thereafter, no prepayment fee. On February 7, 2024, we repaid in full and terminated the obligations and commitments under the Term Loan Credit Agreement. As a result of repaying and terminating the Term Loan, we recognized a loss on extinguishment of debt of $2.4 million for the year to date ended June 30, 2024. Former Credit Facility On August 7, 2019, we entered into a second amended and restated revolving credit facility agreement (the "Former Credit Agreement") with JPMorgan Chase Bank, N.A. (“JPMorgan”). The Former Credit Agreement amends and restates that certain amended and restated revolving credit facility agreement, dated as of December 9, 2015, and amended on May 3, 2019 (collectively, the "Prior Credit Agreement") with JPMorgan. The Former Credit Agreement provided, among other things, for a revolving credit facility in a maximum principal amount $40 million, with possible future increases of up to $20 million under an expansion feature. Borrowings under the credit facility generally bore interest at our option at either (i) a eurocurrency rate determined by reference to the applicable LIBOR rate plus a specified margin or (ii) a prime rate as announced by JP Morgan plus a specified margin. The applicable margin was determined based upon our consolidated total leverage ratio. On the last day of each calendar quarter, we were required to pay a commitment fee of 0.20% per annum in respect of any unused commitments under the credit facility. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022, we subsequently amended the Former Credit Agreement during fiscal years 2020, 2021 and 2022. The Former Credit Agreement provided for a revolving credit facility in a maximum principal amount of $25 million following these amendments.

Franchise Growth Acceleration I

Franchise Growth Acceleration Initiative	6 Months Ended
	Jun. 30, 2024
Other Industries [Abstract]
Franchise Growth Acceleration Initiative	Franchise Growth Acceleration Initiative The following is a summary of the refranchising activities recorded as a result of the Franchise Growth Acceleration Initiative during the quarter and year to date ended June 30, 2024 and June 25, 2023 (amounts in thousands, except number of shops): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of shops sold to franchisees 1 — 1 8 Proceeds from sale of company-operated shops $ 167 $ — $ 167 $ 100 Net assets sold (188) — (188) (512) Goodwill related to the company-operated shops sold to franchisee (3) — (3) (21) Loss on sale of company-operated shops, net (24) — (24) (433) Adjustment to recognize held-for-sale assets at fair value — — (30) (503) Other expenses (a) (4) (14) (107) (27) Loss on Franchise Growth Acceleration Initiative activities $ (28) $ (14) (161) $ (963) ______________________________ (a) These costs primarily include professional service fees, repairs and maintenance and travel expenses incurred to execute the refranchise transaction.

