Potbelly Corp. (NASDAQ: PBPB), parent of the Chicago, Illinois–based restaurant chain Potbelly Sandwich Shop, plans to enter the Syracuse market this year and is currently reviewing franchisee inquiries. 

 

The company announced its plan in a March 19 email message to CNYBJ and in a news release dated March 30. 

 

Potbelly is targeting Central New York for expansion because of its mix of attractive residential and “growing” business communities, according to the company release.

 

The chain, which offers made-to-order sandwiches, salads, soups, chili, and breakfast, is also targeting other upstate markets, such as Rochester, Albany, and Buffalo.

 

Potbelly Sandwich Shop currently operates more than 15 eateries across the New York City metro area.

 

Potbelly, founded in 1977, currently owns and operates more than 300 shops across the U.S. and has more than 20 franchise shops domestically and internationally. It generated $327 million in revenue in its 2014 fiscal year, up 9 percent from $300 million in the prior year, according to the company’s Form 10-K filing with the U.S. Securities & Exchange Commission, dated Feb. 25.

 

Aylwin B. Lewis is the company’s chairman, president, and CEO.

 

The company started as a “quiet antique store” that turned into a “happening sandwich shop,” according to its website. 

 

The antique store sold potbelly stoves.

 

In 1996, Bryant Kiel bought the original store on Lincoln Avenue in Chicago. Kiel is now the company’s founding chairman. 

 

Franchising

For its franchise business, Potbelly is looking at smaller to medium-sized markets, says Rick Fossali, senior director of domestic franchising for Potbelly Franchising, LLC, the franchising arm of Potbelly Corp.

 

“There’s a lot of those types … of cities and towns in upstate New York,” he adds.

 

Fossali spoke with CNYBJ by phone from Chicago on March 31.

 

The company also likes the presence of schools like Syracuse University, he says.

 

“The college towns tend to be areas that really support Pot Belly as the neighborhood sandwich shop, the type of environment that we have, the live music,” says Fossali.

 

When asked about the size of the local territory for a franchise agreement, he notes the company is still “putting that together.”

 

Potbelly hopes to find an ownership group that would want to open “multiple units,” he adds.

 

“That would be the best thing we believe for our business … people that have [an] understanding of operating in this type of environment,” says Fossali. 

 

Potbelly currently has single-unit franchisees and others who operate multiple stores and want more.

 

Fossali just wants to find the “right” franchisee who understands what it means to be “part of the neighborhood,” he says.

 

When asked if anyone from Central or upstate New York has inquired about a franchise agreement, Fossali says, “We have received other inquiries, some that 

included discussions about Syracuse.”

 

He declined to disclose the specific number of inquiries Potbelly has had about a local or regional franchise agreement.

 

Once chosen, the franchisee is responsible for providing Potbelly suggestions on the best sites for opening a location, says Fossali.

 

A new Potbelly Sandwich Shop location typically creates more than 40 jobs, the company said. 

 

Costs

A Potbelly franchisee can expect to make a total estimated initial investment of between $469,000 and $794,000, according to its website.

 

The company’s franchise fee is $40,000.

 

Potbelly also has an ongoing royalty fee, but Fossali declined to share the figure. The franchise agreement continues for 10 years, and a franchisee is able to 

renew the agreement, he adds.

 

When asked about a franchisee’s required net worth, Fossali said, “It varies based upon the individual.”

 

Potbelly provides a training program for a prospective franchisee or someone that the franchisee designates, says Fossali.

 

“They can send up to four people through that training program,” he adds.

 

The company also provides marketing support for franchisees, includes details for a formal opening once the store begins operations.         

 

Contact Reinhardt at ereinhardt@cnybj.com

 

 

 

 

 

 

 

 

CLAY — CORE, a new fast-casual, “active lifestyle” eatery, plans to open April 23 at the former location of Jolime Fresh Garden Café in the town of Clay.

 

The opening of CORE at 7265 Buckley Road, its first location, follows renovation work at the former Jolime, which closed late last year.

 

The eatery’s owners announced the upcoming opening in a news release issued March 30.

