Potbelly Corporation (PBPB): Analyse du pilon [Jan-2025 mise à jour]

Dans le monde dynamique de la restauration rapide, Potbelly Corporation (PBPB) navigue dans un paysage complexe de défis et d'opportunités. Des préférences des consommateurs changeantes aux perturbations technologiques, cette analyse complète du pilon dévoile les facteurs externes complexes qui façonnent la trajectoire stratégique de l'entreprise. Plongez profondément dans la dynamique politique, économique, sociologique, technologique, juridique et environnementale qui déterminera la résilience de Potbelly et l'avantage concurrentiel dans une industrie de la restauration de plus en plus volatile.

Potbelly Corporation (PBPB) - Analyse du pilon: facteurs politiques

Législation sur le salaire minimum de l'industrie de la restauration

En 2024, le salaire minimum fédéral reste 7,25 $ par heure. Cependant, les taux de salaire minimum au niveau de l'État varient considérablement:

État	Taux de salaire minimum	Impact sur PotBelly
Californie	15,50 $ / heure	Impact élevé des coûts de main-d'œuvre
New York	15,00 $ / heure	Dépenses opérationnelles importantes
Illinois	14,00 $ / heure	Augmentation modérée des coûts de main-d'œuvre

Politiques commerciales et chaîne d'approvisionnement alimentaire

Tarifs tarifaires actuels affectant la chaîne d'approvisionnement alimentaire:

• Tarifs d'importation de viande: 26,4%
• Tarifs des produits laitiers: 17,3%
• Produire des tarifs d'importation: 12,8%

Règlement sur la sécurité alimentaire gouvernementale

Exigences clés de la conformité réglementaire:

Règlement	Coût annuel de conformité
Loi de modernisation de la sécurité alimentaire de la FDA	$85,000 - $120,000
Protocoles d'inspection de l'USDA	$45,000 - $65,000

Considérations de politique fiscale

Implications fiscales actuelles pour les opérations des restaurants:

• Taux d'imposition des sociétés: 21%
• Section 179 Limite de déduction de l'équipement: 1 160 000 $
• Déduction de dépenses de repas du restaurant: 50%

Potbelly Corporation (PBPB) - Analyse du pilon: facteurs économiques

L'incertitude économique continue a un impact sur les dépenses de restauration des consommateurs

Au quatrième trimestre 2023, Potbelly Corporation a déclaré un chiffre d'affaires total de 118,2 millions de dollars, ce qui représente une baisse de 3,4% par rapport à la même période en 2022.

Métrique	Valeur 2023	Changement d'une année à l'autre
Revenus totaux	118,2 millions de dollars	-3.4%
Valeur de transaction moyenne	$13.62	+2.1%
Ventes à magasins comparables	-1.7%	Croissance négative

Inflation pressant les coûts de nourriture et d'exploitation

Le Bureau américain des statistiques du travail a déclaré une inflation des coûts alimentaires à 5,8% en 2023, ce qui concerne directement les dépenses opérationnelles de Potbelly. Les coûts alimentaires en pourcentage des revenus sont passés de 28,5% en 2022 à 31,2% en 2023.

Catégorie de coûts	Pourcentage de 2022	Pourcentage de 2023	Augmenter
Coûts alimentaires	28.5%	31.2%	2.7%
Coûts de main-d'œuvre	33.6%	35.1%	1.5%

Marché de restauration rapide et casual compétitif avec des marges bénéficiaires étroites

Le segment des restaurants rapidement casual a montré une marge bénéficiaire moyenne de 3 à 5% en 2023. La marge brute de Potbelly était de 4,2%, légèrement en dessous de la médiane de l'industrie de 4,7%.

Métrique de la rentabilité	Potbelly Corporation	Médiane de l'industrie
Marge brute	4.2%	4.7%
Marge bénéficiaire nette	1.1%	2.3%

Risques de récession potentiels affectant les dépenses de restauration discrétionnaires

Les dépenses de consommation pour manger une diminution de 2,3% en 2023, les dépenses de restauration discrétionnaires montrant une sensibilité accrue à l'incertitude économique. Le nombre de restaurants de Potbelly est resté stable dans 384 emplacements à l'échelle nationale.

