I can see it there. I can see it. You're in the right spot. If people can't see me, they I can see it there. I can see it. You're in the right spot. If people can't see me, they I can see it there. I can see it. You're in the right spot. If people can't see me, they I can see it there. I can see it. You're in the right spot. If people can't see me, they can see you. You're in the right spot. You want to—you want to stand? No, I didn't. We can stand and rotate. We're good. We're the last one. We're the last ones in the audience. We just couldn't see everybody. I'm so trapped with my cord. I'm seeing my phone. I won't hurt it, I promise. Can you see better? I can. Yeah, I can see better. All right. Yeah. We got it in front of us. We can see it enough, yeah. We don't know it by now. Hi, good afternoon. I'm Sharon Zackfia with William Blair. Really happy to have the Potbelly team here with us today. For those of you who haven't followed the Potbelly journey, we've got a management team here that's brought the company to some of the best metrics we've seen since the company went public. Maybe most exciting is that there's a real burgeoning franchise pipeline here, which can really transform the company over the years to come into one that's much more asset-light and higher return in addition to this very healthy company-owned seed that the company started with. Before handing the podium—but I'm actually going to hand the table over because it looks like it'll be at the table—before handing it over to the team here, I do need to tell you there's a complete list of research disclosures and potential conflicts of interest at williamblair.com. Thank you. Thank you, Sharon. Welcome, everybody. Glad you're here with us. I know we've got some time—the breakout session is actually in the same room—so we'll go through our presentation, and then if you have questions at the end, we'll be able to stick around and help you with any of those questions. My name's Bob Wright. I'm the CEO and President of Potbelly. I've been with Potbelly for almost five years now. This is my 38th year in the business and have only been here for five years, but I've loved this brand since I first met it about 25, 26 years ago. I've enjoyed every step of the process, and we're going to take you through a little bit of our story that goes back mostly three years, but a little bit of that history that we have together. I was fortunate that Steve was here when I arrived back in 2020. He'd already been here for a few months, so I'll let Steve introduce himself. Sure. Hi, everyone. Yes, I started my relationship with Potbelly in the early 1990s at that Lincoln Avenue shop, which many of you may have experienced at some point here in Chicago. I haven't been in the restaurant business as long as Bob. I've been in consulting and prior to that retail, but spent some time at McDonald's and Panera prior to joining Potbelly. The last five years running through the pandemic, now into this big growth phase for us, has been really exciting, and we're looking forward to sharing with you some of that story and where we're headed. Yeah, thanks. Welcome to Potbelly today. We're in Chicago, so I assume many of you, if not all of you, are very familiar with our brand and love the brand. We have that in common. I will tell you, when I enter an airplane and someone sees this lapel pin on my jacket or I'm traveling somewhere on business, if they spot the logo and recognize it, the response or the unsolicited comment is 100% the same thing every time. "I love Potbelly." The next thing that someone that says that wants to do is tell me why they love Potbelly. We'll talk a little bit about that as we go through. That is a very special and unique element to have that kind of brand cache and those kind of core equities built in. Today, I said Potbelly today. I would describe us as a fast casual restaurant concept with a sandwich-based menu. I often complete that sentence by saying, "In a sea of sub shops." It is a very different sandwich experience. We answer a lot of investor questions about how do we compare to all of the other sandwich players. We do. We pay very close attention to that. Potbelly is a unique brand. If you do not know us very well, I think that is an important basis of understanding as you think about the investment opportunity at Potbelly. Really strong heritage. We were a single location for 20 years. Lincoln Avenue was the first location right here in Chicago. Twenty years later, the founder, Peter Hastings, sold that to the gentleman we call our founder, Bryant Keil, who developed the chain, starting in Chicago, then into Washington, DC, and then across the country, as you see on the map there. At the end of Q1, we had 444 locations that were open. We had 766 open and committed locations. By the end of Q1, we broke 100 franchise locations, 103 open operating franchise locations. It's all about the food. It's all about the experience. Everything about Potbelly is a cut above from a quality perspective and differentiated in a lot of ways. From an investor perspective, we actually think our investor thesis is rather straightforward. We are, after starting together, Steve and I in 2020, which was kind of a phase of saving the company with the cash losses and the profitability challenges that the company was enduring, into what we call our turnaround phase. Today, I can proudly say we're a growth company. I think that's really important from an investor perspective to look for the proof points even throughout today's discussion that that's what we are. Some of the things we would point to of late that are evidence of that is our menu innovation, the product