Capital Stock

Capital Stock	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
Capital Stock	Capital Stock On May 8, 2018, we announced that our Board of Directors authorized a stock repurchase program for up to $65.0 million of our outstanding common stock ("2018 Repurchase Program"). For the quarter and year to date ended June 30, 2024, we did not repurchase any shares of our common stock under the 2018 Repurchase Program. The 2018 Repurchase Program was terminated on May 7, 2024. On May 7, 2024, our Board of Directors authorized a stock repurchase program for up to $20.0 million of our outstanding common stock at any time during the next three years ("2024 Repurchase Program"). This program replaces the 2018 Repurchase Program, which was terminated upon execution of the 2024 Repurchase Program. The program permits us, from time to time, to 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 and Exchange Act of 1934, as amended (the "Exchange Act") or in privately negotiated transactions. The number of common shares actually repurchased, and the timing and price of repurchases, will depend upon market conditions, SEC requirements and other factors. Repurchases may be started or stopped at any time without prior notice depending on market conditions and other factors. For the quarter and year to date ended June 30, 2024, we repurchased 86,445 shares of our common stock under the 2024 Repurchase Program for an aggregate of $0.7 million, including cost and commission, in open market transactions. Repurchased shares are included as treasury stock in the condensed consolidated balance sheets and the condensed consolidated statements of equity. On February 9, 2021, we closed on a Securities Purchase Agreement (the "SPA") for the sale by us of 3,249,668 shares of our common stock at a par value of $0.01 per share and the issuance of warrants to purchase 1,299,861 shares of common stock at an exercise price of $5.45 per warrant for gross proceeds of $16.0 million, before deducting placement agent fees and offering expenses of $1.0 million. The warrants are currently exercisable until August 12, 2026. The proceeds received from the SPA were allocated between shares and warrants based on their relative fair values at closing. The warrants were valued utilizing the Black-Scholes method. No warrants were exercised for the quarter ended June 30, 2024. For year to date ended June 30, 2024, 240,187 warrants were exercised at the exercise price of $5.45 per warrant. During the quarter and year to date ended June 25, 2023, 17,505 and 176,272 warrants were exercised at the exercise price of $5.45 per warrant. As of June 30, 2024 and June 25, 2023, we had 883,402 and 1,123,589 warrants outstanding, respectively, that are exercisable through August 12, 2026. On November 3, 2021, we entered into a certain Equity Sales Agreement (the "Sales Agreement") with William Blair & Company, L.L.C., as agent ("William Blair") pursuant to which we may sell shares of our common stock having an aggregate offering price of up to $40.0 million (the "Shares"), from time to time, in our sole discretion, through an "at the market" equity offering program under which William Blair will act as sales agent. As of June 30, 2024, we have not sold any Shares under the Sales Agreement.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock options We have awarded stock options to certain employees including our senior leadership team. The number of options and exercise price of each option is determined by an independent committee designated by our Board of Directors. The options granted are generally exercisable over a 10-year period from the date of the grant. Outstanding options expire on various dates through the year 2028. The range of exercise prices for the outstanding options as of June 30, 2024 is $12.90 and $13.73 per option, and the options generally vest in one-fourth and one-fifth increments over four A summary of stock option activity for the year to date ended June 30, 2024 is as follows: Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term (Years) Outstanding—December 31, 2023 122 $ 13.71 $ — 1.44 Granted — — Exercised — — Canceled (64) 14.21 Outstanding—June 30, 2024 58 $ 13.16 $ — 2.36 Exercisable—June 30, 2024 58 $ 13.16 $ — 2.36 Stock-based compensation related to stock options is measured at the grant date based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period, which is generally the vesting period of the grant with a corresponding increase to additional paid-in capital. We did not recognize stock-based compensation expense related to stock options for the quarter and year to date ended June 30, 2024 or the quarter and year to date ended June 25, 2023. As of June 30, 2024, we had no unrecognized stock-based compensation expense related to stock options. We record stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. Restricted stock units We award restricted stock units ("RSUs") to certain employees and certain non-employee members of our Board of Directors. Grants of RSUs to our Board of Directors fully vest on the first anniversary of the grant date, or upon termination from the Board of Directors for any reason other than for cause, a pro rata portion of the shares vest on the termination date. The employee grants generally vest in one-third increments over a three-year period. A summary of RSU activity for the quarter ended June 30, 2024 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 801 $ 7.18 Granted 409 10.09 Vested (378) 7.45 Canceled (23) 8.02 Non-vested as of June 30, 2024 809 $ 8.50 For the quarter and year to date ended June 30, 2024, we recognized stock-based compensation expense related to RSUs of $1.1 million and $1.9 million, respectively. For the quarter and year to date ended June 25, 2023, we recognized stock-based compensation expense related to RSUs of $1.0 million and $1.6 million, respectively. As of June 30, 2024, unrecognized stock-based compensation expense for RSUs was $6.1 million, which will be recognized through the second quarter of 2027. Performance stock units We award performance stock units ("PSUs") to certain of our employees. We have PSUs that have certain vesting conditions based upon our stock price and relative stock performance. Because these PSUs are subject to service and market vesting conditions, we determine the fair market value of each grant using a Monte Carlo simulation model. Participants are entitled to receive a specified number of shares of our common stock contingent on achievement of a stock return on our common stock. For the quarter and year to date ended June 30, 2024, we recognized stock-based compensation expense for PSUs with market vesting conditions of $0.4 million and $1.3 million, respectively. For the quarter and year to date ended June 25, 2023, we recognized stock-based compensation expense for PSUs with market vesting conditions of $0.3 million and $0.6 million, respectively. As of June 30, 2024, unrecognized stock-based compensation expense for PSUs was $4.2 million, which will be recognized through the second quarter of 2027. A summary of activity for PSUs with market vesting conditions for the year to date ended June 30, 2024 is as follows: PSUs Number of PSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 513 $ 9.59 Granted 212 12.08 Vested (232) 7.11 Canceled — — Non-vested as of June 30, 2024 493 $ 11.83

