2014 Government Regulations & Business Summit
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By Harold Ambler
PBN Staff Writer
By Harold Ambler
PBN Staff Writer
In an era in which people pride themselves increasingly on avoiding carbohydrates, what do you do if your business, or at least your name, is all about carbs? If you’re Panera Bread, you diversify your menu offerings, make service a top priority and grow your business at an impressive clip.
The company’s local incarnation – serving Rhode Island, eastern Connecticut, and southeastern Massachusetts – is a franchise known as Panera Bread/Howley Bread Group. Just as it is for the corporate parent, business at the local level is thriving. Panera/Howley has created 275 new jobs over the past four years and it expects to bring 70 jobs online in Lincoln in December.
Business at the bakery/cafes is so brisk, in fact, that the company says a major challenge in recent years has been to find enough employees to serve customers efficiently.
The Panera/Howley franchise – overseen by Senior Vice President of Operations Bahjat Shariff, Senior Vice President of Development Tom Howley and President Lee Howley – opened in 2000 and now operates 26 bakery/cafés (seven in Rhode Island, four in southeastern Massachusetts, and 15 in eastern Connecticut). And it plans to open two more in the next couple of years and to reach 33 cafes by 2015, with the next one the aforementioned Lincoln location.
Not all that long ago, the king of fast, casual food with gourmet-level bread at the core of its business model, regionally and nationally, was Au Bon Pain. Begun in Boston in 1981, Au Bon Pain sold quality food that for many was palpably healthier and better-tasting than that at other fast-food establishments. In the process, Au Bon Pain helped pave the way to an innovative food-service experience.
Tom Howley and Bahjat Shariff both cut their teeth at the fledgling Au Bon Pain in the 1990s. Shariff opened the company’s cafés in California, and Howley was in charge of the company’s legal and real estate dealings nationally, the latter being central to its expansion efforts. In the later part of the decade, Au Bon Pain purchased Panera, and started offering franchises. In 1999, all of Au Bon Pain’s business units except Panera Bread were sold and the company was renamed Panera Bread.
Howley and Shariff, together with Howley’s brother Lee, an expert in finance, immediately expressed interest in a Panera franchise to one another. They purchased the franchise for Rhode Island, southeastern Massachusetts and eastern Connecticut by 2000.
From the start, Panera has been a place to buy high-quality, baked-bread products, coffee beverages and desserts. More recently, it has been adding pasta dishes as it courts a dinner clientele looking for something between the sit-down dining and the fast-food experience that its competitors, like Boston Market and Chipotle, also provide.
In-store sales continue to be strong. And that has led to growing pains. Recent news stories, including one in The Wall Street Journal, have noted staffing problems created wait times long enough to drive some customers out of Panera, including local cafes. “We’ve had growth for 10, 12, 13 years, and the lines became longer and longer in many of our cafés,” said Shariff.
“We had started already to try to figure out how we could make it easier, and we’ve added more workers, more cashiers, more lines, and a little bit more technology, like pagers and things like that, to try to make it a little bit easier on customers. I think we have some work to do over the next six months,” he said.
Although the waits plaguing Panera nationally are present in local cafés, the partners believe they are fortunate to be at a size where they can respond to such challenges a little bit more nimbly than the wider company can. “We’ve had, part of our franchise, the advantage of being more independent, being smaller, with just three owners of the company,” said Shariff. “We have the luxury of being able to adapt a little bit faster.”
And, indeed, speaking of speed, Panera/Howley Bread Group is on the verge of creating its first drive-through location in Rhode Island. The Lincoln store, opening in early December, will be the first of its kind, but it will not be the last. Customer surveys indicate that Panera and drive-through is a comfortable match.
“We’re in this for the long haul,” said Tom Howley. “We want to keep it strong and competitive, and we think that one of the ways that we can is by providing a drive-through service.” The idea of drive-through Panera was not necessarily intuitive for Howley at first. “If you had asked me five or six or seven years ago, will Panera ever be drive-through, I would have said, no, it won’t. But we were able with a process of research to develop the methods necessary to make it a viable service option.”
In addition to the new drive-through location in Lincoln, Panera/Howley plans to convert existing locations where a drive-through lane can be created.
Service is something that Panera/Howley takes to heart, on more than one level. Giving back to the community is central to the partners’ efforts, as shown by the $7 million in food and funds that the Panera/Howley has donated to local food banks and charitable foundations since it began doing business.
Examples of donations include $389,000 raised and donated to Children’s Friend; $255,000 to the Connecticut Sports Foundation Against Cancer; and $40,000 to Ryan’s Hope.
“We do these charitable events in our cafés, and the reason that we do all of these things is that we’re very fortunate,” said Shariff. “We feel very responsible to be part of the community. Our general managers live in the communities where they work, and we feel responsible to give back. We take it seriously.” All of the stores’ leftover bread products are donated to food banks at the end of the day. That way, the business’ freshness standards and giving standards can both be maintained.