Potbelly (PBPB) 10-Q 9 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 28, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Trading Symbol	PBPB
Entity Registrant Name	Potbelly Corporation
Entity Central Index Key	1,195,734
Current Fiscal Year End Date	--12-30
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		24,844,824

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 26,711	$ 25,530
Accounts receivable, net of allowances of $124 and $129 as of September 30, 2018 and December 31, 2017, respectively	5,353	5,087
Inventories	3,459	3,525
Prepaid expenses and other current assets	10,980	11,061
Total current assets	46,503	45,203
Property and equipment, net	94,237	103,859
Indefinite-lived intangible assets	3,404	3,404
Goodwill	2,222	2,222
Deferred income taxes, noncurrent	12,612	11,202
Deferred expenses, net and other assets	7,064	4,840
Total assets	166,042	170,730
Current liabilities
Accounts payable	3,380	3,903
Accrued expenses	23,597	23,273
Accrued income taxes		176
Total current liabilities	26,977	27,352
Deferred rent and landlord allowances	22,998	22,987
Other long-term liabilities	5,983	3,153
Total liabilities	55,958	53,492
Stockholders’ equity
Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 25,102,339 and 24,999,688 shares as of September 30, 2018 and December 31, 2017, respectively	329	318
Additional paid-in-capital	432,329	421,657
Treasury stock, held at cost, 7,804,519 and 6,831,508 shares as of September 30, 2018, and December 31, 2017, respectively	(97,792)	(85,262)
Accumulated deficit	(225,195)	(219,990)
Total stockholders’ equity	109,671	116,723
Non-controlling interest	413	515
Total stockholders' equity	110,084	117,238
Total liabilities and equity	$ 166,042	$ 170,730

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Allowances on accounts receivable	$ 124	$ 129
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	200,000,000	200,000,000
Common stock, outstanding	25,102,339	24,999,688
Treasury stock, shares	7,804,519	6,831,508

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Sep. 30, 2018	Sep. 24, 2017
Revenues
Total revenues	$ 106,996	$ 106,127	$ 320,260	$ 315,962
Sandwich shop operating expenses
Cost of goods sold, excluding depreciation	28,455	28,405	83,730	83,703
Labor and related expenses	32,376	31,187	96,367	93,213
Occupancy expenses	15,076	14,354	44,787	42,792
Other operating expenses	13,357	12,464	38,650	36,349
General and administrative expenses	10,087	12,104	35,715	33,375
Depreciation expense	5,847	6,315	17,531	18,960
Pre-opening costs	109	336	245	955
Impairment and loss on disposal of property and equipment	4,386	1,536	8,467	5,762
Total expenses	109,693	106,701	325,492	315,109
Income (loss) from operations	(2,697)	(574)	(5,232)	853
Interest expense	54	32	109	101
Income (loss) before income taxes	(2,751)	(606)	(5,341)	752
Income tax expense (benefit)	(909)	(487)	(1,111)	252
Net income (loss)	(1,842)	(119)	(4,230)	500
Net income attributable to non-controlling interest	119	121	285	195
Net income (loss) attributable to Potbelly Corporation	$ (1,961)	$ (240)	$ (4,515)	$ 305
Net income (loss) per common share attributable to common stockholders:
Basic	$ (0.08)	$ (0.01)	$ (0.18)	$ 0.01
Diluted	$ (0.08)	$ (0.01)	$ (0.18)	$ 0.01
Weighted average shares outstanding:
Basic	25,369,281	24,959,023	25,355,174	25,030,951
Diluted	25,369,281	24,959,023	25,355,174	25,857,083
Product [Member]
Revenues
Total revenues	$ 106,238	$ 105,327	$ 317,866	$ 313,568
Franchise Royalties And Fees [Member]
Revenues
Total revenues	$ 758	$ 800	$ 2,394	$ 2,394