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies We are subject to legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. We accrue for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, our estimates of the outcomes of these matters and our experience in contesting, litigating and settling other similar matters. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on our financial position or results of operations and cash flows. Many of the food products we purchase are subject to changes in the price and availability of food commodities, including, among other things, beef, poultry, grains, dairy and produce. We work with our suppliers and use a mix of forward pricing protocols for certain items including agreements with our supplier on fixed prices for deliveries at a time in the future and agreements on a fixed price with our suppliers for the duration of those protocols. We also utilize formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices. Our use of any forward pricing arrangements varies substantially from time to time and these arrangements tend to cover relatively short periods (i.e., typically twelve months or less). Such contracts are used in normal purchases of our food products and not for speculative purposes, and as such are not required to be evaluated as derivative instruments. During the quarter ended March 31, 2024, we executed a settlement agreement with a third-party software provider. The settlement resulted in a gain of approximately $1.1 million in our consolidated statement of operations which is included in both Labor and Related Expenses and Other Operating Expenses since the settlement related to costs that had previously been reported in those categories.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Pay vs Performance Disclosure
Net income attributable to Potbelly Corporation	$ 34,712	$ 2,216	$ 31,945	$ 890

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Organization and Other Matters

Organization and Other Matters (Policies)	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business	Business
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 and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported within. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly; its wholly-owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly-owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly-owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures.
Fiscal Year	Fiscal Year
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In November 2023, the Financial Accounting Standard Board ("FASB") issued guidance to expand annual and interim disclosure requirements for reportable segments, primarily through additional disclosures on segment expenses. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 29, 2024. We do not anticipate the updated standard will have a material impact on our financial statement disclosures. In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 28, 2025. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.
Revenue	We primarily earn revenue at a point in time for sandwich shop sales, which can occur in person at a shop, through our online or app platform, or through a third-party platform. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. We have other revenue generating activities where revenue is generally recognized over time, as outlined below. Franchise Royalties and Fees We earn an initial franchise fee, a franchise development agreement fee and ongoing royalty fees and support fees under our franchise agreements. Initial franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement. We record a contract liability for the unearned portion of the initial franchise fees. Franchise development agreement fees represent the exclusivity rights for a geographical area paid by a third party to develop Potbelly shops for a certain period of time. Franchise development agreement fee payments received by us are recorded in the condensed consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Royalty fees and Brand Fund contributions are based on a percentage of sales and are recorded as revenue as they are earned and become receivable from the franchisee. Other support fees, which primarily include fees for software and technology, are recorded as revenue as the fees are earned and the service is provided to the franchise. Revenue from support fees are recognized gross of the related expenses since we are the principal in the arrangement to provide those services. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer ("breakage"), which is recognized as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. We recognize gift card breakage income within sandwich shop sales, net in the condensed consolidated statements of operations. We offer a customer loyalty program for customers using the Potbelly Perks application at the point of sale. In January 2024, we enhanced our Potbelly Perks program to provide more reward options and flexibility for members. Under the original program, the customer would earn 10 points for every dollar spent, and the customer would earn a free entrée after earning 1,000 points. Once a customer earned a free entrée, that entrée reward expires after 30 days. Under the enhanced program, Potbelly Perks members will earn 10 or more coins, the equivalent of points under the legacy program, for every dollar they spend. The number of coins earned per dollar is dependent on each member's annual spend with Potbelly. Coins can be redeemed for a variety of items across the Potbelly menu. The coins expire one year after they are earned. The change in program did not have a material impact on our financial statements. We defer revenue associated with the estimated selling price of points and coins earned by Potbelly Perks members towards free entrées as they are earned, and a corresponding deferred revenue liability is established in accrued expenses. The deferral is based on the estimated value of the unredeemed points and rewards. The estimated value and the estimated redemption rates are based on a historical data analysis of loyalty reward redemptions. Estimated breakage is recognized in net shop sandwich sales in the consolidated statement of operations. When points and coins are redeemed, we recognize revenue for the redeemed product and reduce accrued expenses. Contract Liabilities We record current and noncurrent contract liabilities in accrued expenses and other long-term liabilities, respectively, for initial franchise fees, gift cards, and loyalty programs. We have no other contract liabilities or contract assets recorded.
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. We apply fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the condensed consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired.

