This Beloved Sandwich Chain May Be Closing for Good
Potbelly Sandwich Shop announced recently they are considering permanently closing 100 out of almost 430 stores because of low sales. The move would be similar to other chains and regional restaurants that struggled during the coronavirus pandemic.
Now they are taking strides to prevent filing for bankruptcy. Hiring a restructuring consultant, as well as a bankruptcy attorney, are just two of the steps the sandwich chain has taken against closing, according to Restaurant Business. The company did deny any engagement in one specific restructuring advisor, but they still made it known about their lack of cash flow, says Adweek.
Although sales are starting to increase little by little, the company might actually have to declare bankruptcy in order to terminate some of the leases for the locations set to close. The Chicago-headquartered restaurant currently has over $200 million in lease agreements to cover.
The sandwich chain decided closing 36 locations in March when stay-at-home restrictions began was a good strategy. Employees were furloughed and 25% salary cuts were given to executive and corporate workers. Yet, the toll the pandemic took on the restaurant industry still hit them hard.
They're not the only ones facing this dilemma. Burger favorite Red Robin closed 35 locations because of COVID-19. They also decided to keep the limited menu used for takeout orders when dining rooms open. Over 50 items were removed to simplify operations, as sales fell over 30% compared to last year. Hotel restaurants and bars also suffered similar profit losses. Both fell over 60% as hotels saw fewer and fewer guests stay.
One thing that is helping some restaurants stay afloat? Meal deals. Both KFC and Pizza Hut actually saw sales increase during the pandemic. Buckets of chicken and Pizza Hut's Big Dinner Box feed multiple people for cheap and can be picked up in a drive-thru.
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