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Warrants [Member]	Additional Paid-in-Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interest [Member]
Beginning balance at Dec. 25, 2016	$ 124,236	$ 309	$ (72,321)	$ 909	$ 407,622	$ (213,034)	$ 751
Beginning balance, common shares at Dec. 25, 2016		25,139,127
Net income (loss)	500					305	195
Stock-based compensation plans	1,181	$ 2			1,179
Stock-based compensation plans, shares		168,930
Exercise of stock warrants	1,972	$ 2		$ (909)	2,879
Exercise of stock warrants, shares		241,704
Repurchases of common stock	(8,853)		(8,853)
Repurchases of common stock, shares		(745,496)
Distributions to non- controlling interest	(354)						(354)
Contributions from non- controlling interest	11						11
Amortization of stock-based compensation	3,263				3,263
Ending balance at Sep. 24, 2017	121,956	$ 313	(81,174)		414,943	(212,729)	603
Ending balance, common shares at Sep. 24, 2017		24,804,265
Beginning balance at Dec. 31, 2017	$ 117,238	$ 318	(85,262)		421,657	(219,990)	515
Beginning balance, common shares at Dec. 31, 2017	24,999,688	24,999,688
Cumulative impact of Topic 606 at 1/1/2018	$ (690)					(690)
Net income (loss)	(4,230)					(4,515)	285
Stock-based compensation plans	$ 8,167	$ 11			8,156
Stock-based compensation plans, shares		1,075,662
Exercise of stock warrants, shares	984,000
Repurchases of common stock	$ (12,414)		(12,414)
Repurchases of common stock, shares		(964,240)
Distributions to non- controlling interest	(407)						(407)
Treasury shares used for stock-based plans	(116)		(116)
Treasury shares used for stock-based plans, shares		(8,771)
Contributions from non- controlling interest	20						20
Amortization of stock-based compensation	2,516				2,516
Ending balance at Sep. 30, 2018	$ 110,084	$ 329	$ (97,792)		$ 432,329	$ (225,195)	$ 413
Ending balance, common shares at Sep. 30, 2018	25,102,339	25,102,339

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017
Cash flows from operating activities:
Net income (loss)	$ (4,230)	$ 500
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	17,531	18,960
Deferred income tax	(98)
Deferred rent and landlord allowances	12	1,924
Amortization of stock compensation expense	2,516	3,263
Excess tax deficiency from stock-based compensation	651	292
Asset impairment, store closure and disposal of property and equipment	8,666	5,922
Amortization of debt issuance costs	28	28
Changes in operating assets and liabilities:
Accounts receivable, net	(516)	(1,422)
Inventories	65	54
Prepaid expenses and other assets	(2,015)	(2,650)
Accounts payable	(201)	699
Accrued and other liabilities	244	798
Net cash provided by operating activities:	22,653	28,368
Cash flows from investing activities:
Purchases of property and equipment	(16,722)	(23,526)
Net cash used in investing activities:	(16,722)	(23,526)
Cash flows from financing activities:
Proceeds from exercise of stock options	8,167	1,181
Proceeds from exercise of stock warrants		1,972
Employee taxes on certain stock-based payment arrangements	(116)
Treasury stock repurchases	(12,414)	(8,853)
Contributions from non-controlling interest	20	11
Distributions to non-controlling interest	(407)	(354)
Net cash used in financing activities:	(4,750)	(6,043)
Net increase (decrease) in cash and cash equivalents	1,181	(1,201)
Cash and cash equivalents at beginning of period	25,530	23,379
Cash and cash equivalents at end of period	26,711	22,178
Supplemental cash flow information:
Income taxes paid	249	3,346
Interest paid	85	73
Supplemental non-cash investing and financing activities:
Unpaid liability for purchases of property and equipment	$ 1,178	$ 2,752

