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Panera Bread Franchises Costs $K – $K (+ 2024 Profits)

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  • May 30, 2024

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Panera Bread , originally founded as the Au Bon Pain Co. in 1981, has evolved into one of the most recognizable names in the fast-casual dining industry. The company, which rebranded to Panera Bread in 1993 after purchasing the St. Louis Bread Company, is headquartered in St. Louis, Missouri. Panera Bread began franchising the same year it was founded, quickly expanding its footprint across the United States and Canada.

Panera Bread specializes in fresh bakery goods, sandwiches, soups, salads, custom roasted coffees, and other café beverages. The chain is known for its commitment to health and wellness, offering a menu that emphasizes fresh, high-quality ingredients. This focus on quality and customer satisfaction has helped Panera Bread build a strong and dependable reputation nationally.

What sets Panera Bread apart from many competitors is its business model. Rather than selling single-unit franchises, Panera Bread sells market areas, requiring franchise developers to open a series of bakery-cafes, typically around 15, over a six-year period. This approach ensures a consistent brand presence and operational efficiency within each market. Additionally, Panera Bread offers one of the largest free WiFi networks in the country, enhancing its appeal as a comfortable and inviting place for customers to relax and work.

business plan panera bread

Panera Bread Franchise Financial Model

Get a professional financial plan for your franchise application. In 2023 we have helped over 120 franchisees get funding for their franchise.

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Initial investment

Here’s what you can expect to spend to start a Panera Bread franchise.

Note:  The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the   Item 7  of the Franchise Disclosure Document ). For a complete overview of all the expenses involved with the various formats offered by the  franchisor , please consult the Franchise Disclosure Document.

business plan panera bread

Franchise fees & Royalties

Here are the main ongoing fees the franchisor will ask you to pay going forward to run the franchise.

Initial Franchise Fee

The initial franchise fee payable for each Panera Bread Bakery-Cafe is $35,000 , payable at the execution of the Franchise Agreement.

Royalty Fee

The royalty fee is 5% of Net Sales for each Reporting Period. There are fifty-two or fifty-three reporting periods in each fiscal year.

Brand Fund Fee

The National Advertising Fund (NAF) contribution is 3.26% of Net Sales. This fund is used for the creation and development of marketing, advertising, and related programs and materials, including electronic, print, and internet media.

Marketing Administration Fee

The Marketing Administration Fee (MAF) is 0.4% of Net Sales, payable on the first business day following the immediately preceding Reporting Period. This fee covers costs such as market research activities, concept development, design development, and maintenance of the marketing activities.

Local Advertising Fund Fee

The Local Advertising Fund (LAF) contribution is 2.0% of Net Sales. This fee is used for local marketing plans and advertising efforts, with the specifics to be approved by Panera.

Transfer Fees

The transfer fee is $7,500 , plus costs, payable upon the sale or transfer of the franchise.

Renewal Fees

A renewal fee equal to fifty percent (50%) of Panera’s then-current initial franchise fee is payable upon signing a successor franchise agreement.

Franchise pros and cons

  • Exclusive territory protection : Panera Bread grants its franchisees the right to operate in a protected territory . The franchisor or its affiliates do not establish any other franchise in the designated area.
  • Training and ongoing support : The franchisor provides its franchisees with an 8–12-week classroom training program to help them run their franchisees successfully. In addition, it prepares them for a successful grand opening and ongoing operational support through regular franchise reviews and training.
  • Innovative designs : The franchisor has introduced new franchise designs to include drive-through options, which gives franchisees convenient and effective customer service and helps them stand out from the competition.
  • Marketing support: Panera Bread has comprehensive marketing and advertising strategies to help franchisees promote their restaurants and improve their sales. These include Co-op advertising, social media, national media, ad templates, and regional advertising.
  • Site selection and construction : The franchisor may, at its discretion, offer real estate services such as site selection and construction to its franchisees.
  • No single-unit operations : The franchisor does not allow for single-unit franchises . Franchisees must be prepared to open multiple units as well as scale to about 15 units in 6 years, which may call for increased investment costs.
  • No absentee ownership: The franchise does not present a passive investment opportunity. Franchisees must be fully involved in the day-to-day operations of their franchises.
  • No franchise financing: The franchisor does not offer direct or indirect financing to its franchisees.

How to open a pANERA BREAD franchise

Opening a Panera Bread franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Panera Bread franchise.

1. Review Franchise Requirements

  • Net Worth: Ensure you meet the minimum net worth requirement of $7.5 million.
  • Liquid Assets: Have at least $3 million in liquid capital available.
  • Experience: Preferably have prior experience in the restaurant or retail industry.
  • Commitment: Be prepared to open a series of bakery-cafes, typically around 15, over a six-year period.

2. Submit Initial Inquiry

  • Contact Panera Bread: Reach out to Panera Bread through their franchise information page to express your interest.
  • Fill Out Application: Complete the franchise application form provided by Panera Bread.
  • Financial Disclosure: Provide detailed financial statements to demonstrate your ability to meet the financial requirements.

3. Attend Franchisee Discovery Day

  • Invitation: If your initial application is approved, you will be invited to a Discovery Day at Panera Bread’s headquarters.
  • Meeting with Executives: Meet with Panera Bread’s executive team to discuss the franchise opportunity and get an in-depth understanding of the business model.
  • Evaluation: Both you and Panera Bread will evaluate if the partnership is a good fit.

4. Sign Franchise Agreement

  • Review Agreement: Carefully review the Franchise Disclosure Document (FDD) and franchise agreement.
  • Legal Consultation: Consider consulting with a franchise attorney to understand all legal obligations.
  • Sign Agreement: Once you are comfortable, sign the franchise agreement and pay the initial franchise fee of $35,000.

5. Secure Financing

  • Total Investment: Prepare for a total investment ranging from $1.1 million to $3.5 million.
  • Financing Options: Explore various financing options such as loans, investors, or personal funds to cover the startup costs.

6. Training and Development

  • Training Programs: Complete the mandatory training programs, including Baking Training and Retail Training.
  • Operational Training: Gain hands-on experience in food preparation, equipment operation, cost control, and inventory management.
  • Certification: Obtain necessary certifications such as ServSafe from an accredited program.

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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Panera Bread SWOT 2024 | SWOT Analysis of Panera Bread

business plan panera bread

  Company: Panera Bread Company CEO: Niren Chaudhary Founder: Ronald M. Shaich, Ken Rosenthal, and Louis Kane Year founded: 1981   Headquarters: St. Louis, Missouri, United States Employees (2019): 52,000+ Type: Private (Privatized in 2017) ‎ Annual Revenue (FY2016): US$2.795 Billion

Products & Services: Freshly Baked Breads | Sandwiches | Bagels | Muffins | Pastries | Soups | Salads | Custom Roasted Coffee | Complementary Products | Fresh Dough | Farm Produce | Tuna | Cream Cheese | Supply Sweets Competitors: Chipotle | Wendy’s | Dunkin Donut | Starbucks | McDonald’s | Dine Equity | Tim Hortons | Subway

Fun Fact: All the bagels, baguettes, loaves of bread, bagels, muffins, and pastries are freshly baked and sold within the day. Those that don’t get sold by the end of the day are all donated to a charity called the Day-End Dough-Nation program.  