innovation, the excitement around the food. As I mentioned, it's the core of the sandwich experience for our customers. We've had some amazing things that we've added to the menu. I'll talk about those a little bit later. Industry-leading digital platform in this space. That's the consumer-facing digital platform, the app, the web, the tech stack that sits underneath that, certainly the MarTech stack and so on that goes into it, and especially our Perks loyalty program, very important to the business. In addition to the consumer-facing digital work, there's this off-premise business for us. Our CMO likes to call it the digital Potbelly shop that goes with the actual Potbelly shop. There are so many combinations of ways that you can order and experience Potbelly, and we've leaned into all of those over the last five years to create a ton of growth for us. Especially, look, with the success at the unit level, the top-line sales growth, margin expansion, it's all about franchise growth going forward to achieve that 2,000-unit target that we believe in. The story is a great story. The numbers, even if you just look at the past three years, just really impressive results that I know our team is super proud of. System sales growth of 34% in that three-year period of time, almost 700 basis points of margin expansion at the shop level. When we still own most of our shops, that's obviously a big profit driver for us. Open and committed locations up 64% in three years. That's that proof of the franchise sales machine. 400 basis points of digital growth at 42% of our business now comes through digital channels. Adjusted EBITDA from basically zero all the way up into the $30 million range. That's last year. Quite a bit of growth, and we're very excited about those numbers. What I opened with was the who. We just talked about a little bit about what we're doing. This five-pillar strategy you see in front of you is the how. It was 2020. It was the end of 2020 when we developed this five-pillar strategy, and it hasn't changed. The foundation that you see on the screen where we state our mission and our vision is rooted in the brand itself, the belief that this brand is special. If you've got a special brand, you can build growth initiatives on top of that brand that can grow the company itself and for the benefit of everybody involved. Our unifying objectives across the top help our team stay crystal clear on what we're trying to accomplish: traffic-driven profitability and unit growth, sales, profits, and unit growth. No one is lacking understanding on our team anywhere in the organization about what we're really up to. That alignment's really important. Even our incentive programs are tied to that. Now, if you've ever been to a restaurant or you've heard about restaurants or you've covered a restaurant company before, the five pillars probably look like platitudes to you: great food at a great value, really great people serving our customers well, having experiences that bring people back, "Oh yeah, digital and franchise growth." That is true. What I'll cover for you in the next few slides are some strategic initiatives that underpin those and some of the more recent strategic initiatives that continue to deliver growth. The only thing I'd add sort of qualitatively is that those are statements I've been making for five years. This is the strategy. These are the things we're doing for the strategy. I believe that you've been able to look back over time and see that we've done what we said we were going to do, and we continue to have new and additional incremental ways to build these five pillars and keep growing the company. I mentioned a few of them already. I tell you, it's a real gift for us internally as a management team and for all of our organization to not change strategy. There's a lot of focus here. That strong menu innovation that I talked about, we rebuilt the menu back in 2021 because we had a value problem. Then comes LTOs. More recently, we've unlocked a completely different stage gate development process under the leadership of our CMO to develop menu enhancements that are permanent menu enhancements. Most of what you see on the screen are permanent menu enhancements for us. This started back last fall with the Tractor Beverage partnership. We're a craft refreshers looking for and delivering incremental beverage incidents, especially in a dispensed beverage that's not a carbonated beverage. If you're not familiar with Tractor, we're one of the two bigger chains that have Tractor beverages in them, including Chipotle and Potbelly. Really proud of that addition. Next comes the Sweet Heat Pork Barbecue sandwich and the Cubano sandwich and four sauces that were rolled out at the same time. That kind of came next. If you haven't had our pulled pork sandwiches, the Cubano was an LTO, so we knew that was a hit. We actually have a third pork sandwich that's on the underground menu. This is the addition of a new whole muscle protein, further elevating the quality of the brand and bringing in traffic. It's also a fairly reasonably priced protein for us. From a margin perspective, we like that too. The most recent one that we're super excited about is our steak sandwich, our Prime Rib Steak Sandwich that just recently rolled out. We couldn't be more pleased with what that's doing for breadth of appeal for the brand and for what the customers have to say about when they come in and certainly what we're seeing in the mix. We haven't published any mix numbers on it yet, but I'll just say we're very, very pleased. This focus on the core menu and filling in what were identified as core gaps in the menu has rung the