 

The Caveny family joined Larry Wilson and Todd Mansfield in announcing late last year that they would transition the Jolime location to create a “unique active lifestyle” restaurant with plans to add additional locations. 

 

The news release described Wilson as a “successful entrepreneur and restaurateur” and Mansfield as a “medical-industry veteran.” 

 

Wilson, also described as a “long time friend” of the Caveny family, owns more than 25 Moe’s and Hoopla! restaurants throughout New York, Pennsylvania, and Maryland, according to the release.

 

They created CORE to offer quick meals for lunch and dinner featuring “unprocessed ingredients that enable peak performance.”

 

“For years, we have demonstrated a commitment to preparing our creations with fresh, local ingredients. We look forward to taking that to the next level with CORE,” John Caveny, co-owner of Jolime Fresh Garden Café, said in the news release. Jolime currently operates eateries in downtown Syracuse and Clay (North Medical).

 

The Clay location for CORE is the first of many that the ownership group has planned. 

 

“Our goal is to bring great, healthy and clean foods to as many communities that will support our concept,” Wilson said.

 

The CORE menu features “healthy, hearty simple” meals based on leafy greens, whole grains, and “slow simmered” bone broths. 

 

The customer can choose from seasonal vegetables, crunch toppings, and “sustainably raised” meats in their entrées.           

 

 

The New York State Department of Financial Services (DFS) is calling on insurance companies to “strengthen” their cyber-hacking defenses.

 

Benjamin M. Lawsky, superintendent of financial services, in February announced a series of measures to require insurers to take stronger steps to ward off cyber hackers.

 

In the coming weeks and months, DFS will integrate “regular, targeted” assessments of cyber-security preparedness at insurance companies as part of the department’s examination process. 

 

It’ll also put forward enhanced regulations requiring institutions to meet “heightened” standards for cyber security; and examine “stronger” measures related to the representations and warranties that third-party vendors send insurance companies.

 

“Recent cyber-security breaches should serve as a stern wake-up call for insurers and other financial institutions to strengthen their cyber defenses. Those companies are entrusted with a virtual treasure trove of sensitive customer information that is an inviting target for hackers. Regulators and private-sector companies must both redouble their efforts and move aggressively to help safeguard this consumer data,” Lawsky said in the news release.

 

DFS conducted a survey with a focus on cyber security involving a “significant cross-section” of its regulated insurance companies. 

 

A total of 43 firms, with combined assets of about $3.2 trillion, completed a survey seeking information about each participant’s cyber-security program, costs, and future plans.

 

The department’s analysis of the insurers surveyed found that a “wide array” of factors, not just reported assets, affect the “sophistication and comprehensiveness” of the insurers’ cyber-security programs. 

 

The DFS “did not necessarily find” that the largest insurers had the “most robust and sophisticated” cyber defenses, even though that “may be expected,” according to its news release.

 

Letter to insurers

The DFS has also expanded its information-technology (IT) examination procedures to focus “more attention” on cyber security.

 

That’s according to a March 26 letter that Lawsky wrote to insurance executives and that the department posted on its website.

 

DFS will add new questions and topics to its existing IT exam, including the reporting structure for cyber security-related issues; management of cyber-security issues, such as the interaction between information security and core-business functions; and resources devoted to information security and overall risk management, according to the letter.

 

The letter also listed additional topics.

 

DFS said it would schedule IT/cyber-security exams after conducting risk assessments of each institutions. To help in the assessment, DFS asked insurers for a report with several pieces of information.

 

They include the job description of the current chief information security officer, that person’s training, and organization chart for information-security functions.

 

DFS wants the report to describe how the organization maintains information-security policies that address “confidentiality, integrity, and availability,” the letter said.

 

The department asks insurers to identify and describe their use of “multi-factor authentication for any networks, systems, programs, or applications,” according to the letter.

 

Insurers should describe their incident-response program, including how incidents are “reported, escalated, and remediated.”

 

DFS also wants insurance companies to describe any protection they use to “safeguard” sensitive data that is “sent to, received from, or accessible to” third-party service providers, such as encryption or multi-factor authentication, according to the letter.

 

In total, Lawsky’s letter listed 16 pieces of information the DFS seeks in the requested report.