Panera Bread Co. operates in fast-casual food retail with over 2000 bakery-cafes under the names of Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Cafe. After operating as a public company for several years, Panera Bread was privatized after it was acquired by JAB Holding Company. Over the years, Panera Bread has grown to become one of the main players in the retail bakery café sector. Here is the Panera Bread SWOT analysis.

Table of Contents

Panera Bread’s Strengths

  • Data-Driven Strategies : Panera’s management employs data-driven decision-making in the running of the company. This ensures that each decision contributes to the bottom line. The company started offering breakfast called ‘the ultimate portable on-the-go breakfast.’ Panera’s breakfast offering grew rapidly to 30% of its catering business and increased its digital sales to $2 billion.
  • Highly Innovative: Technological superiority over competitors is the most important advantage in the 21st century. Panera has invested immensely in technology like mobile-placed orders, in-store order, and so on. The company’s innovation has enhanced the speed of services and convenience offered to customers.
  • Effective Use of e-Commerce: With the ever-increasing number of online shoppers, companies that exploit e-Commerce more effectively have an edge over competitors. Panera effectively adopted e-Commerce, which contributes between 35% and 37% of its business with more than 1.7 million digital orders per week.
  • Variety of Offerings: From plant-based sandwiches to salads, snacks, pastries, and so on, Panera offers a wide variety of options on its menu.
  • Healthy Products: In 2017, Panera removed all unhealthy ingredients from its menu including artificial colors, flavors, sodium benzoate, sodium nitrite, sweeteners, and so on. It also changed its menu to offer healthy options by reformulating around 122 ingredients.
  • Strong Social Media Marketing: Panera has built a large and loyal following on various social media platforms. The company is a phenomenal brand on Twitter, where it targets its audience using different strategies that resonate with the demographic.
  • Refined Positioning: Targeting a specific segment and demographic in the market increases the chances of success since the company focuses on convincing only a small portion of the market. Panera is perfectly positioned to target consumer demographic ranging from 25 to 44 years, which includes millennials who are the drivers of the consumer market.
  • Customer-Centric Strategies: While most companies focus on what the customer wants, Panera focuses on what customers like and dislike about fast food joints. This customer-centric strategy is implemented via the Panera 2.0 initiative and has enabled the company to eliminate issues like long queues during checkout while enhancing customization.
  • Free Delivery: The risk of contracting the virus has forced millions to work from home. To entice this target market , Panera started offering free delivery.

Panera Bread’s Weaknesses

  • Lack of Diversification: Operating in a single segment of the market increases risks of losses and severity in case of a slowdown or decline. Panera caters to a small niche within the foodservice sector and offers a limited menu.
  • Friction in Management: The quality of service and productivity of operations are affected negatively at any time there is conflict or friction in management. Panera’s management is engaged in several ongoing conflicts with investors and the founder.
  • National Operator: Panera has over 2000 restaurants spread across the US with a handful in Canada. In the event of socioeconomic challenges in North America, the company will suffer more adversely compared rivals like Starbucks who operate globally.
  • Loss of Human Touch: The rapid adoption of technology for automation of processes has replaced warm smiling faces with answering machines and apps. The decrease in the human touch is leading to a decrease in the quality of customer service and an increase in discontent among Panera’s customers.
  • Controversial Lawsuits: Trust is eroded any time a company is accused of wrongdoing presently or in the past. Panera and its founder are engaged in a bitter court battle that publicly revealed issues with the company’s hiring processes.

business plan panera bread

Panera Bread’s Opportunities

  • Global Expansion: Operating in a larger global market offers a deeper pool of potential customers. Since Panera operates solely in North America, it can expand globally and tap into the deeper pool of customers for growth.
  • Diversify Offerings: Panera can cater to the needs of the entire market to increase its revenues and growth. It introduced breakfast in its menu leading to a drastic increase in revenue and it can do the same again.
  • Expand its Target Market: Catering to a small demographic range from 25 to 44 years excludes potential customers. Panera can expand its target market by offering other products like groceries to cater to all age groups within the foodservice market.
  • Subscription offer: it’s not just technology companies like Netflix or Amazon that have subscription-based models , even Panera Bread has started a free coffee subscription service “MyPanera+ Coffee”. You can get unlimited coffee all day for just $8.99/month.

Panera Bread’s Threats

  • Climate Change: Food scarcity is one of the biggest threats posed by climate change. As the cases of prolonged droughts and severe floods increase, Panera will find it more difficult to access fresh farm products it needs as ingredients.
  • Looming Recession: Countries across the world are sliding deeper into recession. Even though Panera successfully survived the 2008 recession , the company may not be so lucky in the future.
  • Stiff Competition: From Starbucks to Chipotle, McDonald’s, Dunkin’ Donuts, and so on, Panera’s strong competitors threaten its market share .
  • Global Pandemic: The lockdown imposed by authorities due to the virus has reduced Panera’s sales forcing it to turn to groceries to mitigate the losses. If the pandemic persists, its revenue and profits are on the line.
  • Lucas, A. (2019, April 15). Panera Bread enters the breakfast wars with a new strategy . CNBC 
  • Thomson, J. (2019, May 23). Panera Proves Investment In Technology Pays Off . Forbes
  • Amick, B. (2020, March 3). Panera earns its bread . Bake
  • Cassetty, S. (2018, June 14).  The healthiest things to eat at Panera Bread . NBC
  • Aravind, K. (2017, January 13). Panera Bread removes artificial ingredients from the U.S. menu . Reuters
  • Ringvald, G. (2019, January 27). Panera Bread appeals to a younger demographic through witty text . Medium
  • Maynard, M. (2017, April 3). Panera Bread May Be In Position To Pick One . Forbes
  • Campos Staff (2019, March 7). How Panera Makes Being Customer-Centric a Priority . Campos 
  • Industry News (2020, March 23). Panera to Offer Free Delivery . QSR Magazine
  • Linder, D. (2020, February 23). One Product Store vs General Store vs Niche Store: A Comparison . Product Mafia
  • Feeley, J. (2019, July 3). Panera Accused of Bungling $7.5 Billion Sale to Help Founder . Bloomberg
  • Rajiv, N. (2019, December 23). An In-Depth Overview of Panera Bread . Market Realist
  • Rosenbaum, E. (2019, August 29). Panera is losing nearly 100% of its workers every year as the fast-food turnover crisis worsens . CNBC 
  • Fast Casual Staff (2019, February 27). Panera, ex-CEO, and founder battling in court over potential hires . Fast Casual 
  • Business Wire (2019, January 14). JAB Announces Organizational Changes as Part of Global Expansion . AP News
  • McDowell, M. (2019, April 8). Panera’s New Whole-Wheat Breakfast Wraps . Delish  
  • Dixon, L. (2020, April 8). Panera Is Now Selling Groceries Like Milk, Bread, Fresh Produce, and More . Taste of Home 
  • Saxena, J. (2020, January 13). Panera Is Making Its Menu More Plant-Based to Become More Sustainable . Eater.
  • Startup Finance (2019, April 5). What Panera Bread Did to Succeed in the 2008 Recession . Team Pay
  • Shepard, H. (2018, August 20). Six Ways to Out-Convenience your Competition . HYKEN Letters. 
  • Lucas, A. (2020, April 8). Panera Bread is selling groceries as restaurant sales plummet . CNBC
  • Featured image by Pedro da Silva  on  Unsplash