Restricted Cash (Tables)

Restricted Cash (Tables)	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Schedule of Cash and Cash Equivalents	The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537
Restrictions on Cash and Cash Equivalents	The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers	The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability Beginning balance as of December 31, 2023 $ 8,028 $ 4,397 Ending balance as of June 30, 2024 8,229 5,701 Increase in contract liability $ 201 $ 1,304
Summary of Expected Revenue Recognition Related to Contract Liabilities	We expect to recognize revenue related to contract liabilities as follows, which may vary based upon franchise activity as well as gift card and loyalty program redemption patterns: Years Ending Amount 2024 $ 5,752 2025 2,231 2026 869 2027 605 2028 683 Thereafter 3,789 Total revenue recognized $ 13,929

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	6 Months Ended
	Jun. 30, 2024
Fair Value Disclosures [Abstract]
Schedule of Assets Measured on Recurring Basis	The following table presents information about our financial assets that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: June 30, December 31, Assets - Level 1 Money market funds $ — $ 6,398 Financial assets measured at fair value on recurring basis $ — $ 6,398

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2024
Earnings Per Share [Abstract]
Summary of Earnings Per Share Calculation	The following table summarizes the earnings per share calculation: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Net income attributable to Potbelly Corporation $ 34,712 $ 2,216 $ 31,945 $ 890 Weighted average common stock outstanding-basic 29,926 29,199 29,903 29,053 Plus: Effect of potentially dilutive stock-based compensation awards 425 467 499 360 Plus: Effect of potential warrant exercise 363 422 440 363 Weighted average common shares outstanding-diluted 30,714 30,088 30,842 29,776 Income per share available to common stockholders-basic $ 1.16 $ 0.08 $ 1.07 $ 0.03 Income per share available to common stockholders-diluted $ 1.13 $ 0.07 $ 1.04 $ 0.03 Potentially dilutive shares that are considered anti-dilutive: Shares 457 433 223 633

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2024
Leases [Abstract]
Schedule of Gain (Loss) Recognized Upon Termination of Lease Contracts	The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ —
Schedule of Weighted Average Lease Terms and Discount Rates	The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 %
Components of Lease Cost	The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859
Maturities of Lease Liabilities	Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761
Components of Lease Income	The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations.
Maturities of Sublease Payments	Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837

Debt and Credit Facilities (Tab

Debt and Credit Facilities (Tables)	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
Component of Long-term Debt	The components of long-term debt were as follows: June 30, December 31, Revolving Facility $ 4,000 $ — Term Loan — 22,162 Unamortized debt issuance costs — (1,744) Less: current portion of long-term debt — (1,250) Total long-term debt $ 4,000 $ 19,168

Franchise Growth Acceleration_2

Franchise Growth Acceleration Initiative (Tables)	6 Months Ended
	Jun. 30, 2024
Other Industries [Abstract]
Schedule of Franchise Growth Acceleration Initiative	The following is a summary of the refranchising activities recorded as a result of the Franchise Growth Acceleration Initiative during the quarter and year to date ended June 30, 2024 and June 25, 2023 (amounts in thousands, except number of shops): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of shops sold to franchisees 1 — 1 8 Proceeds from sale of company-operated shops $ 167 $ — $ 167 $ 100 Net assets sold (188) — (188) (512) Goodwill related to the company-operated shops sold to franchisee (3) — (3) (21) Loss on sale of company-operated shops, net (24) — (24) (433) Adjustment to recognize held-for-sale assets at fair value — — (30) (503) Other expenses (a) (4) (14) (107) (27) Loss on Franchise Growth Acceleration Initiative activities $ (28) $ (14) (161) $ (963) ______________________________ (a) These costs primarily include professional service fees, repairs and maintenance and travel expenses incurred to execute the refranchise transaction.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Summary of Stock Option Activity	A summary of stock option activity for the year to date ended June 30, 2024 is as follows: Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term (Years) Outstanding—December 31, 2023 122 $ 13.71 $ — 1.44 Granted — — Exercised — — Canceled (64) 14.21 Outstanding—June 30, 2024 58 $ 13.16 $ — 2.36 Exercisable—June 30, 2024 58 $ 13.16 $ — 2.36
Summary of RSU Activity	A summary of RSU activity for the quarter ended June 30, 2024 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 801 $ 7.18 Granted 409 10.09 Vested (378) 7.45 Canceled (23) 8.02 Non-vested as of June 30, 2024 809 $ 8.50
Summary of PSU Activity	A summary of activity for PSUs with market vesting conditions for the year to date ended June 30, 2024 is as follows: PSUs Number of PSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 513 $ 9.59 Granted 212 12.08 Vested (232) 7.11 Canceled — — Non-vested as of June 30, 2024 493 $ 11.83