Organization and Other Matters

Organization and Other Matters	9 Months Ended
	Sep. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Other Matters	(1) Organization and Other Matters Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns or operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate more than 50 shops domestically, in the Middle East, Canada and India. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The unaudited condensed consolidated financial statements included herein have been prepared by the Company 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, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of September 30, 2018 and December 31, 2017, its statement of operations for the 13 and 39 weeks ended September 30, 2018 and September 24, 2017 and its statement of cash flows for the 39 weeks ended September 30, 2018 and September 24, 2017 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures. Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2018 consists of 52 weeks and 2017 consisted of 53 weeks. The fiscal quarters ended September 30, 2018 and September 24, 2017 each consisted of 13 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 I n May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers.” The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and International Financial Reporting Standards (IFRS). In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to help provide interpretive clarifications on the new guidance in Accounting Standards Codification (ASC) Topic 606. Potbelly adopted the standard effective January 1, 2018 using the modified retrospective method applied to contracts that were not completed as of the date of adoption. The adoption does not have a material impact on sandwich shop sales, but impacted the recognition of franchise revenue and gift card breakage. Potbelly licenses intellectual property and trademarks to franchisees through franchise arrangements. As part of these agreements, Potbelly receives an initial franchise fee payment, which historically was recognized as revenue when the shop opened. Effective for the annual period beginning January 1, 2018, initial franchise fees are recognized as revenue over the contractual term. Potbelly sells gift cards to customers and records the sale as a liability. The liability is released once the card is redeemed. Historically, a portion of these gift card sales were not redeemed by the customer (“breakage”) and Potbelly would recognize breakage two years after the period of sale. Effective for the annual period beginning January 1, 2018, expected breakage is recognized as customers redeem the gift cards. Upon adoption of the standard, Potbelly’s accumulated deficit increased by $0.7 million (net of tax). The franchise revenue adjustment impacted accrued expenses, other long-term liabilities and deferred income taxes. The breakage adjustment impacted accrued expenses and deferred income taxes. For the 13 weeks ended September 30, 2018, revenue recognized was $0.1 million higher than it would have been under the previous methodology, and for the 39 weeks ended September 30, 2018, revenue recognized was $0.3 million higher than it would have been under the previous methodology. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which will replace the existing guidance in ASC 840, “Leases.” The pronouncement requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, while for operating leases, the lessee would recognize a straight-line total lease expense. The pronouncement is effective for fiscal years beginning after December 15, 2018, including annual and interim periods thereafter. In July 2018, the FASB issued Accounting Standards Update No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which permits companies to initially apply the new leases standard at the date of adoption and not restate periods prior to adoption. The Company plans to adopt ASU 2018-11. The Company is currently evaluating the impact of ASU 2016-02 and anticipates it will be able to complete its analysis of all potential impacts of the standard, implement any system and process changes that might be necessary and educate the appropriate employees with respect to the new standard in order to effectively adopt the standard beginning in the first quarter of 2019.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2018
Revenue From Contract With Customer [Abstract]
Revenue	(2) Revenue Potbelly primarily earns revenue at a point in time through sales at our sandwich shop locations and records such revenue net of sales-related taxes collected from customers. The payment on these sales is due at the time of the customer’s purchase. The Company also receives royalties from franchisees on their respective sales, which are recognized at the point in time the sale is made and invoiced weekly. Potbelly also records revenue from sales over time related to upfront franchise fees, gift card redemptions and breakage. For the 39 weeks ended September 30, 2018, revenue recognized from all revenue sources on point in time sales was $319.8 million, and revenue recognized from sales over time was $0.5 million. Franchise Revenue Potbelly licenses intellectual property and trademarks to franchisees through franchise agreements. As part of these franchise agreements, Potbelly receives an upfront payment from the franchisee, which the Company recognizes over the term of the franchise agreement. The Company records a contract liability for the unearned portion of the upfront franchise payments. 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, which is recognized by the Company 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. Contract Liabilities As described above, the Company records current and noncurrent contract liabilities for upfront franchise fees as well as gift cards. There are no other contract liabilities or contract assets recorded by the Company. The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of January 1, 2018 $ (2,325 ) $ (2,144 ) Ending balance as of September 30, 2018 (1,375 ) (1,809 ) Decrease in contract liability $ (950 ) $ (335 ) The aggregate value of remaining performance obligations on outstanding contracts was $3.2 million as of September 30, 2018. The decrease in the liability during the 39 weeks ended September 30, 2018 was a result of gift card redemptions offset by purchases of new gift cards and recognition of franchise fees. The Company expects to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns: Years Ending Amount 2018 $ 692 2019 752 2020 212 2021 206 2022 199 Thereafter 1,123 Total revenue recognized $ 3,184 For the 13 and 39 weeks ended September 30, 2018, the amount of revenue recognized related to the January 1, 2018 liability ending balance was $0.3 million and $1.8 million, respectively. This revenue related to the recognition of gift card redemptions and upfront franchise fees. For the 39 weeks ended September 30, 2018, the Company did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods.

