“Panera Bread” Franchise Cost in USA, Fees, Profit, Apply Process | SkillsAndTechSkillsandTech | January 27, 2022 |
Panera Bread is the freshly baked bread, sumptuous bread bowls, healthy sandwiches, and salads. The restaurant chain is located in 48 states serving fresh food since 1987.
Table of Contents
Panera Bread Franchise Wiki
|Total Units||Over 2,000|
|Incorporated Name||Panera Bread|
|Industry||Fast Casual Restaurant|
|Subsector||Bakery, Food and Beverage|
How much does it cost to open Panera Bread?
You’ll need liquid assets of $3 million and a net worth of $7.5 million to meet the financial requirements for this business. The investment range is estimated to be $1,117,000 to $3,464,000 in addition to a franchise fee of $35,000. Panera Bread has a significantly higher financial requirements than other restaurant franchises like Jersey Mike’s.
Ready to learn more about Panera Bread? Below are more details about this popular bakery, average sales, what you can expect should you run this business and more.
Financial Requirements and Fees
Panera Bread requires certain expenses and fees when you sign up to become a franchise operator:
|Fees / Expenses||Financial Amount|
|Liquid Capital||$ 3 million|
|Net Worth||$ 7.5 million|
|Total Investment||$ 1,117,000 to $3,464,000|
|Franchise Fee||$ 35,000|
Other fees that you should note when it comes to franchising Panera Bread are the royalty fees of 5% of net sales and a national advertising fund representing 2.6% of the net sales.
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Note that Panera Bread does not sell single-unit franchises. They would prefer applicants to run multiple units around 15 bakery-cafes within 6 years.
Based on the financial requirements of Panera Bread, it’s clear the company is looking for franchise operators that are well capitalized. That’s not a bad thing as a corporate franchise since operators are more likely to get through difficult times in the business if they are better funded. In addition to money, the company is looking for the following in a prospective owner.
- Must be experienced in running multi-unit restaurants.
- Is recognized as a top restaurant operator.
- Has the resources and infrastructure that meets their development schedule.
- Is passionate and culturally-fit.
- Is committed to developing the Panera Bread brand.
- Has real estate experience.
Average Sales / Revenue per Year
Panera Bread sales have reached billions in annual revenue. Sales has been on a steady rise since 2009 but due to the pandemic that hit in 2020 Panera Bread sales took a hit. Of course Panera Bread was not the only restaurant franchise that encountered challenges.
From their $5.890 billion sales in 2019, it went down to $5.350 billion in 2020. A -10.5% in sales change was recorded over this time period.
Panera Bread’s roots started as a cookie shop in Boston in 1981. Ron Shaich then merged with another French bakery known as Au Bon Pain. Deciding to focus on a niche that sold “more than processed fast food”, Shaich acquired St. Louis Bread Company in the 1990s and renamed it to Panera Bread.
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It should be pointed out that Shaich was truly ahead of his time in terms of creating a fresh, healthy food concept. It’s common for a restaurant to focus on organic ingredients now, but in the 1980s this was a novel concept and no doubt helped the company gain market share and differentiate itself in the early days.
The word Panera means bread box in Spanish. And though Panera Bread doesn’t actually sell a bread box, they are well-known for their soups served in bread bowls, salads, sandwiches, and paninis. They also serve 50 million baguettes and more than 250 million bagels each year. Panera Bread offers catering for large parties too, which is another income channel for the restaurant. Flatbread pizzas are one of the latest additions to their ever changing menu.
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Panera Bread is all about serving food with clean ingredients. By clean, they only use high-quality ingredients that are sourced from North America whenever possible. The company also introduces seasonal items on their menu to keep things fresh.
There’s also a No No List of ingredients which contains 96 items that don’t meet their standards of what “clean eating.” Panera Bread was also one of the first chains that placed calorie counts on their menu, helping diners make more informed decisions about what they eat.
There are over 2,000 Panera Bread locations with 2,165 stores in the United States alone. Florida has the most Panera locations followed by California. At the time of writing, 1,202 stores are franchise-owned while 1,023 are company owned. Panera Bread is also located in Canada.
Aside from their food, Panera Bread’s success can be partially credited to a loyalty program that keeps customers coming back. The MyPanera rewards card allows customers a convenient way to make repeat purchases and be rewarded for their patronage. I’m personally a member of the MyPanera rewards program. You get more points with each visit that can be redeemed for free food items in the future. Their loyalty program has amassed over 40 million members since it was offered.
Panera Bread integrates good food with convenience for their customers. Panera 2.0 is their online platform for all their customers which allows them to order easier. Recently with the pandemic, Panera 2.0 added digital and kiosk ordering to make purchasing safe and hassle-free.