Organization and Other Matter_2

Organization and Other Matters - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2024 subsidiary shop jointVenture
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of shops Potbelly Corporation owns or operates	345
Number of shops franchisees operate	84
Number of wholly owned subsidiaries | subsidiary	7
Number of joint ventures | jointVenture	6
Minimum
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership interest rate	51%
Maximum
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership interest rate	80%

Restricted Cash (Details)

Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 25, 2023	Dec. 25, 2022
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 8,322	$ 33,788
Restricted cash, noncurrent	749	749
Total cash, cash equivalents and restricted cash shown on statement of cash flows	$ 9,071	$ 34,537	$ 35,010	$ 15,619

Revenue - Additional Informatio

Revenue - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 25, 2023 USD ($)	Jun. 30, 2024 USD ($) coin	Jun. 25, 2023 USD ($)	Dec. 31, 2023 USD ($) point
Disaggregation Of Revenue [Line Items]
Total revenues	$ 119,697	$ 126,623	$ 230,850	$ 244,893
Gift card breakage income	200	200	500	400
Loyalty points earned per dollar spent | point					10
Cost of loyalty reward (in points) | point					1,000
Expiration period of loyalty reward					30 days
Aggregate value of remaining performance obligation on outstanding contracts	13,929		13,929
Amount of revenue recognized	1,900	600	4,300	2,000
Revenue recognized related to prior periods	0	0
Deferred contract costs	1,100		1,100		$ 900
Amortization expense for deferred costs	42	9	$ 68	36
Minimum
Disaggregation Of Revenue [Line Items]
Coins earned per dollar spent | coin			10
Point in time sales
Disaggregation Of Revenue [Line Items]
Total revenues	119,100	125,800	$ 229,700	243,700
Over time sales
Disaggregation Of Revenue [Line Items]
Total revenues	$ 600	$ 800	$ 1,100	$ 1,200

Revenue - Summary of Current an

Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Current Contract Liability
Beginning balance	$ 8,028
Ending balance	8,229
Increase in contract liability	201
Noncurrent Contract Liability
Beginning balance	4,397
Ending balance	5,701
Increase in contract liability	$ 1,304

Revenue - Summary of Expected R

Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail) $ in Thousands	Jun. 30, 2024 USD ($)
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 13,929
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 5,752
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-12-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 2,231
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-12-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 869
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-12-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 605
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-12-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 683
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-12-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 3,789
Revenue, remaining performance obligation, expected timing of satisfaction, period

Fair Value Measurement - Schedu

Fair Value Measurement - Schedule of Assets Measured on Recurring Basis (Detail) - Fair Value, Recurring - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets measured at fair value on recurring basis	$ 0	$ 6,398
Fair Value, Inputs, Level 1 | Money market funds
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Money market funds	$ 0	$ 6,398

Fair Value Measurement - Additi

Fair Value Measurement - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Fair Value Disclosures [Abstract]
Impairment charge	$ 0.4	$ 0.6

Earnings Per Share - Summary of

Earnings Per Share - Summary of Loss Per Share Calculation (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Earnings Per Share [Abstract]
Net income attributable to Potbelly Corporation	$ 34,712	$ 2,216	$ 31,945	$ 890
Weighted average common shares outstanding-basic (in shares)	29,926	29,199	29,903	29,053
Plus: Effect of potentially dilutive stock-based compensation awards	425	467	499	360
Plus: Effect of potential warrant exercise	363	422	440	363
Weighted average common shares outstanding-diluted (in shares)	30,714	30,088	30,842	29,776
Income (loss) per share available to common stockholders-basic (in USD per share)	$ 1.16	$ 0.08	$ 1.07	$ 0.03
Income (loss) per share available to common stockholders-diluted (in USD per share)	$ 1.13	$ 0.07	$ 1.04	$ 0.03
Potentially dilutive shares that are considered anti-dilutive (in shares)	457	433	223	633

Income Taxes - (Detail)

