Convenience-store and fuel retailer RaceTrac Inc. has entered into a definitive merger agreement with sandwich shop concept Potbelly Corp. through which RaceTrac will commence a tender offer to acquire all of the outstanding shares of Potbelly for $17.12 per share, in an all-cash transaction with an equity value of approximately $566 million.
Potbelly, founded more than 40 years ago in Chicago, offers warm, toasted sandwiches, signature salads and hand-dipped shakes. It has more than 445 company- and franchise-owned shops currently open across the United States and a long-term goal of reaching 2,000 shops.
- RaceTrac is No. 17 on CSP’s 2025 Top 202 ranking of U.S. c-store chains by store count.
The acquisition represents a significant move by RaceTrac, adding another iconic brand to its portfolio. Based in Atlanta, RaceTrac operates more than 800 convenience stores across 14 states under the RaceTrac and RaceWay brands, as well as approximately 1,200 Gulf-branded locations across the United States and Puerto Rico. The family-owned company has been serving customers since 1934 and employs more than 10,000 team members.
“Our companies, combined, have spent over 130 years delighting guests by providing them with welcoming smiles and a place to enjoy life’s everyday moments. We are proud of Potbelly’s legacy as a beloved neighborhood sandwich shop and are excited to expand our family of convenience-driven brands,” said Natalie Morhous, CEO and chairman of RaceTrac. “I’m pleased to welcome Potbelly’s more than 5,200 team members and franchise partners to the RaceTrac family. Together, we’ll serve guests in even more meaningful ways.”
Morhous was CSP’s Retail Leader of the Year in 2023.
With complementary strengths as multi-unit, multi-market consumer facing businesses including core capabilities in real estate, franchising, operations, food innovation and marketing, a combined RaceTrac and Potbelly are positioned to amplify their growth, the companies said.
“RaceTrac’s strategic vision including their commitment to quality align perfectly with our mission to delight customers with great food and good vibes,” said Bob Wright, president and CEO of Potbelly. “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. 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.”
Potbelly generated $560 million in system sales last year, according to Restaurant Business sister company Technomic. Same-store sales grew 3.6% last quarter, bucking a generally weak trend for industry sales overall, Restaurant Business said.
The deal culminates a relatively strong year for Potbelly, which has seen improving sales momentum that has been reflected in its stock price. Shares have been up 37% this year before the deal was announced and 70% over the past 12 months. Its sale price will represent a high point since shortly after it went public in 2013.
RaceTrac made an unsolicited approach to the sandwich company, Wright told the Wall Street Journal, and that the deal came together quickly. He said that Potbelly and RaceTrac would remain distinct brands after the deal closes. “Their strategy isn’t necessarily to put a Potbelly in every RaceTrac,” he said. In October, Potbelly shareholder Immersion Investments sent an open letter to the company’s management and board, urging them to evaluate a sale of the business and other options.
Wright said the investor pressure didn’t affect the decision to sell the chain.
The companies expect the acquisition to close in fourth-quarter 2025, subject to the satisfaction of customary closing conditions and regulatory approvals. Until the transaction closes, both companies will continue to operate independently.
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