Indicateur économique	Valeur 2023	Changement à partir de 2022
Dépenses de restauration discrétionnaires	-2.3%	Déclin
Nombre d'emplacements de potbelly	384	Écurie

Potbelly Corporation (PBPB) - Analyse des pilons: facteurs sociaux

Augmentation des préférences des consommateurs pour des options alimentaires plus saines et personnalisables

Selon le rapport sur la tendance des consommateurs en 2023 de Technomic, 73% des consommateurs recherchent des options de menu plus saines. Le modèle de personnalisation de PotBelly s'aligne sur cette tendance, permettant 4 à 6 modifications d'ingrédients par sandwich.

Préférence de santé des consommateurs	Pourcentage
Cherchez des options de restaurants plus sains	73%
Préférer les repas personnalisables	68%
Considérer les étiquettes de nutrition importantes	62%

Demande croissante de commande numérique et d'expériences de restauration sans contact

Les revenus de commande numérique ont atteint 154,1 milliards de dollars en 2023, ce qui représente 39% du total des ventes de restaurants. Les ventes numériques de Potbelly ont augmenté de 22,4% au troisième trimestre 2023, représentant 41,2% du total des ventes.

Métriques de commande numérique	Valeur
Revenu total de commande numérique	154,1 milliards de dollars
Pourcentage de ventes numériques PotBelly	41.2%
Croissance des ventes numériques	22.4%

Consommateurs de milléniaux et de génération Z à la recherche d'expériences de restauration uniques

75% des milléniaux et de la génération Z priorisent les expériences de restaurant sur les restaurants traditionnels. Les restaurants de style vintage de Potbelly attirent 25 à 40 ans, avec 58% des clients de ce segment.

Préférence de l'expérience des consommateurs	Pourcentage
Millennials / Gen Z à la recherche d'expériences uniques	75%
Clients PotBelly âgés de 25 à 40 ans	58%
Préférez les espaces de restauration dignes d'Instagram	62%

Vers la commodité et les modèles de restaurants à service rapide

Le marché des restaurants à service rapide qui devrait atteindre 1,1 billion de dollars d'ici 2024. Le temps de transaction moyen de Potbelly est de 7,3 minutes, compétitif dans le segment rapide.

Métriques du restaurant à service rapide	Valeur
Taille du marché prévu d'ici 2024	1,1 billion de dollars
Temps de transaction moyen en potbelly	7,3 minutes
Taux de croissance du marché	4.5%

Potbelly Corporation (PBPB) - Analyse du pilon: facteurs technologiques

Investissement continu dans les plateformes de commande numérique et les applications mobiles

Au troisième trimestre 2023, Potbelly a déclaré 19,4% du total des ventes générées par le biais de canaux numériques. Les téléchargements d'applications mobiles de l'entreprise ont augmenté de 12,7% par rapport à l'année précédente. L'investissement de plate-forme numérique a atteint 2,3 millions de dollars en 2023.

Métrique du canal numérique	Performance de 2023
Pourcentage de ventes numériques	19.4%
La croissance des téléchargements d'applications mobiles	12.7%
Investissement de plate-forme numérique	2,3 millions de dollars

Mise en œuvre de la personnalisation de l'expérience client dirigée par l'IA

Potbelly a alloué 1,7 million de dollars à la mise en œuvre de la technologie de l'IA en 2023. L'algorithme de personnalisation prend actuellement en charge 37% des fonctionnalités de recommandation des clients.

Métrique de personnalisation de l'IA	2023 données
Investissement technologique AI	1,7 million de dollars
Couverture de recommandation des clients	37%

Programme de fidélité amélioré grâce à l'intégration de la technologie numérique

Le programme de fidélité numérique de Potbelly a atteint 215 000 membres actifs en 2023, ce qui représente une augmentation de 16,5% par rapport à 2022. Le programme a généré 4,6 millions de dollars en revenus suivis.

Métrique du programme de fidélité	Performance de 2023
Membres de fidélité active	215,000
Croissance d'une année à l'autre	16.5%
Revenus du programme de fidélité	4,6 millions de dollars

Exploration de l'automatisation dans les opérations de cuisine et le traitement des commandes

PotBelly a investi 3,2 millions de dollars dans les technologies d'automatisation de la cuisine en 2023. La couverture d'automatisation actuelle comprend 24% des flux de travail de traitement des commandes et 18% des tâches de préparation de la cuisine.