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Home » General » Panera Bread Business Model and Growth Strategy

Panera Bread Business Model and Growth Strategy

The Panera Bread business model incorporates a focus on high quality foods at low-costs. This has been a growing trend within the entire food industry as of late, but especially within the quick service restaurants. In the past, restaurants have focused on providing clean facilities, excellent customer services, and a variety of menu options as cost-effective ways to save money and bring more people into the restaurant.

Panera Bread is taking the lead in adding another concept: creative recipes that feature cheap proteins that can make the company money while they save customers money. It’s working well for this company as they are one of the fastest growing chains in the United States right now. With over 1,400 stores, many of them are able to keep their food costs below 25%. Offering bread is a core concept, of course, but just being a bakery would limit their customer base.

Panera Bread Focuses On a High Quality and Quantity Concept

The customer turnover rate is important to the Panera Bread business model. These chains want to have customers coming in to see that there are food products that have been freshly made just for them. The task of the bakers in this chain isn’t to serve immediate customer demands, but instead to fill the display cases that are in each restaurant.

People shop for food products with their eyes more than their heads or stomachs, so the visual display encourages customers to purchase. Panera Bread also winds up with a lot of extra products at the end of the day that don’t sell. They receive a public relations benefit in their business model by donating leftover food products to food banks and homeless shelters instead of trying to selling it all to day-old retailers.

How Does a Low-Cost, High Volume Business Succeed?

There are two traits that must be present for a low-cost, high volume business to find success. The first is high energy. People need to be baking and serving people at a fast rate to increase the amount of customers that can be served over the course of a day. There must also be a sense of value to the overall experience. Value can be found in cleanliness, speed, or cost, but the actual flavors and textures of the menu items cannot be ignored either.

With the Panera Bread business model, creativity is demanded of each employee. Low-cost proteins are difficult to manipulate into something tempting, but this chain makes it happen. Side dishes and entrees featuring these low-cost food items are one of the most craved chain foods that working professionals want over the course of the day. Offering sandwiches and seasonal items rounds out the customer demand so that brand loyalty develops with every serving offered.

The one moment when an employee at a high quantity, high volume restaurant is perceived to be tired, lazy, or unengaged is the moment that customers will begin to see less value in the brand itself.

It is also important to note that Panera Bread has focused on dominating their market niche as well. There are lots of restaurants that offer fast service and higher quality ingredients, but this chain does so with an emphasis on the traditional deli-style experience and personal customer service.

What Can We Learn From the Panera Bread Business Model?

The one lesson that can be learned with Panera Bread’s business model is that a company does not need to have high retail upcharges on the food products that they are serving. Even something has simple as a 4x upcharge will bring high profitability, yet still be affordable to the average consumer. If a bowl of soup can be made for $0.50, then with a 4x upcharge model, the customer would receive the bowl of soup for $2.

That’s good value because it’s made by someone and is about the same price as a pour and serve can of soup from the grocery store.

This business model also proves that it pays to develop your market niche presence before trying to expand. Use your current location to perfect your best practices so that profits can be maximized. Reinforce these best practices every day and provide ongoing training to make sure everyone is on the same page. In doing so, a business can limit their overhead costs in many different budgetary areas.

The Panera Bread business model proves that a strong perceived value, backed up by low-cost menu options, can provide a real value that is unbeatable. That’s why it is important to pay attention to the lessons learned here.

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Market Realist

An In-Depth Overview of Panera Bread

Panera Bread is a limited-service fast-casual restaurant company. In July 2017, JAB acquired Panera in a $7.5 billion deal and took it private.

Rajiv  Nanjapla - Author

Nov. 20 2020, Updated 3:33 p.m. ET

uploads///AdobeStock__Editorial_Use_Only

Originally published on December 22, 2014, by Adam Jones , this overview of Panera was substantively updated on December 23, 2019, by Rajiv Nanjapla.

Panera Bread (formerly PNRA) is a limited-service restaurant company that operates fast-casual restaurants. It serves fresh-baked goods, soups, sandwiches, pasta dishes, salads, and custom roasted coffee. It also offers catering services.

Panera has 2,181 restaurants . Most of its locations are in the US, but it has a few in Canada. In total, it has more than 100,000 employees.

The company operates restaurants under three brands: Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Café. It operates these brands under the same fast-casual format. In July 2017, JAB completed its acquisition of Panera Bread in a $7.5 billion deal and took the restaurant company private.

Panera and the fast-casual restaurant concept

Fast-casual restaurants combine the fast-food concept—prime examples being McDonald’s (MCD) and Popeye’s—with the casual-dining concept—prime examples being Olive Garden and Chili’s. Olive Garden operates under the Darden (DRI) umbrella, and Chili’s operates under Brinker International (EAT) . Some of these restaurants are part of the SPDR S&P 500 ETF (SPY) .

Panera uses operated and franchised business models, unlike Chipotle Mexican Grill (CMG) , which doesn’t franchise its restaurants. To learn more about fast-casual and other restaurant formats, read The state of fast-food restaurants and Two more concepts: Pizza places and cafés.

An overview of Panera

Let’s take a look at Panera’s financial performance, value drivers, competition, and unit growth ahead of its acquisition in order to better understand it. We’ll start with its revenue growth.

Panera’s top line performance was concerning

Panera Bread reported revenue growth at a CAGR (compound annual growth rate) of 12.9% from 2006 to 2016. But as we can see in the graph above, the company’s revenue growth was below its CAGR in the few years before it went private. It reported revenue rises of 6.0% in 2015 and 10.5% in 2016. In the first quarter of 2017, its YoY (year-over-year) revenue growth stood at 6.2%.

From 2006 to 2016, Panera’s peers Chipotle Mexican Grill and McDonald’s reported CAGRs of 16.8% and 1.3%, respectively. McDonald’s strategic decision to refranchise led to lower revenue growth. In the restaurant industry, the fast-casual restaurant concept was poised to grow. Shake Shack (SHAK) , a recent entrant in the fast-casual space, has seen tremendous growth in the last five years. It went public in January 2015 at an IPO price of $21. As of December 18, 2019, it was trading at $60.49.

Panera’s three revenue segments

Panera reported its revenue in the following three segments:

  • Bakery-Café Operations.
  • Franchise Operations.
  • Fresh Dough and Other Product Operations.

