The remaining $34 million will be used to repay borrowings under the company's credit facility and for working capital and other general purposes, it said.
As of Sept. 23, Potbelly had a total of 295 shops in the U.S., six of which are franchised. Potbelly also has 12 franchised shops in the Middle East.
Potbelly plans to continue opening stores, with 32 to 35 new stores by the end of 2013. It plans to grow stores by roughly 10% on an annual basis, maintain margins above 20% as the company grows and maintain "general and administrative expenses under 10% of revenue," the filing said.
Seeing that it plans to expand mainly through corporate locations, bankers -- and investors -- are eyeing the dollar signs. Corporate-owned locations means that sales revenue (as opposed to just royalties) goes directly to the parent company."A corporate-owned brand could probably go to an IPO quicker than a franchised brand," said Paul Segreto, president and CEO of Franchise Foundry, a franchise consulting firm. Companies are "more attractive to investment bankers ... with more corporate-owned locations." Franchised companies would need to see significant royalties in addition to a bigger bottom line on the balance sheet to appeal to bankers and private-equity firms, Segreto said, which means at least 500 locations or more. Chipotle (CMG) and Starbucks (SBUX), for instance, have mainly corporate-owned stores; Panera Bread (PNRA) is split between corporate-owned and franchises. Chipotle's stock is up 43% this year; Panera is up just 1.2%. Investors Are Hungry for Potbelly Potbelly is "multiple times oversubscribed to a very strong retail and institutional book," said Scott Sweet, senior managing partner of IPO Boutique. "This is -- without question -- the deal of the week," he said, although it doesn't quite have the demand of fast-casual chain Noodles (NDLS), the last restaurant deal to come to market in June. Noodles' stock is up 12% since its first day of trading on July 1. Potbelly will also have to surpass the strong first-day performance of Burlington Coat Factory (BURL), whose shares soared 47% on Wednesday, its first day of trading, above its IPO price of $17 to close at $25.01.
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