C-store chain RaceTrac, which owns Potbelly Sandwich Shop, said it does not intend to put a restaurant in all of its convenience stores. | Photo: Shutterstock
When convenience-store chain RaceTrac acquired fast casual Potbelly Sandwich Shop in October, some expected there to be a restaurant added to every RaceTrac. However, “that’s very much not the strategic plan,” Jennifer Durham, senior vice president of franchising and development for Potbelly, told CSP Daily News.
That doesn’t mean there won’t be any RaceTrac-Potbelly combos, though. They’re exploring this in places where there’s an overlap of the companies’ customer base, she said.
“We are getting smarter with where those overlaps are, and we are digging into that,” Durham said in a Feb. 12 interview. “But we’ll do it in a really strategic and very careful way, not a broad-brush Potbelly in every RaceTrac type of approach.”
Durham said they are looking at testing a pilot RaceTrac-Potbelly location in Atlanta that would be company-owned before dipping their toes into a Potbelly franchise-RaceTrac combo.
Ultimately, though, RaceTrac intends to operate Potbelly with the same strategy any restaurant operator would follow, with a focus on growing units and sales regardless of store format. Potbelly’s primary goal is to grow to 2,000 locations over the next 10 years, whether that’s through franchised shops, company-owned locations or restaurants in RaceTracs.
Durham’s passion is helping franchisees build their business. She was hired in November to increase Potbelly franchise recruitment; to oversee market planning, real estate, design and construction; and to help Potbelly reach its growth goal. She previously worked for Hand and Stone Franchise Corp., Checkers & Rally’s and Cooper’s Hawk.
Durham started in her role about a month after Atlanta-based RaceTrac bought Potbelly for $566 million. RaceTrac has more than 800 RaceTrac and RaceWay c-stores, mostly in the South and Southeast, although its recently branched into the Midwest in places like Indiana. Potbelly’s 466 stores are more spread out through the United States, from New York to Minnesota to Oregon.
While c-stores often partner with quick-service restaurants, a c-store chain buying one is unprecedented. RaceTrac CEO Natalie Morhous primarily wanted to buy Potbelly to diversify her family business, Durham said. Potbelly was also a brand that Morhous loved from her experience going to college in Washington D.C., which was Potbelly’s first market outside of Chicago.
Potbelly’s growth ambitions
The primary goal in RaceTrac acquiring Potbelly was not so much to gain foodservice learnings from Potbelly but to continue to grow the sandwich shop chain, Durham said. Potbelly generated $560 million in system sales last year, according to CSP’s sister companies Restaurant Business and Technomic. Same-store sales grew 3.6% last quarter, bucking a generally weak trend for industry sales overall.
Currently, Potbelly has about 350 shops on the company side and 120 that are franchised, Durham said. In 2026, the fast casual’s goal is to open 50 more shops (about 15 company-owned and 35 franchise locations) and to do about 50 store refreshes.
“So the strategic vision there was really about, continue growing publicly the way that it has,” Durham said. “If there’s this great synergy from a co-development, that would be a nice added value. If there’s a synergy from shared franchise owners, that’d be a nice added value. If there’s learnings on food and how to execute a great sandwich, then that’s a nice added benefit, but the real strategic priority was on the love of the brand and continuing to grow it the way that we had.”
Combining Potbelly and RaceTrac means better purchasing power for both companies, she said. They also can share customer data and learnings from their loyalty programs to boost both businesses, and learnings on franchising. RaceWay operates as a franchisor, with each location owned by parent company RaceTrac.
Cultures of the two companies are also well aligned, Durham said.
Morhous is a third-generation leader of RaceTrac, and she told Durham that she makes decisions not for today or for tomorrow, but for her children’s children.
“I’ve repeated that many, many times with perspective and existing owners because that’s exactly the way that a franchise owner thinks about their business too,” Durham said. “…And for that reason, I think that there couldn’t be a better parent than RaceTrac, because we’re completely aligned.”
This story originally appeared in RB sister publication CSP Daily News.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.