Bakery-Café Operations

Bakery-Café Operations are Panera’s café operations. Panera is in charge of all these operations. It also keeps all of the associated revenue. This segment accounts for most of Panera’s revenue. In 2016, the segment generated revenue of $2.43 billion, a rise of 3.2% from $2.36 billion in 2015. SSSG (same-store sales growth) of 4.2% largely drove this revenue growth. Compared to 2015, the company increased its number of bakery-café units by one in 2016.

Franchise Operations

At the end of 2016, Panera had 1,134 franchised restaurants. Through royalties and fees, the segment earned revenue of $155.3 million, a YoY rise of 12.1%. This growth was driven by the addition of 63 franchised restaurants and SSSG of 0.7%. Since the company doesn’t have many costs associated with its Franchise Operations, the segment’s operating margins are high.

Fresh Dough

Panera distributes ingredients, such as fresh dough, tuna, produce, cream cheese, and proprietary sweet goods, to its company-owned cafés. It also delivers ingredients to its franchised restaurants. According to Panera, items are delivered at cost, which doesn’t exceed 27% of the end product’s retail value.

At the end of 2016, Panera had 22 fresh dough manufacturing facilities covering 20,000 square feet. Twenty were company-owned facilities, and two were franchise-owned facilities. The segment generated revenue of $206.1 million in 2016, a rise of 11.9% from $184.2 million in 2015. Positive SSSG and the addition of new restaurants led the segment’s revenue to rise.

Similar operations

Other restaurants have similar operations. Domino’s Pizza (DPZ) operated 18 dough facilities in the US and five dough manufacturing facilities in Canada at the end of 2016. Dunkin’ Brands (DNKN) has similar operations. It delivers ice cream products to its Baskin-Robbins stores.

Some restaurants also get their products from food distributors such as US Foods. US Foods purchases products from other producers. For example, it purchases meat from Tyson Foods (TSN) . It then processes the meat and distributes it to other restaurants.

What drives these segments’ revenues?

These segments’ revenues depend on restaurant-level sales. If Panera’s restaurants are flourishing, they’ll require more ingredients. Eventually, the Fresh Dough segment will benefit. To determine the performances of the company’s restaurants, we need to consider Panera’s same-store sales and what drives them.

Why look at Panera’s same-store sales?

To understand what drives revenue, we need to look at the most important value driver: same-store sales. Investors watch same-store sales to check on the health of their investments in restaurants and retail stocks, such as Nike and Gap.

Most of the company’s activities include, but aren’t limited to, the following:

  • Reinventing its menu.
  • Remodeling stores.
  • Enhancing the customer experience through Panera 2.0 and delivery initiatives.
  • Loyalty and reward cards.
  • Advertising.

The company’s activities revolve around its efforts to entice more customers to walk through its doors. More customers mean more sales!

SSSG’s correlation with revenue

The chart above compares Panera Bread’s SSSG with its revenue growth. The correlation between its same-store sales and revenue growth is 0.51. We can see that Panera’s same-store sales came in below 3% from the beginning of 2012 until 2016. In response, management rolled out Panera 2.0 to enhance the customer experience at its restaurants.

Panera 2.0 includes digital ordering, fast pickup, and the utilization of technology to improve operational efficiencies. By the end of 2016, 70% of Panera’s company-owned restaurants were remodeled according to its Panera 2.0 strategy.

Why Panera’s same-store sales failed to impress

In 2016, Panera Bread reported system-wide SSSG of 2.4%. Its company-owned restaurants reported SSSG of 4.2%, and its franchised restaurants reported SSSG of 0.7%. Meanwhile, McDonald’s reported SSSG of 10.5% in the US market during the period, while Shake Shack posted SSSG of 4.2%. Chipotle Mexican Grill’s SSSG fell 20.4% in the period due to its food-safety issues.

Same-store sales indicate a restaurant’s ability to generate revenue. They include tickets and traffic. Tickets include two more factors: price and mix.

In the chart above, we can see that tickets had a more pronounced impact on Panera’s same-store sales than traffic. A ticket is the amount a customer spends per transaction at a restaurant. In 2016, Panera’s average ticket size increased by 4.1%. The increase in its menu prices contributed 2.3% to its average ticket growth, while a favorable mix drove the remaining 1.8%. Mix means the growth in the number of items ordered per transaction.

A company has the flexibility to change its product mix. It can entice customers to purchase additional items—such as a package of chips or a soda—if they’re ordering a single item. This increases the overall amount the customer ends up paying per order.

However, it doesn’t have as much flexibility on prices. If prices increase too much, it could cause customers to go to a competitor instead. In this way, the greater contribution from favorable pricing to SSSG wasn’t a healthy sign for Panera.

In the chart above, you can see that Panera’s traffic had a weaker impact on its same-store sales than tickets. Traffic means the number of customers that come and eat at a restaurant. Several factors drive traffic, but advertising and promotions are big influences. These factors clearly weren’t working in Panera’s favor in 2016.

Panera’s advertising and marketing spending

In 2016, Panera Bread spent $71.6 million, or 2.6% of its total revenue, on advertising. This advertising included contributions from franchisees. In 2016, its franchise-operated restaurants contributed 2.6% of their sales to national advertising funding and 0.4% to marketing administration fees. Also, franchisees had to spend 0.8% of their sales on marketing in their respective markets. The company’s ad spending increased in 2016 compared to $68.5 million in 2015 and $65.5 million in 2014.

In 2016, Chipotle Mexican Grill spent 5.1% of its revenue on advertising and marketing expenses, which was significantly higher than 2.1% in 2015. In an effort to win back its customers after a series of food-related issues, Chipotle hiked its marketing spending. During the same period, McDonald’s spent $645.8 million, or 2.6% of its revenue, on marketing.

In 2016, Panera Bread ran its MyPanera customer loyalty program, which allowed the company to better engage with its customers. It stated that 51% of the transactions at its restaurants were associated with the loyalty program by the end of the year.

Replacing its advertising agency

In September 2014, Panera Bread selected Anomaly as its lead creative agency, replacing Cramer-Krasselt. The company launched its marketing campaign, “Food As It Should Be,” in 2015. More recently, in September 2019, the company launched its new “Few have reached our level” spots to gain leadership in the category.

Chipotle has long been actively spreading its message about its sustainable meat source, which seems to be working for it. To learn more about the company’s sustainable meat source, read An Investor’s Guide to Chipotle and Its Customers . In 2014, Panera jumped on the bandwagon and formalized its food policy.

Reinventing the message

On June 3, 2014, Panera’s management issued its food policy. Here were the key highlights:

  • Panera purchased poultry and livestock that had been fed a vegetarian-based diet. It purchased fish caught in the wild.
  • Its animals weren’t fed antibiotics.
  • It removed artificial items from its food. These items included artificial trans fats, MSG, sweeteners, and artificial colors, flavors, and preservatives.
  • It baked fresh bread at its fresh dough facilities every day. The bread didn’t contain any artificial preservatives.
  • It was the first national restaurant to disclose a comprehensive food policy.