Fair Value Measurement

Fair Value Measurement	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value Measurement	(3) Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. The Company assesses potential impairments to its long-lived assets, which includes property and equipment, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. The fair value of the shop assets was determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. After performing a periodic review of the Company’s shops during the 13 weeks and 39 weeks ended September 30, 2018, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. The Company performed an impairment analysis related to these shops and recorded an impairment charge of $4.4 million and $8.5 million for the 13 and 39 weeks ended September 30, 2018, respectively. The Company recorded an impairment charge of $1.5 million and $5.8 million for the 13 and 39 weeks ended September 24, 2017, respectively. Included within the impairment charge for the 13 and 39 weeks ended September 24, 2017, impairment charges of $0.7 million were recorded in relation to Hurricane Harvey, with insurance recoveries of $0.7 million also recorded within the same caption.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Earnings (Loss) Per Share	(4) Earnings (Loss) Per Share Basic and diluted income per common share attributable to common stockholders were 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. For the 13 and 39 weeks ended September 30, 2018, the Company had a loss per share, and therefore shares were excluded for potential stock option exercises. The following table summarizes the earnings (loss) per share calculation: For the 13 Weeks Ended For the 39 Weeks Ended September 30, September 24, September 30, September 24, 2018 2017 2018 2017 Net income (loss) attributable to Potbelly Corporation $ (1,961 ) $ (240 ) $ (4,515 ) $ 305 Weighted average common shares outstanding-basic 25,369,281 24,959,023 25,355,174 25,030,951 Plus: Effect of potential stock options exercise — — — 770,965 Plus: Effect of potential warrant exercise — — — 55,167 Weighted average common shares outstanding-diluted 25,369,281 24,959,023 25,355,174 25,857,083 Income (loss) per share available to common stockholders-basic $ (0.08 ) $ (0.01 ) $ (0.18 ) $ 0.01 Income (loss) per share available to common stockholders-diluted $ (0.08 ) $ (0.01 ) $ (0.18 ) $ 0.01 Potentially dilutive shares that are considered anti-dilutive: Common share options 2,050,503 4,012,073 2,569,808 1,151,317

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	(5) Income Taxes In accordance with ASC 740, each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective tax rate. An enterprise is required, at the end of each interim reporting period, to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis. However, when a reliable estimate of the annual effective tax rate cannot be made, the actual effective tax rate for the year-to-date period may be the best estimate of the annual effective tax rate. For the 13 and 39 weeks ended September 30, 2018, the actual year-to-date effective tax rate was used to compute the income tax benefit as a reliable estimate of the annual estimated tax rate cannot be made as nominal changes in projected income or loss result in a significant variance in our estimated effective tax rate. The effective tax rate differed from the federal statutory rate primarily due to the impact of ASU 2016-09, state income taxes, federal and state tax credits and certain discrete items. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) into law making significant On that same date, the SEC staff also issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. A company must reflect the income tax effects of those aspects of the Tax Act for which accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. At September 30, 2018, the Company has not completed the accounting for the tax effects of enactment of the Tax Act; however, the Company made a reasonable estimate of the effects and booked a provisional tax expense adjustment in the fiscal year 2017, the period in which the legislation was enacted

Capital Stock

Capital Stock	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Capital Stock	(6) Capital Stock On May 8, 2018, the Company announced that its Board of Directors authorized a stock repurchase program for up to $65.0 million of its outstanding common stock, replacing the Company’s previous $30.0 million share repurchase program. The current program permits the Company, 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 Exchange Act of 1934, as amended) or in privately negotiated transactions. The number of common shares actually repurchased, and the timing and price of repurchases, will depend upon market conditions, Securities and Exchange Commission requirements and other factors. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. For the 39 weeks ended September 30, 2018, the Company repurchased 959,240 shares of its common stock for approximately $12.3 million under the new stock repurchase program and had repurchased 5,000 shares of its common stock for approximately $0.1 million under the previous share repurchase program, 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 June 14, 2018, the Company registered 1,000,000 additional shares of its common stock, par value $0.01, reserved for issuance under the Amended and Restated 2013 Long-Term Incentive Plan. As a result, the total number of shares registered under the 2013 Long-Term Incentive Plan is 3,500,000.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	(7) Stock-Based Compensation Stock options are awarded under the 2013 Long-Term Incentive Plan to eligible employees and certain non-employee members of the Board of Directors A summary of activity for the 39 weeks ended September 30, 2018 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 31, 2017 3,309 $ 10.71 $ 7,699 4.90 Granted 102 13.05 Exercised (984 ) 8.30 Canceled (347 ) 13.61 Outstanding—September 30, 2018 2,080 $ 11.60 $ 3,615 5.60 Exercisable—September 30, 2018 1,573 $ 11.04 $ 3,533 4.62 Stock-based compensation 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. For the 13 and 39 weeks ended September 30, 2018, the Company recognized stock-based compensation expense of $0.2 million and $2.5 million, respectively. For the 13 weeks ended September 24, 2017, the Company recognized stock-based compensation expense of $1.4 million. For the 39 weeks ended September 24, 2017, the Company recognized stock-based compensation expense of $3.3 million. As of September 30, 2018, unrecognized stock-based compensation expense was $2.8 million, which will be recognized through fiscal year 2022. The Company records stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	(8) Commitments and Contingencies The Company is 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. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on the Company’s financial position or results of operations and cash flows. In October 2017, plaintiffs filed a purported collective and class action lawsuit in the United States District Court for the Southern District of New York against the Company alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The plaintiffs allege that the Company violated the FLSA and NYLL by not paying overtime compensation to our assistant managers and violated NYLL by not paying spread-of-hours pay. Potbelly believes the assistant managers were properly classified under state and federal law. The Company intends to vigorously defend this action. This case is at an early stage, and Potbelly is therefore unable to make a reasonable estimate of the probable loss or range of losses, if any, that might arise from this matter.