Métrique d'automatisation	2023 données
Investissement technologique d'automatisation	3,2 millions de dollars
Automatisation du traitement des commandes	24%
Automatisation de la préparation de la cuisine	18%

Potbelly Corporation (PBPB) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations sur la sécurité alimentaire et la santé

Potbelly Corporation fait face à des exigences de conformité réglementaire strictes dans plusieurs juridictions:

Corps réglementaire	Métrique de conformité	Taux d'inspection annuel
Règlement sur la sécurité alimentaire de la FDA	100% de conformité requise	2-4 inspections par restaurant par an
Services de santé de l'État	Certifications obligatoires de manutention des aliments	Renouvellement annuel requis
Lignes directrices sur la sécurité alimentaire de l'USDA	Normes de traçabilité des ingrédients	Audits de documentation trimestrielle

Défis potentiels du droit du travail dans la gestion de la main-d'œuvre des restaurants

Mesures clés de la conformité du droit du travail:

• Conformité au salaire minimum: 7,25 $ de référence fédérale
• Règlement sur les heures supplémentaires: 1,5x payant des heures dépassant 40 / semaine
• Précision de la classification des employés: 98,6% ont déclaré la conformité

Catégorie de droit du travail	Risque juridique potentiel	Coût d'atténuation
Litiges salariaux	Risque moyen-élevé	250 000 $ à 500 000 $ par an
Discrimination en milieu de travail	Risque à faible médiation	150 000 $ à 300 000 $ par an

Protection de la propriété intellectuelle pour les innovations de menu

Stratégie de protection de la propriété intellectuelle de Potbelly:

• Inscriptions de la marque: 12 Marques actiales du menu
• Budget de protection secrète du commerce: 75 000 $ par an
• Protection juridique pour les recettes uniques: surveillance continue

Adhésion aux réglementations de confidentialité et de cybersécurité des données

Règlement	Exigence de conformité	Investissement annuel de conformité
CCPA (Californie)	100% Protection des données du client	$425,000
RGPD (international)	Protocoles de traitement des données strictes	$350,000
PCI DSS (sécurité des paiements)	Cryptage de bout en bout	$275,000

Métriques de cybersécurité:

• Budget annuel de cybersécurité: 1,2 million de dollars
• Investissement de prévention des violations de données: 850 000 $
• Taux de réussite de l'audit de la conformité: 99,7%

Potbelly Corporation (PBPB) - Analyse du pilon: facteurs environnementaux

Accent croissant sur les pratiques d'approvisionnement alimentaire durables

Potbelly Corporation a déclaré 440,4 millions de dollars de revenus totaux pour 2022, avec 5,8% des fournisseurs engagés dans des pratiques d'approvisionnement durables. L'entreprise a obtenu 12,3% des ingrédients des producteurs locaux dans un rayon de 250 miles de restaurants.

Métrique d'approvisionnement durable	Pourcentage	Volume (livres)
Source des ingrédients locaux	12.3%	483,000
Fournisseurs certifiés durables	5.8%	227,200

Réduction des plastiques à usage unique dans l'emballage des restaurants

Potbelly a réduit l'emballage en plastique à usage unique de 22,7% en 2022, éliminant environ 67 500 livres de déchets plastiques. La société a investi 1,2 million de dollars dans des alternatives d'emballage durables.

Métrique de réduction du plastique	Valeur	Impact sur les coûts
Les déchets plastiques éliminés	67 500 lbs	$1,200,000
Pourcentage de réduction des emballages	22.7%	N / A

Initiatives d'efficacité énergétique dans les opérations des restaurants

Potbelly a mis en œuvre des mesures d'efficacité énergétique dans 470 emplacements de restaurants, réduisant la consommation d'énergie de 16,4%. Les économies totales de coûts énergétiques ont atteint 2,3 millions de dollars en 2022.