On June 17, 2014, Panera issued another memo, which provided an update on its food policy. The update included the following information:

  • 91% of Panera’s pork supply hadn’t been fed antibiotics in 2014.
  • 80% of its beef supply was grass fed.
  • 18% of the company’s eggs came from cage-free hens.
  • 100% of its chicken supply hadn’t been fed antibiotics.

It’s important to note that laws in the US don’t permit feeding growth hormones to chickens. Let’s look at Panera’s expenses.

Panera’s key operational costs

Panera’s company-owned restaurant expenses are separated into four categories.

In 2016, Panera spent $709.3 million on food and paper products, which represented 29.1% of its revenue from company-operated restaurants. As the name suggests, these costs include food ingredients and paper products. The paper products are used to pack the food. A company doesn’t have much flexibility when it comes to these costs. Compared to 2015, its food costs fell from 30.3% of its company-operated restaurant revenue.

Labor costs

Labor costs were the highest for Panera’s company-operated Bakery Café. At the end of 2016, labor costs made up 32.5% of its related sales, or $790.4 million. The company doesn’t have to pay the labor costs at its franchise restaurants—franchise owners do. Labor costs as a percentage of sales have also increased over the years. Wage inflation and labor-supporting initiatives caused Panera’s labor expenses to rise in 2016.

Occupancy costs

Occupancy expenses are the costs related to the restaurant property, including rent and property taxes. Panera’s occupancy costs fell to 6.9% of sales from its company-owned restaurants in 2016 compared to 7.2% in 2015. They were also at their lowest level since 2013.

Other costs

Other costs included marketing and maintenance costs. In the graph above, we can see there was an increase in the company’s other operating costs. In 2016, its other operating expenses stood at $359.6 million, 14.8% of company-operated sales compared to 14.2% in 2015. Losses from disposals and impairments led to an increase in the company’s other operating costs.

Panera’s franchise and Fresh Dough expenses

We’ve seen the four key costs related to Panera Bread’s Bakery Café operations, or its company-owned restaurants. The company also had costs associated with its other two segments—its Fresh Dough and Franchise Operations. Let’s see how each of these segments achieved operating leverage.

Fresh Dough costs

The Fresh Dough segment’s costs include the cost of sales related to fresh dough and other ingredients company-owned and franchise restaurants require. In 2016, these costs came to $178.6 million, or 7.3% of the company’s total revenue. These costs reflected an increase from 6.8% in 2015. In 2016, the company opened 45 franchised restaurants and refranchised 27 company-operated restaurants. This refranchising could have led to an increase in its dough and other costs as a percentage of its total revenue.

G&A expenses

In 2016, Panera incurred G&A (general and administrative) expenses of $179.9 million, or 7.4% of total revenue. As we can see in the chart above, these costs increased as a percentage of sales. An increase in incentive-based compensation, increased expenses to support the company’s strategic initiatives, and higher legal expenses hiked the company’s G&A expenses.

D&A expenses

Given its increasing units and fresh dough manufacturing facilities—over 22 (company-owned manufacturing facilities) as of 2016—Panera’s D&A (depreciation and amortization) was expected to rise. In 2016, its D&A expenses totaled $154.4 million, or 5.5% of its total sales compared to 5.0% in 2015. The company’s management blamed the increase in its D&A expenses on its investment in company-owned restaurants and technology to support its growth initiatives.

Considering all of these costs, let’s discuss Panera’s operating income and margin performance.

Panera’s operating income

When we analyze profitability, we need to look at the trend in a company’s operating income, which means its remaining profits after operating costs. These are its profits before interest and taxes.

Falling revenue growth dented Panera’s operating income

In the chart above, we can see that the company’s operating income declined from 2014 to 2016. Its total expenses increased at a higher rate than its revenue, which caused its profitability to fall. In 2016, the company’s revenue increased by 4.2%, while its total expenses rose by 4.7%, lowering its profitable income.

In 2016, the company’s operating margin contracted to 8.6% from 9.0% in 2015. As we can see in the graph above, it declined from a peak of 13.3% in 2012. Its weak SSSG and the higher rate of increase in its expenses dented its operating margins in the previous four years.

Net income

Net income indicates the profits a company makes after deducting operating expenses, interest, and income tax expenses. In 2016, Panera earned $145.2 million, which represented a net margin of 5.2%.

In the graph above, we can see that Panera’s net profit and net margin increased from 2009 to their peaks in 2013. After that, both the company’s net profit and net margin fell. Higher interest expenses and a decline in operating profits lowered the company’s net margin in 2016. However, its income tax fell to 36.7% in the year from 36.9% in 2015.

In 2016, the company’s diluted EPS stood at $6.18, representing an increase of 6.7% from $5.79 in 2015. The growth in its EPS was the result of share repurchases. In 2016, the company repurchased 1.82 million shares for $371.2 million, implying an average share price of $204.46.

Slower revenue growth

In 2015 and 2016, Panera reported revenue growths that were lower than its CAGR of 12.9% from 2006 to 2016. Along with its weaker SSSG, declines in its new restaurant additions and refranchising caused lower revenue growth for it in these two years.

By the end of the first quarter of 2017, the company operated 2,042 Panera restaurants. Of these restaurants, 1,132 were franchised restaurants, and 910 were company-operated restaurants. In the same period, McDonald’s and Chipotle Mexican Grill operated 36,905 and 2,291 restaurants, respectively. Therefore, Panera has a huge scope for expansion. Let’s look at how the company has expanded its business.

How is Panera growing its units?

When a restaurant reaches maturity at its existing location—which means its revenue is growing at a stable, low-single-digit rate—a company can supplement its revenue growth by adding more units in newer markets or locations. A company needs capital to add company-owned units.

Panera Bread refranchised 75 company-owned restaurants in 2015 and 27 company-owned restaurants in 2016. The refranchising led the unit count of its company-owned restaurants to fall from 925 in 2014 to 902 in 2016. However, during the same period, the unit count of its franchised restaurants increased by 189 units to 1,134 units. So, the company focused on franchising to expand its business.

Correlation

From 2006 to 2016, the correlation between the company’s revenue growth and unit growth was 0.52. Correlation strength can be determined by how close this number is to one. The lower the number, the weaker the correlation. The company’s refranchising in 2015 and 2016 lowered the correlation between its revenue growth and unit growth.

Adding more units

In 2016, Panera increased its unit count by 64, including 63 franchised restaurants and one company-owned restaurant. During the period, the company opened 48 new restaurants, closed 20 underperforming restaurants, and refranchised 27 company-owned restaurants. It also opened 45 franchised restaurants while closing nine.

Meanwhile, Chipotle Mexican Grill added 225 units in 2017, while McDonald’s increased its unit count by 438 units.

Panera Bread needs capital to grow its restaurant units. Capital can be generated internally or sourced externally. Let’s look at how Panera is generating funds for its expenses.

What’s this capital for?