bell with our customers in a big way. Even the more recent add of our Banana Pudding Shake has moved up to one of the top-selling shakes. Now, great food is great. Remember, the first pillar is great food at a great value. Now, as I mentioned, I've been in the business for a long time. A lot of that business was in pizza and QSR. When you think about value with that historical context, you think about price-pointed, discounted value. Oftentimes, even when you think about value menus in QSR, it's always about the price. It's always about the cheap food. That is not how we think about value at Potbelly. We have a three-layered value approach that is really important. Frankly, I think it's unique to how we think about presenting what we present to the customer. Number one, and the most important layer of value is actually how you all react to restaurant experiences across the board. That's the intrinsic value of the menu itself. If I pay full price for food on the menu, is it great food? And did I walk away feeling like I didn't get overcharged for that food? If you don't have that and you're relying only on discounts to drive customers into your restaurants, you're going to have a hard time building long-term growth. Think about the menu innovation not only as advancing the menu itself, but pushing value even farther. There is everyday value. We talked a lot last year about our $7.99 combos. We have three sandwiches that we sell in a skinny size that are $7.99 for the sandwich, the drink, and the chips. Pick Your Pair is actually a bigger everyday value option for us than even the $7.99 combos, getting a salad and a sandwich and so on. Of course, the third layer of value is promotional value. This is where our perks program really sings because we can deliver promotional value to customers that rings true for them in their experience rooted in what we know about how they use the Potbelly brand. Just know that there's a lot of effort and a lot of science that goes into that. Now, our customer-facing digital platforms, we actually own our own code. We developed our own app, our web, and the platform and the MarTech stack that sits under it. We have shared publicly in the last few months that we're actually rebuilding that. It's hard to believe that something that's four years old is reaching end of life. I'm glad that doesn't apply to everything. With technology, that can be the case. We are replatforming our app and our web, and that's coming this summer. It's going to unlock some—first of all, it will eliminate some friction points that exist in today's app and web that really, candidly, weren't friction points four years ago. It will unlock opportunities for additional growth. There'll also be layers of the MarTech digital stack that we can put underneath that that can really help us continue to use digital as a growth driver for us and make our digital assets all the more relevant for our customers. Now, once you put that digital-facing consumer out there, how do people interact with the shop? How do they order their food? How do they get their food delivered? Are they using catering or digital pickup? Are they doing some of both, ordering for digital pickup or grabbing the bag and sitting down in the dining room? The fact of the matter is we want to be a great choice for all of those variations of engagement. I think that we are. One of the things that we're also investing in this year and next year, by the end of next year, this will be in 100% of our locations, is what we call PDCX. That stands for Potbelly Digital Customer Experience. You see it on the bottom of your screen. It is a multidimensional restaurant-level technology package that allows us to do all of these things like first-party delivery and digital pickup and so on far, far better. It also allows us to bring some digital components into the in-shop experience. This is the new POS. It is a kitchen display system. It is the customer display for all the digital interaction that they have. It's handhelds that allow us to do some other things in the shop that we aren't able to do today. Big investments in this area of digital. When it comes to growth, you hear us use this term open and committed. Our desire is to have you understand that in addition to the growing open units that we have, there's a pipeline of committed units that back up the future opens that are coming for us. Steve will cover our guidance in a minute, but we talk about unit growth rates in the low double digits in our long-term growth algorithm. The belief in that is rooted in the franchises that we're selling. 766 open and committed locations, 322 of those are committed and not yet open. We talked last quarter, 70% of our franchisees are developing franchisees with commitments to develop. That is an enormous number and a percentage of our base that you will not find in a lot of other franchise brands. We are super proud of that. You will also see the green bar continue to grow because that is where we are growing, in the franchise growth that will lead our total unit growth overall. As a team, honestly, we are very proud of our franchising team. We know that, and we know this too, franchisees are paying closer attention to the comments I just made than they are what we are doing with growth. They are looking at volumes. They are looking at investment costs. They are looking at expanding margins. They are looking at us minding the store with the brand, with food and value, and initiatives around development and so on. That's exactly why this map looks a little different than the map you saw on the first slide. Very quickly, I'll orient you to this. If it's a gold state, that