Métrique de l'efficacité énergétique	Valeur	Impact financier
Emplacements totaux de restaurants	470	N / A
Réduction de la consommation d'énergie	16.4%	$2,300,000

Stratégies potentielles de réduction de l'empreinte carbone

Potbelly a ciblé une réduction des émissions de carbone de 15,6% entre les opérations du restaurant. La société a alloué 3,7 millions de dollars aux initiatives de neutralité en carbone en 2022.

Métrique de réduction du carbone	Pourcentage cible	Investissement
Réduction des émissions de carbone	15.6%	$3,700,000

Potbelly Corporation (PBPB) - PESTLE Analysis: Social factors

Strong consumer shift towards healthier, customizable meal options

You're seeing a clear, sustained shift in the fast-casual space: consumers want control over what they eat, and they want it to feel fresh and healthier. This isn't a fad; it's a structural change. The fast-casual market's growth is fundamentally driven by this demand for fresh, customizable, and high-quality meals. Potbelly Corporation is directly addressing this by positioning its core offering-customized, toasted sandwiches-alongside lighter options.

For instance, the company offers its 'Skinny' sandwiches, which contain about one-third less bread, meat, and cheese, typically falling under 400 calories. They also provide flat bread and multi-grain breads to appeal to the health-conscious customer. This focus on customization, where guests can choose their own proteins, sauces, and toppings, is a critical element of the brand's appeal in 2025, especially as 77% of consumers cite affordability and value-based choices as their number one purchase driver. That's a huge number you can't ignore.

Increased demand for convenience, driving reliance on delivery and takeout

The demand for convenience has fundamentally re-wired how people buy food, and Potbelly's digital channel is now a major revenue engine. In the first quarter of fiscal year 2025, the company's digital business represented over 42% of total shop sales, marking a significant 200 basis point increase year-over-year. This digital penetration is industry-leading and shows the success of their investment in the Potbelly Perks loyalty program and the overall digital platform.

The fast-casual model lends itself perfectly to this trend because the food travels well. Potbelly is capitalizing on this by continuously enhancing its catering channel, which remains a core growth driver. The entire industry is seeing a turbocharge in delivery and takeout, and Potbelly is well-positioned with its digital-first strategy.

Labor shortages necessitate higher wages and better benefits to retain staff

Honestly, labor remains the single biggest operational headache for the restaurant industry in 2025. While the quick-service and fast-casual segments have seen employment levels rise by 107,000 jobs (or 2.4%) above pre-pandemic levels as of August 2025, the competition for talent is intense. This persistent shortage forces companies like Potbelly to increase wages and benefits, which directly pressures margins.

Here's the quick math on the cost pressure: Potbelly's Labor and related expenses were $33.097 million in Q1 2025, representing 30.4% of net sandwich shop sales, and $33.210 million in Q2 2025. This percentage is in the upper range of the typical 25-35% benchmark for the industry. To mitigate this, the company has focused on operational discipline, which helped expand shop-level margins to 13.7% in Q1 2025, partly through improved staffing and turnover metrics.

Potbelly Corporation Labor & Related Expenses (2025)	Q1 2025 (in thousands)	% of Net Sandwich Shop Sales	Q2 2025 (in thousands)	% of Net Sandwich Shop Sales
Labor and related expenses	$33,097	30.4%	$33,210	28.0%

Focus on corporate social responsibility (CSR) influences brand perception

A company's values are now part of the product, and consumers-especially younger ones-are watching. Potbelly understands that a focus on Corporate Social Responsibility (CSR) is essential for brand loyalty and goodwill. Their core values include 'Community Connection' and 'Employee Well-being,' which translate into concrete actions.

They defintely need to keep this up.

• Community Support: Engages with local communities and partners with charities to foster a neighborhood gathering place image.
• Employee Welfare: Operates the Potbelly GiVes employee relief program, a 501(c)(3) fund, to support team members facing catastrophic emergencies.
• Ethical Sourcing: Maintains a Supplier Code of Conduct and is committed to exclusively sourcing cage-free eggs for all primary eggs by the end of 2026.
• Diversity & Inclusion: Actively promotes an inclusive work environment and maintains a non-discrimination policy.

Potbelly Corporation (PBPB) - PESTLE Analysis: Technological factors

The core technological factor for Potbelly Corporation is its successful pivot to a digital-first operating model, which now acts as the primary driver of same-store sales growth and operational efficiency. The near-term opportunity lies in translating its back-of-house digitization into a clear labor cost advantage, but this is balanced by the rising and inevitable risk of managing a much larger customer data footprint.