Income Taxes - (Detail) $ in Millions	3 Months Ended
	Jun. 30, 2024 USD ($)
Income Tax Disclosure [Abstract]
Release of valuation allowance	$ 31.3
Deferred tax assets, valuation allowance	$ 0.1

Leases - Additional Information

Leases - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Leases [Abstract]
Operating leases, term	10 years		10 years
Renewal term	5 years		5 years
Significant real estate leases that have not yet commenced	$ 0		$ 0
Franchise lease expense	$ 1,400,000	$ 600,000	$ 2,800,000	$ 700,000

Leases - Schedule of Lease Term

Leases - Schedule of Lease Terminations (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($) Termination	Jun. 25, 2023 USD ($) Termination
Leases [Abstract]
Leases terminated | Termination	1	0
Lease termination fees	$ 200	$ 0
Right-of-use assets derecognized upon lease termination	416	0
Lease liabilities derecognized upon lease termination	506	0
Loss recognized upon lease termination	$ (110)	$ 0

Leases - Operating Lease Term a

Leases - Operating Lease Term and Discount Rate (Detail)	Jun. 30, 2024	Jun. 25, 2023
Leases [Abstract]
Weighted average remaining lease term (years)	6 years 3 months	6 years 4 months 6 days
Weighted average discount rate	9.79%	8.44%

Leases - Components of Lease Co

Leases - Components of Lease Cost (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Leases [Abstract]
Operating lease cost	$ 9,635,000	$ 9,982	$ 19,473,000	$ 20,175
Variable lease cost	4,241,000	3,824	7,570,000	7,364
Short-term lease cost	71,000	62	172,000	157
Total lease cost	$ 13,947,000	$ 13,868	$ 27,215,000	$ 27,696

Leases - Supplemental Disclosur

Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Leases [Abstract]
Operating cash flows rent paid for operating lease liabilities	$ 11,086	$ 10,508	$ 21,834,000	$ 21,206
Operating right-of-use assets obtained in exchange for new operating lease liabilities	8,178	1,368	9,360,000	4,252
Reduction in operating right-of-use assets due to lease modifications	$ 2,331	$ 859	$ 3,007,000	$ 859

Leases - Maturities of Lease Li

Leases - Maturities of Lease Liabilities (Detail) $ in Thousands	Jun. 30, 2024 USD ($)
Operating Leases
Remainder of 2024	$ 17,748,000
2025	40,586,000
2026	36,713,000
2027	31,076,000
2028	24,486,000
2029	19,024,000
Thereafter	46,536,000
Total lease payments	216,169,000
Less: imputed interest	(59,408,000)
Present value of lease liabilities	$ 156,761,000

Leases - Lessor Operating Lease

Leases - Lessor Operating Leases (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) store	Jun. 25, 2023 USD ($) store	Jun. 30, 2024 USD ($) store	Jun. 25, 2023 USD ($) store
Leases [Abstract]
Number of subleases | store	34	8	34	8
Operating lease income	$ 949	$ 480	$ 1,960	$ 600
Variable lease income	449	25	814	38
Franchise rent income	$ 1,398	$ 505	$ 2,774	$ 638

Leases - Schedule of Future Sub

Leases - Schedule of Future Sublease Payments (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 2,049
2025	4,006
2026	3,104
2027	2,094
2028	1,703
Thereafter	3,881
Total sublease payments	$ 16,837

Debt and Credit Facilities - Co

Debt and Credit Facilities - Component of Long-term Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 0	$ (1,744)
Less: current portion of long-term debt	0	(1,250)
Total long-term debt	4,000	19,168
Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	4,000	0
Term Loan
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 22,162