The bakery chain is also very active in giving back to the community. They’re known for doing Fundraising Nights, helping kids learn baking with their Bakers-In-Training program, supporting events organized by non-profit organizations, and donating unsold baked goods to charitable organizations.
Currently, Panera Bread is owned by JAB Holding Company, a private company known for investing in popular businesses such as Krispy Kreme, Caribou Coffee Company, Einstein Bros. Bagels, Peet’s Coffee & Tea, and Espresso House. Non-food brands that they own are Bally and Coty.
How Much Does Panera Bread Make in Profit?
The publically reported income of Panera Bread store was $2.47 million annually in Forbes. As for how much a store makes, it is not known as of the moment. You can bet with the combination of drive-thru, online ordering, and in-store sales, Panera Bread is well positioned to be a high-revenue generating franchise opportunity.
How to Apply for Panera Bread Franchise?
You can apply for Panera Bread Franchise online.
Qualification Criteria (Domestic)
- 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
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If you are interested in Panera Bread franchise area development agreement, meet the qualification criteria and have experience as a multi-unit restaurant owner in one of the markets available for
franchise development, then fill up their International Request Form.
Fill up the information correctly and click on send request.
Advantages of a Panera Bread Franchise
With a huge name like Panera Bread, you’re sure to expect many advantages from this bakery chain. Below are some you can look forward to when you decide to become a franchise operator.
Offering Healthy Items
It’s no secret that Panera Bread offers healthy options. They have more greens than any other fast food chain in the United States. They also advocate in eating clean, which means they don’t include any harmful ingredients or additives in their food.
You still have to check the calories to make them fit into your healthy daily calorie count. But the menu items that Panera Bread offers are admittedly better than other fast-casual restaurant chains full of greasy items on their menu.
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As mentioned above, Panera Bread has one of the biggest loyalty programs for customers. These programs are not a requirement for every business out there but it helps encourage customers to return and purchase items from them often. It also rewards customers with their loyalty to the brand with free treats. With a rewards program like this, you should have no problem marketing a Panera Bread in your community.
Despite suffering a dip in sales during the pandemic, Panera Bread is not holding back on innovation. Instead, they have taken the time to improve their online orders and pick up. They’re even making things more convenient for their customers with their new Panera Bread store designs which will feature drive thru lanes.
The store designs are also reported to go down from the usual 4,300 square feet to 3,500 square feet but that is because rapid pick-ups are increasing compared to in-store dining. But should dine-in make a comeback in the future, Panera Bread will also “enhance that experience”.
With this type of innovation, being a franchise operator for Panera Bread will make you feel proud to join this family that knows how to please its customers. This is a company that’s proven they know how to adapt to what customers want.
Challenges of a Panera Bread Franchise
Business is business and that means there will always be challenges about. Here are some of them you can expect at Panera Bread.
Limited Rewards Program
As mentioned above, Panera Bread has one of the most sought-after loyalty programs since they reward their customers with free treats and even make things easier for them to order. However, not all Panera Bread stores participate in such programs. As stated in their Frequently Asked Questions on their website, only participating Panera Bread stores can recognize your rewards card. They have not stated which locations participate in their program so you’ll have to ask once you get there.
In the future, Panera Bread can accept all rewards cards so more of their customers can use this program more easily.
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Lawsuits and Discrimination
Panera Bread has been hit with several lawsuits in the past. The chain was hit with an overtime lawsuit amounting to $4.6 million. They were also sued for religious discrimination. Such lawsuits can impact the name of Panera Bread. And even if your store may be running smoothly and abiding by all rules, people might not be able to help it and think of the lawsuits related to your store as well, thereby giving it a bad reputation.
Panera Bread does not allow single unit franchising so you’d have to be prepared to shoulder 15 bakery cafes. If this is too much for you then you might have to partner with other people to handle the managerial tasks. Additionally, you may franchising may not be available in your area.
Is the Panera Bread Franchise Right For You?
Panera Bread looks like it’s going to continue on in the future with new ideas and innovations when it comes to serving their customers. So if you want to get on board with a company that serves good food and a convenient experience to many, Panera Bread might be for you.
Assuming you meet the financial requirements, it’s best to discuss more of the franchise’s details with Panera Bread representitive if you want to learn more. Another easy way to find out if you want to operate the franchise is by working inside one of these stores part-time. This will give you real world experience working inside a Panera Bread and serving customers face-to-face.
What is an alternative Panera Bread franchise?
If you’re into serving sandwiches but can’t afford the investment in Panera Bread, check out Subway. This chain is known for serving customizable sandwiches and has over 41,000 stores not just in the United States but around the world. Aside from sandwiches, they also have wraps and salads.
Subway is known as one of the lowest-cost franchises to start. The initial franchise fee to own a Subway is $15,000 and the total investment to be expected is $150,050 to $328,700. To learn more about this sandwich chain, check out my guide to franchising a Subway here.