Digital Sales Channels (App, Web) Account for Over 40% of Total Sales

You can't talk about Potbelly's 2025 performance without starting here: the company's digital business is no longer a side channel-it's the main highway. In the second quarter of 2025, digital sales represented over 41% of total shop sales, a significant jump from prior years. This momentum, which contributed to a total revenue of $123.7 million in Q2 2025, is directly tied to investments in a rebuilt website and mobile app.

The digital platform, including the Potbelly Perks loyalty program, is designed for speed and personalization. It allows for one-click ordering and quick reward redemption, which is defintely a necessary feature in the fast-casual space. This focus is what drove a 3.2% increase in company-operated same-store sales for the quarter.

Operational Efficiency and Kitchen Digitization

The next wave of technology is moving beyond the customer interface and into the kitchen, aiming to cut down on prep time and waste. Potbelly is standardizing its new 1,800-square-foot shop prototype, which is about 500 square feet smaller than older formats, to optimize digital transactions and streamline operations. Here's the quick math: a smaller footprint and more efficient layout means lower development costs, which are already coming in below the chain's historical average of $650,000 per unit.

The heart of this is the new Digital Kitchen platform, which includes:

• Kitchen Display Systems (KDS): Replacing paper tickets to manage order flow.
• Upgraded POS: Improving transaction speed and accuracy.
• Back-of-House Workflow Tools: The foundational technology for what will eventually become AI-driven inventory and labor scheduling.

This digitization, including employees using handheld devices during peak hours (PDCX), is key to maintaining a quick speed of service, a critical factor when 41% of orders are off-premise.

Cybersecurity Risks Increase with Expanded Customer Data Handling

The trade-off for this digital growth is a significant increase in data liability. Potbelly's strategy is explicitly focused on using 'data and analytics' to create personalized digital and loyalty experiences, including 'tailored menus, relevant offers, and real-time communications based on behavior and location'. This level of personalization requires collecting and securely storing vast amounts of sensitive customer behavior data.

For a growing company with a market capitalization of approximately $381.3 million as of Q2 2025, a major data breach could lead to substantial financial penalties and severely damage the loyalty program that drives over 40% of sales. Therefore, the investment in consumer-facing digital assets must be matched by an equally robust, if not greater, investment in cybersecurity infrastructure and data governance.

Technological Factor	2025 Key Metric/Value	Strategic Impact
Digital Sales Penetration	Over 41% of total shop sales (Q2 2025)	Shifts business model from in-store traffic to omni-channel convenience; drives same-store sales growth of 3.2%.
New Shop Prototype (Size/Cost)	1,800 square feet (approx. 500 sq. ft. reduction)	Lowers development costs below historical $650,000 average; enables faster unit expansion and better franchise unit economics.
Back-of-House Digitization	Digital Kitchen platform (KDS, upgraded POS, workflow tools)	Improves speed of service and order accuracy; lays groundwork for future AI-driven inventory and labor management.
Data & Analytics Investment	Focus on 'data and analytics' for personalized offers	Increases customer lifetime value via tailored marketing; significantly elevates the company's cybersecurity and data privacy risk profile.

Finance: Mandate an external audit of customer data security protocols against the new Q2 2025 digital sales volume by the end of the year.

Potbelly Corporation (PBPB) - PESTLE Analysis: Legal factors

Food safety and hygiene standards require rigorous, documented compliance.

The quick-service restaurant (QSR) industry is under constant, intense scrutiny from federal, state, and local regulatory bodies on food safety. Potbelly Corporation must adhere to strict standards set by the Food and Drug Administration (FDA) and local health departments, which mandates rigorous, documented compliance across its entire system, including franchised locations.

While the specific dollar amount for 2025 compliance costs isn't broken out, Potbelly dedicates substantial resources to food safety, including leveraging third-party companies to conduct food safety assessments and provide customer service feedback. A single, major food-borne illness incident could trigger massive litigation, fines, and a significant, immediate drop in sales, so this is a cost of doing business that cannot be cut. Consumer reaction to any perceived food safety issue is a clear and present reputational risk.