Debt and Credit Facilities - Ad

Debt and Credit Facilities - Additional Information (Detail)				3 Months Ended		6 Months Ended
	Feb. 07, 2024 USD ($)	Feb. 07, 2023 USD ($)	Aug. 07, 2019 USD ($)	Jun. 30, 2024 USD ($)	Jun. 25, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 25, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 25, 2022 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt				$ 0	$ 0	$ (2,376,000)	$ (239,000)
Total long-term debt				$ 4,000,000		$ 4,000,000		$ 19,168,000
J P Morgan Chase Bank N A | Credit Facility
Debt Instrument [Line Items]
Credit facility agreement, maximum principal amount			$ 40,000,000						$ 25,000,000
Commitment fee, percentage (in percent)			0.20%
J P Morgan Chase Bank N A | Maximum Increase | Credit Facility
Debt Instrument [Line Items]
Credit facility agreement, future increases			$ 20,000,000
Credit Facility
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ (200,000)
Credit Agreement | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, maximum principal amount	$ 30,000,000
Credit Agreement | SOFR | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	3.25%
Credit Agreement | SOFR | Maximum | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	3.75%
Credit Agreement | SOFR | Minimum | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	2.75%
Credit Agreement | Base Rate | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	1.75%
Credit Agreement | Base Rate | Maximum | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	2.25%
Credit Agreement | Base Rate | Minimum | Line of Credit
Debt Instrument [Line Items]
Credit facility agreement, interest rate	1.25%
Term Loan
Debt Instrument [Line Items]
Credit facility agreement, maximum principal amount		25,000,000
Debt issuance costs		$ 2,200,000
Principal payments as a percentage of initial principal of term loan		0.0125
Term Loan | Prepayment Percentage One
Debt Instrument [Line Items]
Prepayment as a percentage of principal amount outstanding		0.0300
Term Loan | Prepayment Percentage Two
Debt Instrument [Line Items]
Prepayment as a percentage of principal amount outstanding		0.0300
Term Loan | Prepayment Percentage Three
Debt Instrument [Line Items]
Prepayment as a percentage of principal amount outstanding		0.0100
Term Loan | SOFR
Debt Instrument [Line Items]
Credit facility agreement, interest rate		9.25%
Term Loan | Base Rate
Debt Instrument [Line Items]
Credit facility agreement, interest rate		8.25%

Franchise Growth Acceleration_3

Franchise Growth Acceleration Initiative - Schedule of Franchises (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) store	Jun. 25, 2023 USD ($) store	Jun. 30, 2024 USD ($) store	Jun. 25, 2023 USD ($) store
Other Industries [Abstract]
Number of shops sold to franchisees | store	1	0	1	8
Proceeds from sale of company-operated shops	$ 167	$ 0	$ 167	$ 100
Net assets sold	(188)	0	(188)	(512)
Goodwill related to the company-operated shops sold to franchisee	(3)	0	(3)	(21)
Loss on sale of company-operated shops, net	(24)	0	(24)	(433)
Adjustment to recognize held-for-sale assets at fair value	0	0	(30)	(503)
Other expenses	(4)	(14)	(107)	(27)
Loss on Franchise Growth Acceleration Initiative activities	$ (28)	$ (14)	$ (161)	$ (963)

Capital Stock (Detail)

Capital Stock (Detail) - USD ($)			3 Months Ended				6 Months Ended
	Nov. 03, 2021	Feb. 09, 2021	Jun. 30, 2024	Mar. 31, 2024	Jun. 25, 2023	Mar. 26, 2023	Jun. 30, 2024	Jun. 25, 2023	May 07, 2024	Dec. 31, 2023	May 08, 2018
Equity Class Of Treasury Stock [Line Items]
Repurchases of common stock			$ 703,000
Common stock, par value (in USD per share)			$ 0.01				$ 0.01			$ 0.01
Proceeds from exercise of warrants				$ 1,309,000	$ 96,000	$ 865,000
Warrants outstanding			883,402		1,123,589		883,402	1,123,589
2018 Repurchase Program
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount											$ 65,000,000
Repurchases of common stock (in shares)			0				0
2024 Repurchase Program
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount									$ 20,000,000
Repurchases of common stock (in shares)			86,445				86,445
Repurchases of common stock			$ 700,000				$ 700,000
Warrants
Equity Class Of Treasury Stock [Line Items]
Placement agent fees and offering expenses		$ 1,000,000
Proceeds from exercise of warrants				$ (474,000)	$ (34,000)	$ (313,000)
Common Stock
Equity Class Of Treasury Stock [Line Items]
Repurchases of common stock (in shares)			(86,000)
Proceeds from exercise of warrants (in shares)				240,000	18,000	159,000
Proceeds from exercise of warrants				$ 2,000	$ 0	$ 1,000
Securities purchase agreement
Equity Class Of Treasury Stock [Line Items]
Proceeds from exercise of warrants (in shares)		3,249,668
Common stock, par value (in USD per share)		$ 0.01
Securities purchase agreement | Warrants
Equity Class Of Treasury Stock [Line Items]
Proceeds from exercise of warrants (in shares)		1,299,861
Exercise price of warrants (in USD per share)		$ 5.45	$ 5.45		$ 5.45		$ 5.45	$ 5.45
Proceeds from securities purchase agreement		$ 16,000,000
Securities purchase agreement | Common Stock
Equity Class Of Treasury Stock [Line Items]
Proceeds from exercise of warrants (in shares)			0		17,505		240,187	176,272
William Blair
Equity Class Of Treasury Stock [Line Items]
Proceeds from exercise of warrants	$ 40,000,000

