Perhaps it would be fair to speculate that were it not for the changing dietary habits of Americans and surprise arrival of a global pandemic, Steven Cirulis would likely not be occupying the CFO office at Potbelly Sandwich Shop.
The pursuit of new alternative proteins inside the land of agtech has in recent years led more than few venture capital firms to seek out the advice of strategy executives familiar with the mathematics behind the evolving menus of fast dining establishments.
Having held a succession of top strategy roles with the likes of McDonald’s and Panera, Steven Cirulis found his budding popularity within the VC community to be little more than a rewarding satisfaction—that is, until late 2019, when he decided to put some of his VC-related activities aside to accommodate an advisory gig with publicly-held sandwich shop Potbelly.Read More
“They had been looking for a CFO at the time, but I was really enjoying my work on the venture capital side of things,” recalls Cirulis, who adds that the arrival of the pandemic changed everything.
“I ostensibly became the person whom they turned to and asked, ‘Okay, what do we do here?,’” continues Cirulis.
Within the next several weeks, he busily implemented a list of cash preservation edicts, triggered the renegotiation of bank covenants, and—along with Potbelly management—announced a pay cut, instituted an employee furlough, and applied for a PPP loan.
Along the way—perhaps not more than a month into the pandemic—Potbelly proposed to Cirulis that he join the company as CFO and chief strategy officer.
“Why would you join a restaurant business at the start of a pandemic?,” rhetorically reflects Cirulis, in highlighting but one of the queries that crossed his mind at the time.
Nevertheless, Cirulis tells us, “I jumped at it.”
Three years later, with the virus now in the rearview mirror, Cirulis makes it clear that the pandemic will never fully escape his view: “Getting forgiveness on that PPP loan was a great day in my career as a CFO.” –Jack Sweeney
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CFOTL: Tell us about Potbelly … what does this company do, and what are its offerings today?
Cirulis: Our origin story is really kind of fun. It started in 1977—really, out of an antique shop on the North Side of Chicago—when a guy by the name of Peter Hastings came to the realization that while perhaps he couldn’t move his antiques that quickly, maybe he could at least satisfy his store visitors by serving them some sandwiches. So, that’s what he did—and what ended up happening was that he started selling more sandwiches than antiques. That shop on Lincoln Avenue here in Chicago is still open. In the 1990s, a gentleman named Bryant Keil came along and happened to see the potential of this great brand. He’s really whom you might in some ways call the Ray Kroc of Potbelly, inasmuch as he took the business and built it up into the multi-hundred-unit operation that exists from coast to coast today. Right now, we’re at 372 shops, about 90% of which are company-owned.Read More
What really makes Potbelly interesting and different is that it focuses on hot sandwiches. Sandwiches are one of those categories where the barriers to entry are not great. It’s not hard to make a sandwich. It is hard to make, I think, a sandwich that people love and come back for and that becomes beloved. We toast our sandwiches, every single one of them. We don’t offer cold sandwiches. We also serve these sandwiches with a verve and a style and a service model to which we refer as “delivering good vibes.” If you go into one of our shops, it kind of feels a little bit like an antique shop. At the same time, though, it feels very unique to the environment and city that you’re in—very much like a neighborhood sandwich shop. We take this seriously, as it’s a big differentiator for us.
There are a lot of sandwich shops from which people just want to pick up something to go. We occupy this unique space in fast casual that’s both a destination and a place that makes food that people crave. Look, I’ve worked at McDonald’s, I’ve worked at Panera, I’ve worked at Gap—and Potbelly is the only place that causes people to universally say, once they find out that I work here, something nice about it, something great. “Oh, I love their sandwiches” or “Oh, I’ve been to the first shop.” Right? With McDonald’s, I would hear this, too, but also sometimes people would just remain silent. So, Potbelly, I think, is a really unique brand that has massive potential.
Potbelly | www.potbelly.com | Chicago