means we have open and operating businesses in that state. They can be company or franchise, but that means Potbelly has a presence in that state. A green state has development commitments in those states. Of course, the striped states have both. You can see that we're really starting to expand and broaden the footprint both of development and of existing shop development. This penetration that's going to continue to creep across the country is really important and exciting to us. Franchisees are wonderful parts of the restaurant business. They have a very straightforward way of thinking about looking at whether or not they want to be a part of a brand. What our franchisees are telling us, both those that are in the system and the candidates that are joining the system, are saying, "First of all, your unit-level economics are really attractive. We love that you're taking care of things that make our future better, like re-engineering the prototypical design, making it a little bit smaller, bringing down the occupancy costs, making it more efficient and digital-centric." Certainly, this sales team that you have, they're not overpromising, but they're shepherding us through the process. We have a high-touch development model as well from real estate to engineering, design, construction, and even opening support. We've also scaled that. In your first two or three units, you get an even higher version of that touch and support from the brand, and then you're on your own as the training wheels come off and you develop from there. I think I'd leave you with we have a very clear line of sight to the at least 38 units that we said we would develop this year. So that's a bit of our story as it stands today. I'm going to let Steve share some of the financials with you and a little bit of the history there too. Yeah. Thanks, Bob. I wish I had some mouthwatering sandwiches on my slides, but I get mouthwatering bar charts that go up and to the right. For some of you, that might be more exciting than the sandwiches. Look, this is a growth story, as Bob mentioned. It is a growth story that is driven by the work that is done on the menu, on the digital side. Importantly, as Bob just finished, franchise unit growth. We start to mark ourselves in terms of system sales, right? That is going to show up more important over the coming years as we open more franchise units. You can see the impact of this. These are quarter one numbers over quarter one numbers. You can see that move from quarter one 2024 to the last quarter we just finished. That's 7% of system sales growth, but that's 24 units that we have put in place over that same period of time. With 38 units coming on this year, you'll continue to see these system sales grow. In fact, we had this conversation earlier. When we fulfill our 2,000-unit potential here in the United States, we're just north of $500 million in system sales right now as we finished last year. 2,000 units at the economics that we've got with a little bit of inflation added puts us well into the $3 billion range for system sales. That for us is incredibly exciting as we continue to push growth through our franchising model. Now, in terms of the unit economics, Bob mentioned that a little bit. This is our unit-level average weekly sales for our company shops. And again, a similar story of growth here. This is about over the two years, 3% growth at a unit level. You can see we've had some tremendous kind of same-store sales in some of these years. What's not on the chart is what we did over the last couple of quarters, right? Last quarter, we finished at a positive same-store sales for Q4. We finished positive same-store sales in Q1. This momentum is in the business, this growth momentum. What's really critical, though, in terms of building average weekly sales is a lot of the things Bob talked about, menu innovation, the digital side of things, etc. Also, we're not competing in a vacuum here. We always mark ourselves against our competition. For us, that's fast casual. For the last three quarters, we've taken fast casual share on a same-store sales basis, right? Our same-store sales are surpassing those of the fast casual industry. Similarly on traffic, right? Same-store transactions for us have surpassed that of the fast casual industry. Not only are we putting units out there, but we're also within the boxes that we have, producing better performance quarter over quarter. These things are starting to work together for us in a meaningful way. Look, we always want to mark ourselves by how much profit we're making. Part of that engine, right, is the economics that happen at the unit level. This is our shop-level profit margin, again, kind of taking a quarter one versus quarter one versus quarter one view. What's exciting to see is we've got margin expansion. That's been a hallmark of this management team, to always push and expand margins. If you want to look at it on an annual basis for some of the same timeframe, we finished 2023 with a 14.2% shop margin. We finished last year with a 15.3% shop margin. In fact, our quarter four last year was around 15.7%, right? You can see that the business continues to be more profitable. Now, we've discussed in the past how high can high be. We think we can get, and we will continue to push ourselves beyond 16% and into the high teens. That's where we believe the potential for this brand can be. We're not guiding to that, but as we endeavor to push this business, we believe we can do it that way. I think also what's important to note here is what drives this shop margin expansion and why do we think there's confidence that we're going to continue to expand it. One