Organization and Other Matters

Organization and Other Matters (Policies)	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Business	Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns or operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate more than 50 shops domestically, in the Middle East, Canada and India.
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The unaudited condensed consolidated financial statements included herein have been prepared by the Company 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, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of September 30, 2018 and December 31, 2017, its statement of operations for the 13 and 39 weeks ended September 30, 2018 and September 24, 2017 and its statement of cash flows for the 39 weeks ended September 30, 2018 and September 24, 2017 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures.
Fiscal Year	Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2018 consists of 52 weeks and 2017 consisted of 53 weeks. The fiscal quarters ended September 30, 2018 and September 24, 2017 each consisted of 13 weeks.
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 I n May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers.” The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and International Financial Reporting Standards (IFRS). In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to help provide interpretive clarifications on the new guidance in Accounting Standards Codification (ASC) Topic 606. Potbelly adopted the standard effective January 1, 2018 using the modified retrospective method applied to contracts that were not completed as of the date of adoption. The adoption does not have a material impact on sandwich shop sales, but impacted the recognition of franchise revenue and gift card breakage. Potbelly licenses intellectual property and trademarks to franchisees through franchise arrangements. As part of these agreements, Potbelly receives an initial franchise fee payment, which historically was recognized as revenue when the shop opened. Effective for the annual period beginning January 1, 2018, initial franchise fees are recognized as revenue over the contractual term. Potbelly sells gift cards to customers and records the sale as a liability. The liability is released once the card is redeemed. Historically, a portion of these gift card sales were not redeemed by the customer (“breakage”) and Potbelly would recognize breakage two years after the period of sale. Effective for the annual period beginning January 1, 2018, expected breakage is recognized as customers redeem the gift cards. Upon adoption of the standard, Potbelly’s accumulated deficit increased by $0.7 million (net of tax). The franchise revenue adjustment impacted accrued expenses, other long-term liabilities and deferred income taxes. The breakage adjustment impacted accrued expenses and deferred income taxes. For the 13 weeks ended September 30, 2018, revenue recognized was $0.1 million higher than it would have been under the previous methodology, and for the 39 weeks ended September 30, 2018, revenue recognized was $0.3 million higher than it would have been under the previous methodology. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which will replace the existing guidance in ASC 840, “Leases.” The pronouncement requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, while for operating leases, the lessee would recognize a straight-line total lease expense. The pronouncement is effective for fiscal years beginning after December 15, 2018, including annual and interim periods thereafter. In July 2018, the FASB issued Accounting Standards Update No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which permits companies to initially apply the new leases standard at the date of adoption and not restate periods prior to adoption. The Company plans to adopt ASU 2018-11. The Company is currently evaluating the impact of ASU 2016-02 and anticipates it will be able to complete its analysis of all potential impacts of the standard, implement any system and process changes that might be necessary and educate the appropriate employees with respect to the new standard in order to effectively adopt the standard beginning in the first quarter of 2019.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2018
Revenue From Contract With Customer [Abstract]
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers	The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of January 1, 2018 $ (2,325 ) $ (2,144 ) Ending balance as of September 30, 2018 (1,375 ) (1,809 ) Decrease in contract liability $ (950 ) $ (335 )
Summary of Expected Revenue Recognition Related to Contract Liabilities	The Company expects to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns: Years Ending Amount 2018 $ 692 2019 752 2020 212 2021 206 2022 199 Thereafter 1,123 Total revenue recognized $ 3,184