Franchise agreements and disclosure laws govern the 'Franchise First' expansion model.

Potbelly's 'Franchise First' growth strategy, which aims to accelerate unit growth, is fundamentally governed by complex franchise disclosure laws, primarily the Federal Trade Commission's (FTC) Franchise Rule and various state-specific franchise laws. This requires meticulous preparation and annual updating of the Franchise Disclosure Document (FDD).

The legal complexity increases with the pace of expansion. In the first half of fiscal year 2025, the company signed a total of 94 new franchise shop commitments (40 in Q1 and 54 in Q2). As of June 29, 2025, the total count of open and committed shops stood at 816. Each new agreement requires legal review to manage risk, especially regarding the exclusive Shop Development Area Agreements (SDAAs) used for multi-unit operators.

Here's a quick snapshot of the 'Franchise First' expansion momentum in 2025:

Metric	Q1 2025 (as of March 30)	Q2 2025 (as of June 29)
New Franchise Shop Commitments Signed	40	54
Total Open and Committed Shop Count	766	816
Initial Franchise Fee (Per Location)	$20,000 - $40,000 (2025 FDD)	$20,000 - $40,000 (2025 FDD)
Estimated Initial Investment Range	$654,000 - $1,274,000 (2025 FDD)	$654,000 - $1,274,000 (2025 FDD)

Data privacy laws (e.g., CCPA) mandate strict handling of customer information.

Potbelly's growing digital business, including its mobile app and online ordering platform, significantly increases its exposure to data privacy laws like the California Consumer Privacy Act (CCPA) and other emerging state regulations. The company collects, processes, and retains sensitive personal information, including credit card and geo-location data, which is a major legal and compliance risk.

The constant evolution of these laws means compliance is not a one-time fix; it's a defintely ongoing operational expense. The complexity of these rules can result in significant costs from compliance efforts and from non-compliance penalties. For a company of Potbelly's size, general estimates for initial CCPA compliance costs alone can be up to $2 million, plus ongoing annual technology costs. Plus, the company relies on third-party delivery partners who own customer data for orders placed on their platforms, creating an additional layer of legal risk and competitive disadvantage.

Litigation risk related to employment practices and wage disputes remains high.

Employment practices litigation, particularly class action lawsuits concerning wage and hour disputes, is a high-frequency risk in the restaurant sector, and Potbelly is not immune. This legal exposure is concentrated in states with stringent labor laws.

A concrete example from 2025 is the proposed class action settlement in Washington state concerning alleged violations of the Washington Equal Pay and Opportunities Act. This law requires employers to disclose wage and salary information to job applicants.

The financial impact of this litigation is significant in 2025:

• The proposed class action settlement, preliminarily approved in May 2025, established a settlement fund with a minimum payment of $1,688,940 and a maximum payment of $2,706,000.
• The final fairness hearing is scheduled for October 10, 2025.
• In a related legal action, Potbelly Corporation filed a lawsuit in March 2025 against its employment practices liability insurer, Beazley Insurance Company Inc., seeking a declaratory judgment for defense and indemnity coverage for the underlying class action.

This situation shows that employment-related legal costs are a two-pronged threat: the cost of the settlement itself, plus the secondary litigation costs to secure insurance coverage. The core action for management is to ensure all job postings and hiring practices are immediately updated to comply with all state-level wage transparency laws to mitigate future, similar class action risk.

Potbelly Corporation (PBPB) - PESTLE Analysis: Environmental factors

The environmental pressure points for Potbelly Corporation are translating directly into margin volatility, especially through packaging and commodity costs. You need to look past the slight commodity deflation reported in Q1 2025, because the structural costs of sustainable packaging and long-term climate-driven volatility in beef and wheat are the real threats to your food, beverage, and packaging (FBP) line item.

Consumer preference for sustainable packaging drives up material costs

Customer demand for eco-friendly options is a non-negotiable trend, but it comes with a hefty price tag on the supply side. The raw materials for plant-based plastics (biopolymers) and compostable packaging generally cost 20% to 50% more than their traditional petroleum-based counterparts. This cost premium hits your FBP line, which stood at $28.451 million in Q1 2025, representing 26.1% of sandwich shop sales. Even though your Q1 2025 FBP cost percentage improved by 110 basis points year-over-year due to strong commodity management, the underlying structural cost of packaging is rising.

