- Adam Noyes, long-time executive at Checkers Drive-In Restaurants, joined Potbelly as its new chief operating officer last Friday, the company announced in a press release Tuesday.
- Noyes spent 28 years at Checkers, most recently as its chief administrative officer and executive vice president, according to his LinkedIn profile. He has also held roles in restaurant and company operations and the supply chain team. Before joining Checkers, he worked in operations at McDonald's for almost six years.
- In his new role, he will focus on staffing, training and employee development as well as focusing on top-line growth, improving speed and throughput inside its restaurants and through its digital channels, growing in-restaurant margins and ensuring franchise operations integration.
Potbelly faced financial turmoil this year due to a sharp drop in sales following the onset of the novel coronavirus pandemic, and Noyes' appointment comes less than two months after Potbelly tapped Robert Wright as new president and CEO and four months after it appointed a new CFO. In March, its same-store sales declined by 68%, which has then narrowed to a percent decline in the mid-20s by June. The sandwich restaurant was struggling to grow same-store sales before the pandemic decimated the sandwich shop segment, which caters to the weekday office lunch crowd. In August, Potbelly took a $10 million loan from the Payment Protection Program offered under the CARES Act.
The sandwich chain, which saw its Q2 revenues fall by almost half this year to $56.2 million from $105.6 million in Q2 of 2019, is having to make drastic changes to its business model to stay afloat. In May, it warned of its difficulty fulfilling its annual debt obligations, and in June, its largest shareholder, 180 Degree Capital, called its performance "unacceptable and clearly indicates new approaches are necessary."
Along with new leadership, Potbelly pivoted its operations to adapt to off-premise popularity and changing consumer needs during the pandemic. Its digital sales almost tripled quarter-over-quarter in Q2 to 46% of overall sales and the company celebrated its loyalty program reaching 2 million members in August. Potbelly also rolled out curbside pickup, Potbelly Pantry and a family-meal offering in April, which CEO Bob Wright said provided the chain "with relevancy in a daypart where Potbelly traditionally hadn't had relevancy."
Several of Potbelly's main competitors, including Panera Bread, Chipotle, and Firehouse Subs, had already geared their operations strongly toward off-premise sales before the pandemic, and Potbelly's sales rebound has been comparatively slow. Rival Subway, on the other hand, has also fared poorly, having made layoffs even before the onset of the pandemic, and suffering from its lack of many drive-thru capable locations. Potbelly only has 65 drive-thru units as of May, but the addition of curbside has helped supplement these locations, former CEO Alan Johnson said.
Wright said Noyes’ was "the perfect fit for Potbelly at this stage of our turnaround, as well as our next stage of growth," citing his "ability to quickly identify and leverage brand strengths."
With Noyes, Potbelly will have a COO with almost 30 years' experience in drive-thru optimization. Checkers and Rally's model enabled it to outpace its rivals during the pandemic despite slumping sales over the past five years, which Noyes may look to replicate in his new role.