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 25, 2023	Jun. 30, 2024	Jun. 25, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense	$ 0		$ 0
Common share options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of options outstanding, lower limit (in USD per share)			$ 12.90
Exercise price of options outstanding, higher limit (in USD per share)			$ 13.73
Recognized stock-based compensation expense	0	$ 0	$ 0	$ 0
Common share options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period (in years)			4 years
Common share options | Minimum | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			25%
Common share options | Minimum | Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			25%
Common share options | Minimum | Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			25%
Common share options | Minimum | Tranche Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			25%
Common share options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period from the date of grant			10 years
Options vesting period (in years)			5 years
Common share options | Maximum | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			20%
Common share options | Maximum | Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			20%
Common share options | Maximum | Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			20%
Common share options | Maximum | Tranche Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			20%
Common share options | Maximum | Tranche Five
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			20%
Restricted stock units (RSUs) | Non-employee board of directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period (in years)			3 years
Recognized stock-based compensation expense	1,100,000	1,000,000	$ 1,900,000	1,600,000
Unrecognized stock compensation expense	6,100,000		$ 6,100,000
Restricted stock units (RSUs) | Non-employee board of directors | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33%
Restricted stock units (RSUs) | Non-employee board of directors | Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33%
Restricted stock units (RSUs) | Non-employee board of directors | Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33%
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense	4,200,000		$ 4,200,000
Performance stock units | Market vesting conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized stock-based compensation expense	$ 400,000	$ 300,000	$ 1,300,000	$ 600,000

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Shares
Beginning balance (in shares)	122
Granted (in shares)	0
Exercised (in shares)	0
Canceled (in shares)	(64)
Ending balance (in shares)	58	122
Exercisable (in shares)	58
Weighted Average Exercise Price
Outstanding at beginning balance (in USD per share)	$ 13.71
Granted (in USD per share)	0
Exercised (in USD per share)	0
Canceled (in USD per share)	14.21
Outstanding at ending balance (in USD per share)	13.16	$ 13.71
Exercisable (in USD per share)	$ 13.16
Options outstanding aggregate intrinsic value	$ 0	$ 0
Options exercisable aggregate intrinsic value	$ 0
Weighted Average Remaining Term (Years)
Options outstanding	2 years 4 months 9 days	1 year 5 months 8 days
Options exercisable	2 years 4 months 9 days

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of RSU Activity (Detail) - Restricted stock units (RSUs) shares in Thousands	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of RSUs
Non-vested beginning balance (in shares) | shares	801
Granted (in shares) | shares	409
Vested (in shares) | shares	(378)
Canceled (in shares) | shares	(23)
Non-vested ending balance (in shares) | shares	809
Weighted Average Fair Value per Share
Weighted average fair value beginning balance (in USD per share) | $ / shares	$ 7.18
Granted (in USD per share) | $ / shares	10.09
Vested (in USD per share) | $ / shares	7.45
Canceled (in USD per share) | $ / shares	8.02
Weighted average fair value ending balance (in USD per share) | $ / shares	$ 8.50

Stock-Based Compensation - Su_3

Stock-Based Compensation - Summary of PSU Activity (Detail) - Performance stock units shares in Thousands	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of RSUs
Non-vested beginning balance (in shares) | shares	513
Granted (in shares) | shares	212
Vested (in shares) | shares	(232)
Canceled (in shares) | shares	0
Non-vested ending balance (in shares) | shares	493
Weighted Average Fair Value per Share
Weighted average fair value beginning balance (in USD per share) | $ / shares	$ 9.59
Granted (in USD per share) | $ / shares	12.08
Vested (in USD per share) | $ / shares	7.11
Canceled (in USD per share) | $ / shares	0
Weighted average fair value ending balance (in USD per share) | $ / shares	$ 11.83

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Gain legal settlement	$ 1.1