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How Much Can you Make Owning a Panera Bread Franchise?

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The Panera Bread franchise is synonymous with healthy living. Since originally opening as Au Bon Pain Co. INC, the authentic artisan bread bakery and cafe has become a ubiquitous international presence.

Panera Bread is most known for providing customers with healthy diet options. As a leader in the bakery-cafe franchise segment, the company pledges to serve food that is, “better for you, our associates, and the world we live in,” as boasted by their website.

  • Initial Investment: $942,000 to $1.6 million
  • Net Worth Requirement: $7.5 million
  • Liquid Cash Requirement: $3 million
  • Franchise Fee:35,000
  • Royalty Fee: 5%

The History of Panera Bread

The company first began as Au Bon Pain Co. Inc, in 1981 with its first location in Kirkwood, MO. The franchise was founded by Louis Kane and Ron Shaich. Shaich has remained at the center of business operations for Panera as the company’s Founder, Chairman, and CEO.

For the next two decades the company operating as Au Bon Pain opened sites along the east coast becoming the dominant operator of fast-casual restaurant segment serving fresh-baked artisan bread.

In 1993, Au Bon Pain Co purchased Saint Louis Bread Company–a chain of 20 bakery-cafes located out of the St. Louis area. At this point, the company began re-staging and managed an extensive overhaul. The average unit volumes increased by 75% during the years 1993 to 1997.

The founders’ vision was clear. What was soon-to-be-called Panera bread was rising to the ambition of becoming one of the leading brands in America.

Two years later, the company sold all AU Bon Pain., INC’s business units while retaining the Panera Bread franchise in 1999. The company officially renamed to Panera Bread and the transition was complete. Since the name change, the company’s stock has soared to a market capitalization of $4.5 billion, according to the company website.

The franchise made another huge business move in 2007 when Panera Bread purchased a majority stake in Paradise Bakery & Cafe assuming over 70 locations in 10 states centered in the west and southwest around the Phoenix-based concept.

Currently, there are 2,024 bakery-cafes operating within the Panera Bread franchise brand, Saint Louis Bread Co, and Paradise Bakery & Cafe names.

So, Why do People Love Eating Panera?

Panera Bread had the vantage point of being able to identify a market trend years before other quick-service restaurants. The idea that consumers wanted healthier food choices was just peaking on the horizon–when in 2004–Panera introduced chicken raised without antibiotics to their menus. This was unheard of at the time—before many restaurants jumped on the nutritional bandwagon.

The Panera Bread franchise was also the first restaurant to post calorie information on their menu boards exercising company values of transparency. They have also stayed ahead of the digital curve by including mobile ordering and kiosks within their business concepts.

In June 2014, Panera announced a plan-of-action to remove all ‘unclean’ ingredients from their menu.  The next year, in May, the company unveiled a ‘No No’ list that included every ingredient the franchise deemed unfit for their food. Chemical ingredients like Monosodium Glutamate (MSG) and  Potassium Bisulfate and any other ingredient that you ‘can’t pronounce’ made the list of chemicals that will never be in a Panera pantry. The company worked with distributors to find more holistic means of providing clean food.  

This was one of the first steps in Panera’s socio-political promise to serve food raised without artificial preservatives, sweeteners, flavors, trans fat, or colors. In January of 2017, the company made good on their promise. The entire menu of every Panera Bread franchise is 100% clean. The restaurants also value using animals raised in a humane environment—vegetarian fed and free of antibiotics. The company releases yearly progress reports so customers can track their initiatives.

A combination of healthy chemical-free food with protein sources that are raised ethically and a nutrient rich menu is why so many people crave Panera.

How much Do Panera Bread Franchise Owners Make?

With over 2,000 locations open, becoming part of the Panera Bread franchise team is not as simple as opening a single-unit bakery. The company has a development plan that sells market areas. This requires prospect franchisees to become a franchise developer.  All Panera Bread franchise developers open multiple units. On average, a Panera franchise owner opens 15 bakery-cafes within six years.

Franchisee applicants must meet the following criteria qualifications from the company’s website to be considered:

  • Experience as a multi-unit restaurant operator
  • Recognition as a top restaurant operator
  • Net worth of $7.5 million
  • Liquid assets of $3 million
  • Infrastructure and resources to meet our development schedule
  • Real estate experience in the market to be developed
  • Total commitment to the development of the Panera Bread brand
  • Cultural fit and a passion for fresh bread

Panera’s aggressive development plans calls for seasoned franchise owners with a hefty price tag. But the payout could make it all worth it. Forbes Business Magazine published an article stating that the average Panera bread makes $2.47 million annually. For a more accurate look at what a franchise owner takes home, you would have to obtain a franchise disclosure document (FDD) from Panera Bread. The details of the financial performance are documented under Item 19 of the FDD.

What are Other Franchises are following a Similar Path as Panera Bread?

Splash and Dash Groomerie & Boutique

  • Initial Investment: $110,750-$177,600
  • Net Worth Requirement: $350,000
  • Liquid Cash Requirement: $125,000
  • Franchise Fee: $48,500
  • Royalty Fee: 6.5%

A strong franchise brand begins with passion. Just like Panera Bread, passion is at the cultural roots of Splash and Dash Groomerie & Boutique—a pet salon and retail store. Instead of a passion for healthy fresh bread, Splash and Dash shop owners are passionate about pets. The company believes in a synergy between providing for animals and savvy business practices.

Around the time Panera Bread’s franchise starting taking off was when many Americans realized that the country’s food system needed to be fixed. The foods Americans were consuming were packed full of chemicals, animals being eaten were inhumanely slaughtered, and people were growing sick of it. An unhealthy food system also means more emissions and a heavier carbon footprint.

Companies like Panera and Splash and Dash wanted to be a step in the right direction; Providing consumers with healthier options both for themselves, and in the case of Splash and Dash, for their pets.

At the center of the company’s core values are healthy dietary options for pets, sustainability for the planet, and a culture that promotes contentiousness.

 

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