is top line. We just talked about how we're going to continue to push sales through some of the innovation that Bob discussed earlier. There is a lot of work that goes on beneath that top line growth, right? Our operations team is tirelessly working on building efficiencies into the business. Our base labor guide continues to get more effective and more efficient for us. We do not always give a lot of attention to the HR side of things, but one of the things that also helps our labor line is we have some industry-leading turnover rates. We are in the top quartile for having low turnover in our shops. That is an important component too that helps aid shop margin. The other thing that will help benefit margin is as we grow top line, we get leverage on the occupancy line and so forth. What you do not always see or hear about when you look at our financials is our shop profit, as we stated here, is company shop profit. We have still got some high rent. We have got some high rent markets that we are in. Chicago is one, DC, and other places. Our occupancy line is almost 11%. It is like 10.8% is our occupancy percentage. If you look at what our franchisees are putting in place, they are building more in the suburbs and in different locations. Their occupancy rates are kind of in that 7%-8% range. If you apply that to this shop margin level, you can see the potential for continued expansion with Potbelly. Another thing to mention in terms of that middle of the P&L for us is additional efficiencies. Bob mentioned PDCX, Potbelly Digital Customer Experience. We know we get efficiencies out of that, not just through throughput, but we also save on labor. These are things in addition to just kind of pushing that customer-facing side of things that are going to drive profitability for this business into the future. As we have discussed in the past, right, we had our Q1 call in May, and we put our guidance out for Q2. I'm excited to let everyone know that we're performing against this range, and we're leaving it in place. The business continues to perform strongly, and we'll keep this guidance here at 1.5%-2.5% same-store sales growth, and then EBITDA in the $8.25 million-$9.75 million range. We didn't guide to it, but we mentioned it on our earnings call earlier, is unit growth, right, of six new units in the quarter. Again, not a guide, but you can hear it from my commentary that we have confidence, right, in the way that we're delivering against the quarter. That confidence for the quarter, I think, continues to translate into the way that we think about not just our annual guidance, but also then into our long-term growth algorithm. Similarly, with quarter, we have things that we can see and things that we're excited about that we're not talking about today in terms of what lies ahead for us in the year in terms of new menu items. Potentially, we got this digital refresh that's coming up and things that are going to contribute to this delivery of the 2025 guidance. Of course, if you're thinking about Potbelly and how we will look and continue to look as we grow this business, right, same-store sales growth in the low to mid-single digits is inclusive of us not just driving same-store sales. It's inclusive of driving traffic, right? We're in a traffic-building business, as our five pillars would suggest. That's the goal, right, is traffic-driven profitability. Our new unit growth is the engine that drives those same-store sales going forward. Once we continue to push into that double-digit range, I think our 38 puts us close to 9% for this year. This double-digit unit growth is right in front of us. As well, all that translates into an asset-light model, high-margin franchise business. Our EBITDA growth rate in the low to mid-teens is also something that is something we're pushing for and have line of sight into. We're excited about the future. We're excited about the growth that lies ahead. As Bob started out the conversation, this growth story has a few chapters in it, right? This menu innovation piece where last year it was sauces and pork as a new platform. This year, so far, it's been Chili Mac and Banana Pudding Shakes and this incredible Prime Rib Steak Sandwich. If you haven't tried it, you really have to go try it. We're excited about how that's performing. With our digital platform, again, 42% of our business is digital now. When I started at Potbelly kind of right at the beginning of the pandemic, it was 9% of the business. This is a massive change in the business model. We found that most of this business is incremental and will continue to meet the customer where they want to with the features and functions that they want to. The exciting thing about the digital piece for us is not just customer-facing things that we get to share with you all and that you get to hold in your hand and at your keys. It is also the analytics that go with that too, right? And our ability to provide more segmented, more targeted, more relevant communications and offers to our customers. That too is a layer of growth for us here. The off-premise offering, as I mentioned, with digital, much of that digital growth has been this growth in delivery and this mobile order and pay and a pickup channel for us. We will continue to invest in that because it continues to grow for us. Franchise growth, again, that is the key. That's the future. That concludes our prepared remarks. When the deck is published, there's some additional financial information in the appendix. Feel free to take a look at that. Happy to be with you all. I think since we're going to stay in the same room for the breakout session, we can go into that, right, Sharon?