Panera Bread’s capex included expenses from its opening of new company-owned restaurants, remodeling of existing restaurants, and purchasing of restaurants from franchisees. The company also used capital to develop, remodel, and maintain its fresh dough manufacturing facilities. It also fulfilled other developmental requirements, such as IT and infrastructure.

Using internal and external finances to grow units

At the end of the first quarter of 2017, Panera Bread had cash and cash equivalents of $153.4 million compared to $105.5 million at the end of 2016. The increase in its cash and cash equivalents resulted from long-term borrowing of $99.5 million and $75.8 million worth of cash from its first-quarter operations. However, it used some of its cash for share repurchases, capex, and the repayment of long-term loans. By the end of the first quarter of 2017, the company’s long-term debt stood at $461.5 million. Meanwhile, Chipotle Mexican Grill and Potbelly used internal capital only to grow their units.

PNRA’s performance before going public

Now, let’s look at Panera’s stock performance before it was acquired by JAB.

Panera Bread delivered an impressive return of 470.5% from January 1, 2009, to July 17, 2017, when it ceased trading after JAB acquired it. Meanwhile, peers Chipotle Mexican Grill, McDonald’s, and Yum! Brands saw returns of $4,446.5, $2,486.5, and $2,925.8, respectively, in the period. In this same period, an investment in the S&P 500 Index would have returned $2,205.3.

In the graph above, we can see that there was a bump in Panera stock on April 5, 2017, when JAB announced its intent to acquire Panera for $315 per share. The offer price was 20.3% higher than Panera’s March 31 closing price.

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business plan panera bread

Do you need a business plan for a Panera Bread bakery store? A franchise business plan should include detail regarding the marketing, operational, financial, and growth strategy of the business and indicate where the bakery will be located.

Panera Bread Company is a chain store of bakery-café fast casual restaurants with over 2,000 locations, all of which are in the United States and Canada. Its headquarters are in Sunset Hills, Missouri, a suburb of St. Louis. The company operates as Saint Louis Bread Company in Greater St. Louis, where it has over 100 locations. Offerings include soups, salads, pasta, sandwiches, specialty drinks, and bakery items.

The following are a few questions to answer when opening a Panera bread franchise:

  • Where will the store be located?
  • Who is the target consumer profile?
  • What are demographic stats for the geographical area that the barber shop will locate?
  • What is the pricing strategy of the franchise?
  • Who are the most direct competitors?

If developing a franchise business plan seems like an overwhelming process and you do not have significant business planning and financial planning expertise, contact Capital West Advisors. Capital West Advisors develops high-quality plans at the most competitive rates in the industry and can develop a world-class Panera Bread business plan. Call us at (888) 300-3090 for a free consultation.

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By alex ryzhkov, resources on panera bread franchisee.

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Introduction

Opening a Panera Bread franchise can be a great business opportunity, and one that many entrepreneurs consider when thinking of ways to start up a successful business. With the specialized 24-hour baking system, successful brand name, and a vast selection of breakfast, lunch, dinner and catering options, it is no surprise that the restaurant has continued to grow and remain a leader in the industry.

According to the National Restaurant Association, overall spending in the US restaurant industry was projected to amount to a whopping $863 billion in 2020, representing a 3.6% increase from 2019 – further demonstrating that the restaurant industry is still booming.

But with any business venture, financial costs are of utmost importance. That's why here we are going to discuss how much it can cost to open your own Panera Bread franchise, and of course the potential profits to be made along with it.

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Startup Costs

To own and operate a Panera Bread franchise, startup costs can vary significantly depending on a number of factors. While some may be able to open a franchise with a total investment cost in the low six figures, others may require a mid-seven figure investment. Below is a list of the most common startup costs associated with owning and operating a Panera Bread franchise:

Franchise Fee

Opening a Panera Bread franchise is not inexpensive, but the opportunity to operate a successful business with the assistance of an experienced, well-respected franchisor can make it a very rewarding venture. The total estimated investment necessary to begin operation of a Panera Bread franchise ranges from approximately $1,100,000 to $1,400,000. This estimate includes the $35,000 non-refundable franchise fee and the cost of purchasing or leasing real estate and equipment. Please keep in mind that these estimates do not include additional funds needed to open the bakery café, such as the costs of working capital, inventories, opening inventory, local advertising, or other costs and fees.

In addition to the initial franchise fee, Panera Bread charges a continuing royalty fee 7% of the gross sales. The initial franchise fee for a Panera Bread is $35,000 . This fee may vary depending on the size and type of the proposed bakery-café operation and the location of the proposed bakery-café. Panera Bread’s Initial Franchise Fee is charged in connection with the signing of the Franchise Agreement and may be paid in full at the time of signing or paid in installments as set forth in the Franchise Agreement.

Panera Bread also requires that franchisees maintain a minimum net worth amount. The minimum amount of net worth that must be maintained will vary depending on the size and the location of the Bakery-Cafe, and is set forth in greater detail in the Franchise Disclosure Document.

Real Estate for Initial Location

Opening a Panera Bread Franchise requires an initial fees to cover the cost of setting up a franchised location. One of the biggest costs are finding the right building or property to house the restaurant, which can span anything from renovations of an existing building to building a new structure. Depending on the local property market, the size of the new building, and the work that needs to be done to it, the cost of rented or purchased real estate can vary greatly.

According to the latest statistical information , the average cost for a Panera Bread Franchise is between $1.2 million and $3.3 million , with real estate costs averaging $200,000 to $425,000. This amount goes towards the cost of buying or leasing the property, as well as conducting any necessary renovations on the building or for fitting the interior to the brand’s specifications. If a space needs to be constructed from scratch, the cost goes up significantly.

Another important cost to consider when opening a Panera Bread Franchise is the cost of the building’s land survey, potential environmental cleanup of the site, and fees related to building permits, permits for licenses, and fees to turn on utilities (water, electricity, etc.). These fees can range from $50,000 to $75,000 and will depend upon local requirements.

Building Construction Costs

If you're looking to open a Panera Bread franchise, you should be aware of the construction costs associated with building a restaurant from the ground up. According to a report from Restaurant Business, the average cost to build a fast casual restaurant - the category Panera Bread falls into - is about $400-$500 per square foot. This means that if you plan on building a 2,500 square foot restaurant, you can expect to pay anywhere from $1 million to $1.2 million in construction costs.

However, it is important to note that the type of building and the location can greatly impact the total construction costs. A restaurant in a city center is going to cost more to build than a restaurant in a suburban area. Additionally, there are many other factors that can influence the cost, such as the local zoning laws, the type of materials used, the contractor you hire, and the complexity of the design. For example, a restaurant with a drive-thru window is going to cost more to construct than a restaurant without one.

The best way to get an accurate estimate of the total construction costs for your project is to contact a local contractor and get a detailed quote. They will be able to provide you with a breakdown of the different costs associated with building the restaurant, including labor costs, material costs, permits, and other costs. Additionally, some contractors may even offer financing options to help you cover the costs.