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Summary of Earnings (Loss) Per Share Calculation	The following table summarizes the earnings (loss) per share calculation: For the 13 Weeks Ended For the 39 Weeks Ended September 30, September 24, September 30, September 24, 2018 2017 2018 2017 Net income (loss) attributable to Potbelly Corporation $ (1,961 ) $ (240 ) $ (4,515 ) $ 305 Weighted average common shares outstanding-basic 25,369,281 24,959,023 25,355,174 25,030,951 Plus: Effect of potential stock options exercise — — — 770,965 Plus: Effect of potential warrant exercise — — — 55,167 Weighted average common shares outstanding-diluted 25,369,281 24,959,023 25,355,174 25,857,083 Income (loss) per share available to common stockholders-basic $ (0.08 ) $ (0.01 ) $ (0.18 ) $ 0.01 Income (loss) per share available to common stockholders-diluted $ (0.08 ) $ (0.01 ) $ (0.18 ) $ 0.01 Potentially dilutive shares that are considered anti-dilutive: Common share options 2,050,503 4,012,073 2,569,808 1,151,317

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock Options Activity	A summary of activity for the 39 weeks ended September 30, 2018 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 31, 2017 3,309 $ 10.71 $ 7,699 4.90 Granted 102 13.05 Exercised (984 ) 8.30 Canceled (347 ) 13.61 Outstanding—September 30, 2018 2,080 $ 11.60 $ 3,615 5.60 Exercisable—September 30, 2018 1,573 $ 11.04 $ 3,533 4.62

Organization and Other Matter_2

Organization and Other Matters - Additional Information (Detail) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018USD ($)ShopJointVenture	Sep. 30, 2018USD ($)ShopSubsidiaryJointVenture	Dec. 31, 2017USD ($)
Nature Of Business And Basis Of Presentation [Line Items]
Number of wholly owned subsidiaries | Subsidiary		7
Number of joint ventures | JointVenture	7	7
Term of breakage recognized after sale		2 years
Increase in accumulated deficit	$ (225,195)	$ (225,195)	$ (219,990)
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606
Nature Of Business And Basis Of Presentation [Line Items]
Increase in accumulated deficit	700	700
Increase in revenue recognized	$ 100	$ 300
Minimum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops Potbelly Corporation owns or operates | Shop	400	400
Ownership interest rate		51.00%
Maximum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Ownership interest rate		80.00%
Middle East, Canada and India [Member] | Minimum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Number of shops franchisees operate | Shop	50	50

Revenue - Additional Informatio

Revenue - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Sep. 30, 2018	Sep. 24, 2017
Disaggregation Of Revenue [Line Items]
Amount of revenue recognized	$ 106,996,000	$ 106,127,000	$ 320,260,000	$ 315,962,000
Aggregate value of remaining performance obligation on outstanding contracts	3,200,000		3,200,000
Revenue recognized related to prior periods			0
January 1, 2018 Liability Ending Balance [Member]
Disaggregation Of Revenue [Line Items]
Amount of revenue recognized	$ 300,000		1,800,000
Point in Time Sales [Member]
Disaggregation Of Revenue [Line Items]
Amount of revenue recognized			319,800,000
Over Time Sales [Member]
Disaggregation Of Revenue [Line Items]
Amount of revenue recognized			$ 500,000

Revenue - Summary of Current an

Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2018USD ($)
Revenue From Contract With Customer [Abstract]
Beginning balance of current contract liability	$ (2,325)
Ending balance of current contract liability	(1,375)
Decrease in contract liability, current	(950)
Beginning balance of noncurrent contract liability	(2,144)
Ending balance of noncurrent contract liability	(1,809)
Decrease in contract liability, noncurrent	$ (335)

Revenue - Summary of Expected R

Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail) $ in Thousands	Sep. 30, 2018USD ($)
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 3,200
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-10-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 692
Revenue, remaining performance obligation, expected timing of satisfaction, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 752
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 212
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 206
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 199
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 1,123
Revenue, remaining performance obligation, expected timing of satisfaction, period
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: (nil)
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 3,184
Revenue, remaining performance obligation, expected timing of satisfaction, period