To be fair, this is also a major opportunity. About 73% of US consumers prefer compostable food packaging and are often willing to pay a slight price increase for it. This means you can raise prices to offset the material cost, but you have to defintely nail the execution. Paper and paperboard, a core material for a sandwich shop, is projected to account for 42.8% of the biodegradable food packaging market in 2025, which gives you a clear path for sourcing, but the cost pressure is still real.

Increased scrutiny on food waste reduction and disposal practices

Mandatory food waste diversion is quickly moving from a regional trend to a national regulatory reality, especially in states where Potbelly has a significant presence. This requires an operational shift from simple trash disposal to complex organics recycling (composting).

For instance, in California, Senate Bill 1383 sets a 2025 goal to reduce organic waste disposal by 75%. Similarly, in Washington, businesses generating four cubic yards or more of organic waste per week must arrange for composting or organics recycling by the end of 2025. This means every shop in these regions needs new bins, new waste collection contracts, and significant employee training, all of which drive up your 'Other Operating Expenses,' which totaled $21.808 million in Q2 2025. This is a compliance cost, not a choice.

• Implement food waste tracking systems to cut spoilage.
• Negotiate new organics collection contracts in high-regulation states.
• Train all new hires on waste segregation on day one.

Energy consumption regulations for commercial kitchens impact operating expenses

New energy efficiency standards for commercial kitchens, often driven by state-level building codes, are forcing capital investment into more efficient equipment. While the initial CapEx is high, the long-term operational savings are compelling. Refrigeration alone can account for 40% to 60% of a QSR's total energy use, making high-efficiency coolers and freezers a priority investment.

In new construction or major remodels, technologies like Demand Control Kitchen Ventilation (DCKV) are becoming standard. In California, for example, the estimated benefit-to-cost ratio for mandating DCKV in commercial kitchens over a 30-year period is a remarkable 15.9. This means every dollar spent on DCKV saves nearly sixteen dollars in energy over the equipment's lifetime. You need to bake these efficiency upgrades into your new franchise build-out model to maintain a competitive operating expense structure.

Climate change affects commodity prices and supply chain reliability

Climate volatility is permanently increasing the risk premium on your core ingredients. The slight commodity deflation of 40 basis points you saw in Q1 2025 was a momentary relief, but the long-term outlook for key inputs is inflationary and wildly unpredictable. This is a major factor in your Food, Beverage, and Packaging costs, which hit $31.110 million in Q2 2025.

The biggest near-term risk is protein. Farm-level cattle prices are predicted to increase by 22.5% in 2025, with wholesale beef prices expected to rise by 12.0% due to tight cattle supplies. While farm-level wheat prices are predicted to decrease by 11.1% in 2025, the market is highly sensitive to Black Sea logistics and US weather, causing wild price swings. This unpredictability makes long-term procurement hedging a critical, but difficult, action.

Here's the quick math on labor: If a shop operates 16 hours a day with 5 employees at $\mathbf{\$18}$/hour, that's $\mathbf{\$1,440}$ in daily labor just for a single shift, a massive fixed cost. The only way out is higher volume through digital channels and franchising. Finance: model a 100-basis-point margin compression for every $\mathbf{\$1}$ increase in average hourly wage by Friday.

Commodity Group	2025 Price Outlook (Year-over-Year Change)	Primary Environmental Driver	Impact on Potbelly Menu
Beef (Farm-Level)	Predicted to increase by 22.5%	Drought-driven cyclical herd contraction	Roast Beef, Meatballs (High-cost protein risk)
Wheat (Farm-Level)	Predicted to decrease by 11.1%	Geopolitical volatility, US crop outlook	Bread, Sandwich Rolls (High-volume staple risk)
Dairy/Milk (Farm-Level)	Predicted to decrease by 1.2%	Increased production offsetting input costs	Cheese, Milk/Shakes (Stable, but watch for regional spikes)
Sustainable Packaging	Raw material cost premium of 20-50%	Consumer preference, regulatory mandates (e.g., plastic bans)	All takeout/delivery orders (Structural cost increase)