Kitchen Equipment and Dining Room Furniture

When opening a Panera Bread franchise, it is important to consider the costs associated with purchasing the necessary kitchen equipment and dining room furniture. There are a variety of items that need to be purchased and the costs can vary depending on the size and scope of the franchise. According to the most recent statistics from the United States Small Business Administration, the cost of kitchen equipment and dining room furniture for a Panera Bread franchise can range from $40,000 to $200,000 .

The cost of kitchen equipment and dining room furniture for a Panera Bread franchise can include items such as ovens, stoves, refrigerators, freezers, dishwashers, and other appliances. Additionally, the cost can include the purchase of tables, chairs, booths, and other furniture for the dining room area. In some cases, the cost can also include the installation of the equipment and furniture, which can add to the overall cost.

It is important to note that this is only an estimate of the cost of kitchen equipment and dining room furniture for a Panera Bread franchise. The actual cost may be more or less depending on the size and scope of the franchise. Additionally, some franchises may require additional equipment or furniture, which can also add to the total cost.

When planning to open a Panera Bread franchise, it is important to consider the cost of kitchen equipment and dining room furniture. By taking into account the size and scope of the franchise, it is possible to get an accurate estimate of the cost. Additionally, it is important to factor in the cost of installation, which can add to the overall cost.

Interior Design and Decor

When considering the cost of opening a Panera Bread franchise, it's important to consider the cost of interior design and decor. The cost of interior design and decor for a Panera Bread franchise can range from $150,000 to $250,000 depending on the size of the franchise and the local market. This cost includes the cost of materials, labor, furniture, fixtures, and other interior design elements.

Construction Costs: The cost of construction can range from $50,000 to $100,000 depending on the size of the franchise and the local market. This cost covers the cost of building walls, framing, electrical, plumbing, and other construction items.

Furniture and Fixtures: The cost of furniture and fixtures for a Panera Bread franchise can range from $30,000 to $50,000. This cost covers the cost of tables, chairs, bar stools, booths, countertops, display cases, and other furniture and fixtures.

Decor and Accessories: The cost of decor and accessories for a Panera Bread franchise can range from $20,000 to $30,000. This cost includes the cost of artwork, lighting, rugs, wall coverings, and other decorative items.

Labor Costs: The cost of labor for installing furniture, fixtures, and decor can range from $20,000 to $30,000. This cost covers the cost of the labor required to install the items mentioned above. It also covers the cost of any additional labor needed to finish the project.

Point of Sale System and Technology

When it comes to opening a Panera Bread franchise, Point of Sale (POS) system and technology are two of the most important investments you will need to make. POS systems serve as a register, credit card processor, and inventory management system, all in one. According to the latest statistics, POS systems cost an average of $1,500 for the hardware and software, and an additional $500 for installation and training.

In addition to the POS system, you will need other technology to run a successful franchise. This includes laptops, tablets, printers, and other devices to assist with operations. The cost of these items can vary depending on the type and quantity of the devices. For example, a laptop typically costs $400 while a printer can cost anywhere from $100 to $300 .

Finally, you will need to invest in an online ordering system and other software. Depending on the provider, an online ordering system can cost anywhere from $7,000 to $25,000 . Other software such as analytics, payroll, and accounting can cost an additional $2,500 to $5,000 .

Overall, it is important to consider all the costs associated with point of sale system and technology before opening a Panera Bread franchise. The costs can add up quickly, so make sure you do your research and get the best deal for your business.

Delivery Service

The cost of opening a Panera Bread franchise is dependent on the size of the franchise, its location, and the services offered. Establishing a delivery service for your franchise may require additional costs. According to the Panera Bread franchise disclosure document, the estimated initial investment for a franchise can range from $611,000 to $1,647,000. These figures do not include the cost of establishing a delivery service.

If you plan to offer delivery services, you will likely need to purchase a delivery vehicle, hire additional staff, and buy the necessary equipment. Depending on the size of your franchise, you may also need to purchase a larger kitchen space to accommodate delivery orders. These costs can range from $50,000 to $100,000. You may also need to purchase additional equipment, such as delivery bags and insulated carriers, which can cost a few hundred dollars each.

In addition to the purchase of equipment, you will need to factor in labor costs for additional staff. Delivery drivers typically earn between $9 and $12 per hour, and you may need to hire several drivers to ensure efficient delivery. You may also need to hire additional kitchen staff, such as cooks and dishwashers, to help with the preparation of food for delivery orders. Depending on the size of your franchise and the number of delivery orders you receive, these costs can range from $10,000 to $50,000 per year.

Finally, you should consider the cost of marketing your delivery services. You may need to invest in paid advertisements, promotional materials, and other marketing efforts to let customers know about your delivery offerings. This can cost anywhere from a few hundred to a few thousand dollars, depending on the size and scope of your marketing efforts.

Overall, the cost of establishing a delivery service for your Panera Bread franchise can range from a few thousand to several hundred thousand dollars. The exact costs will depend on the size of your franchise, its location, and the services you offer. By taking the time to research the costs associated with delivery services, you can ensure that your franchise is successful and profitable.

Security Systems

Opening a Panera Bread franchise is a great opportunity for entrepreneurs to capitalize on a successful business model, but it does come with a hefty price tag. The cost of starting up a Panera Bread franchise includes the franchise fee, the cost of equipment and supplies, real estate, security systems, and employees.

When it comes to security systems, you will need to factor in costs for surveillance cameras, security guards, and other security systems. The exact cost will depend on the type of security system you choose, the size of the franchise location, and other factors. Generally, the cost of security systems for a Panera Bread franchise can range anywhere from $3,000 to $30,000 or more.

It is important to keep in mind that the cost of security systems is not a one-time expense. You will need to factor in the cost of ongoing monitoring and maintenance of the system. Additionally, you may need to pay for upgrades to the system over time. The cost of security systems can also vary greatly depending on the location and size of the franchise.

Given the importance of security systems in a business, it is strongly recommended that you invest in a quality system. This will ensure that your franchise is protected from theft and other security risks. It is also important to regularly inspect and maintain the security system to ensure that it is functioning properly.

Employees' Initial Training

Franchisees are responsible for providing the initial training of their employees. Panera Bread offers a comprehensive training program to help ensure that each employee is well-versed in providing excellent customer service. All employees who work in the bakery-café must successfully complete this training program.

The initial training program includes a combination of in-person and online training sessions. The in-person training takes place in a Panera Bread bakery-café and covers topics such as the philosophy of hospitality and the basics of customer service. The online training covers topics such as product knowledge, food safety, and operations.

The cost of the Employees' Initial Training is estimated to be $2,000 to $4,000 USD . This cost covers the cost of the training materials and the wages of the trainer. The cost also includes any travel expenses for the trainer if the training is held off-site.

The cost of the Employees' Initial Training is an important consideration for potential franchisees. The cost of the training can vary depending on the number of employees that need to be trained and the complexity of the training program. It is important for potential franchisees to factor in the cost of the training when determining whether or not they can afford to open a Panera Bread franchise.