Fair Value Measurement - Additi

Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Sep. 30, 2018	Sep. 24, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impairment charge	$ 4.4	$ 1.5	$ 8.5	$ 5.8
Hurricane Harvey [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impairment charge		0.7		0.7
Insurance recoveries		$ 0.7		$ 0.7

Earnings (Loss) Per Share - Add

Earnings (Loss) Per Share - Additional Information (Detail) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Common Share Options [Member]
Earnings (Loss) Per Share [Line Items]
Potential common shares included in diluted shares outstanding	0	0

Earnings (Loss) Per Share - Sum

Earnings (Loss) Per Share - Summary of Earnings (Loss) Per Share Calculation (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Sep. 30, 2018	Sep. 24, 2017
Earnings (Loss) Per Share [Line Items]
Net income (loss) attributable to Potbelly Corporation	$ (1,961)	$ (240)	$ (4,515)	$ 305
Weighted average common shares outstanding-basic	25,369,281	24,959,023	25,355,174	25,030,951
Plus: Effect of potential stock options exercise				770,965
Plus: Effect of potential warrant exercise				55,167
Weighted average common shares outstanding-diluted	25,369,281	24,959,023	25,355,174	25,857,083
Income (loss) per share available to common stockholders-basic	$ (0.08)	$ (0.01)	$ (0.18)	$ 0.01
Income (loss) per share available to common stockholders-diluted	$ (0.08)	$ (0.01)	$ (0.18)	$ 0.01
Common Share Options [Member]
Earnings (Loss) Per Share [Line Items]
Potentially dilutive shares that are considered anti-dilutive	2,050,503	4,012,073	2,569,808	1,151,317

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
U.S. federal corporate tax rate		21.00%	35.00%
Adjustments to provisional amount previously recorded related to enactment of Tax Act	$ 0	$ 0

Capital Stock - Additional Info

Capital Stock - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Jun. 14, 2018	May 08, 2018	May 07, 2018	Dec. 31, 2017
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount				$ 65,000,000
Common stock repurchased value	$ 12,414,000	$ 8,853,000
Common stock, par value	$ 0.01					$ 0.01
Amended and Restated 2013 Long-Term Incentive Plan [Member]
Equity Class Of Treasury Stock [Line Items]
Additional shares of common stock reserved for issuance			1,000,000
Common stock, par value			$ 0.01
Total number of shares registered			3,500,000
Previous Share Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount					$ 30,000,000
Common stock shares repurchased	5,000
Common stock repurchased value	$ 100,000
New Stock Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Common stock shares repurchased	959,240
Common stock repurchased value	$ 12,300,000

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 24, 2017	Sep. 30, 2018	Sep. 24, 2017	Jun. 14, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average common stock fair value			$ 13.05
Recognized stock-based compensation expense	$ 200	$ 1,400	$ 2,516	$ 3,263
Unrecognized stock compensation expense	$ 2,800		$ 2,800
Unrecognized stock compensation expense, recognition period			2,022
2013 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares of common stock reserved for issuance					1,000,000
Total number of shares registered					3,500,000
Weighted average common stock fair value			$ 5.24
Expected life of options			6 years 3 months
Volatility			35.39%
Risk-free interest rate			2.85%
Dividend yield			0.00%
Method used to determine fair value of the options			Black-Scholes option pricing model

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Options Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options outstanding shares, beginning balance	3,309
Options, granted	102
Options, exercised	(984)
Options, canceled	(347)
Options outstanding shares, ending balance	2,080	3,309
Options outstanding shares, exercisable	1,573
Options outstanding weighted average exercise price, beginning balance	$ 10.71
Options, weighted average exercise price, granted	13.05
Options, weighted average exercise price, exercised	8.30
Options, weighted average exercise price, canceled	13.61
Options outstanding weighted average exercise price, ending balance	11.60	$ 10.71
Options outstanding weighted average exercise price, exercisable	$ 11.04
Options outstanding aggregate intrinsic value	$ 3,615	$ 7,699
Options exercisable aggregate intrinsic value	$ 3,533
Option outstanding weighted average remaining term	5 years 7 months 6 days	4 years 10 months 24 days
Options exercisable weighted average remaining term	4 years 7 months 13 days

Commitment and Contingencies -

Commitment and Contingencies - Additional Information (Detail)	1 Months Ended
	Oct. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Purported collective and class action lawsuit filed date	October 2,017