Potbelly is being gobbled up by RaceTrac, a southern convenience store brand, in a $566 million acquisition that will take the longtime Chicago-based sandwich chain private.
The all-cash deal, announced Wednesday, will pay $17.12 per share for all outstanding Potbelly common stock, ending its 12-year run as a publicly traded company and nearly a half century as a Chicago-based sandwich institution.
Privately owned and operated RaceTrac is expected to close the Potbelly acquisition in the fourth quarter, pending shareholder and regulatory approval.
The merger would pair two venerable but very different companies.
Potbelly has grown from a single store on Lincoln Avenue in 1977 to a nationwide chain with more than 340 company-owned and 105 franchised restaurants. The chain has stayed true to its roots, serving up freshly made warm sub sandwiches with a casual neighborhood vibe.
But Potbelly has struggled in recent years, downsizing its retail footprint by 5% and shifting its model to more franchise-owned restaurants.
“We have positioned Potbelly for accelerated franchise-led growth in recent years, and this transaction fortifies our path while delivering certain and immediate value to our shareholders,” Bob Wright, president and CEO of Potbelly, said in a news release. “With RaceTrac’s resources, we will unlock new opportunity for this incredible brand while staying true to the neighborhood sandwich shop experience that makes Potbelly special.”
Founded in 1934 as Trackside Stations, a St. Louis gas station chain, the family-owned company expanded southward, eventually relocating to Atlanta in the 1970s, where it was rechristened as RaceTrac.
Still family-owned, RaceTrac operates more than 800 convenience stores across 14 states stretching from Florida to Indiana. While there is some overlap, the company’s retail footprint will expand significantly with the Potbelly acquisition, which has stores in 30 states and Washington, D.C.
“We are proud of Potbelly’s legacy as a beloved neighborhood sandwich shop and are excited to expand our family of convenience-driven brands,” Natalie Morhous, CEO and chairman at RaceTrac, said in the news release.
Combining an urban sandwich shop with a southern convenience store may seem unusual, but some analysts believe it could benefit both companies.
One area of potential growth is likely embedded Potbelly restaurants popping up in RaceTrac stores down the road.
“It would give them a great synergy that would justify an acquisition,” said Darren Tristano, CEO of FoodserviceResults, a Chicago-based research and consulting firm. “When you think about convenience stores, you think about pizza, fried chicken and sandwiches. There’s a good opportunity to really push the sandwiches in a more branded fashion, and not just private label within the convenience store.”
As for Potbelly, it would be a less expensive way to expand into new markets and build up demand, Tristano said, potentially creating an opportunity for stand-alone restaurants to follow.
At the same time, he expects that the number of stand-alone Potbelly stores may initially decline after the merger is completed.
“Whenever brands are acquired, they are going to look at which stores are underperforming and likely shutter some of them to build better profitability,” Tristano said.
Potbelly’s stock price rose by more than 31% on the merger news Wednesday, gaining more than $4 to close at $16.98 per share.
rchannick@chicagotribune.com
Originally Published: September 10, 2025 at 10:12 AM CDT