Opening a Panera Bread franchise can be a great business opportunity with a potential for high revenue. The total investment for a Panera Bread franchise ranges from $1.5 million to $2.5 million , and it is important to consider all the aspects of the business that this investment covers: Franchise Fee, Real Estate, Building Construction Costs, Kitchen Equipment and Dining Room Furniture, Interior Design and Decor, Point of Sale System and Technology, Delivery Service, Security Systems and Employees' Initial Training.

It is important to keep in mind that the success of a Panera Bread franchise rests on multiple factors, such as the location of the franchise, the quality of the products and services provided, the marketing strategy, and of course, the dedication and hard work of the franchise owners. With the right approach and the right team, a Panera Bread franchise can be a highly successful and lucrative business.

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Business Wire

ST. LOUIS--( BUSINESS WIRE )--Panera Bread, a leader and innovator in the fast casual restaurant segment, today announced the opening of its updated urban store format in New York, the newest of several new formats targeted at more densely populated and non-traditional trade areas. With digital sales at Panera now representing 50% of total system sales, Panera now offers a portfolio of store formats designed to cater to the needs of an increasingly digital and off-premise guest. With more than 3 million average transactions each week from digital channels including the app, kiosk and web, Panera guests continue to seek freshly-prepared menu items with the increased convenience, customization, speed and ease that the digital experience enables.

“At Panera, our innovation has always been rooted in the guest and associate experience, how we can reduce friction, drive convenience and bring Panera to new places where we know the demand is high for the freshly-prepared food we serve,” said Eduardo Luz, Chief Brand & Concept Officer, Panera Bread. “With a flexible portfolio of cafe designs, we’re now able to bring Panera anywhere, from suburban cafes with double drive-thrus, to a digital-only Panera To Go and everything in between.”

Digital-Driven New Urban Store Formats Debut in New York

The new Panera urban format marries a 40% smaller footprint than traditional bakery-cafes with updated ordering kiosks, a fully digitized menu and a new tracking screen providing more detailed order status. Designed with only limited counter seating, the bulk of the bakery-cafe is geared toward a statement Rapid Pick-Up ® experience, with dedicated shelves for pick-up and to-go orders. It is also the first Panera bakery-cafe in the country that fully incorporates the new Panera brand world, featuring modern and inviting new art, and updated design touches and color palette. The new urban format will continue to provide the freshly-prepared menu offerings and bakery-forward experience that guests expect from Panera.

Following a successful test earlier this year, the first New York Panera To Go opens next month. Different from the new urban format, Panera To Go offers no dine-in seating, solely offering Rapid Pick-Up and Delivery shelves where guests and delivery drivers can easily pick up orders. With less front-of-house duties and simplified operations, Panera To Go associates can focus on crafting freshly prepared meals to meet the needs of a guest on-the-go. The two New York bakery-cafes are the first of several new Panera bakery-cafes planned for expansion in urban markets in the next year, along with a series of non-traditional locations in settings like hospitals and universities.

Enhancing the Guest and Associate Experience

Panera’s digital capabilities go beyond the format of the bakery-cafe, allowing for a differentiated and personalized guest experience and reduced friction for the bakery cafe associates. For the guest, the company has intentionally taken technology beyond the point of purchase, from contactless-dine in options, to a digitized order status board, to reorder and recommendation functions in the app. Future iterations of the new urban format plan to test new tap and go technology for an even more seamless experience for Unlimited Sip Club members. For associates, AI technology is used to auto reorder ingredients based on sales to labor scheduling and more.

Panera continues to test AI technology across multiple areas of the bakery-cafe. Earlier this year, it began testing Miso Robotics’ automated coffee brewing system, as it rolled out its Unlimited Sip Club subscription program. More recently Panera began testing OpenCity’s proprietary voice AI ordering technology, called “Tori,” for drive-thru orders, with the goal of maximizing efficiency and increasing speed of orders. Each AI test allows for Panera associates to focus more on freshly preparing orders and improving the guest experience.

Building on Technology & Digital Heritage

After pioneering bringing free-wi-fi into its bakery-cafes, in 2014 Panera unveiled what the company then called “Panera 2.0” – an investment in the guest experience creating new ways to order and receive food, including in-cafe kiosk, Rapid Pick-Up, and other digital enhancements which became the building blocks of Panera’s digital presence today. The Panera app is one of the top-rated restaurant apps and MyPanera ® , Panera’s loyalty program that began in 2010, has reached more than 50 million members. Last month, MyPanera introduced new choice-based rewards, allowing members to select their reward from multiple options based on their personal preferences, instead of a single, pre-selected reward.

To learn more, or to sign up for MyPanera, visit www.PaneraBread.com .

About Panera Bread

Panera Bread opened in 1987 as a community bakery, founded with a secret sourdough starter and a belief that sharing great bread is an expression of warmth and generosity. That vision holds true today with a robust menu of delicious, chef-curated recipes created with a simple principle: The Familiar, Made Fantastic™. At Panera, we serve food that we are proud to serve our own families, made with responsibly raised proteins and freshly prepared with Clean ingredients--food that does not contain the artificial preservatives, sweeteners, flavors, and colors from artificial sources set forth on our No-No list served in U.S. bakery-cafes. From crave-worthy soups, salads and sandwiches to flatbread pizza and sweets, we offer our guests more than great food. Our ethos of generosity drives us to meet our guests where they are through technology and through our shared values. We are stewards of our communities and the planet — with programs like Day-End Dough-Nation ® that donates unsold baked goods in the evening to local non-profits, or labeling climate-friendly low carbon Cool Food Meals .

As of November 3, 2022, there were 2,114 bakery-cafes, company and franchise, in 48 states and in Ontario, Canada, operating under the Panera Bread ® or Saint Louis Bread Co. ® names. Panera Bread is part of Panera Brands, one of the largest fast casual restaurant companies in the U.S., comprised of Panera Bread ® , Caribou Coffee ® and Einstein Bros. ® Bagels. For more information, visit panerabread.com or find us on Twitter (@panerabread), Facebook (facebook.com/panerabread) Instagram (@panerabread) or TikTok (@panerabread).

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Panera’s ‘strategic plan’ is driving sales but slashing profits

Though its investment in growth cut into third-quarter profits, Panera Bread said it plans to fuel future expansion of catering, delivery and Panera 2.0 , as they made sales headway during the third quarter and show long-term potential.

Comps at the fast-casual chain increased 2.8 percent year over year during Q3, while revenues increased 7 percent, to $665 million.

Net income fell 17 percent, largely due to increased labor costs and spending associated with a refranchising effort and the transition of 108 bakery-cafes to Panera 2.0 locations.

“Our initiatives to expand into several $1 billion-plus adjacent businesses, including catering, delivery and consumer-packaged goods, are also gaining traction,” CEO Ron Shaich said in a statement. “Despite the high level of pressure on our near-term earnings related to the startup and transition costs associated with our strategic initiatives, the progress we see gives us increased confidence in our strategic plan and its ability to drive expanded earnings growth well into the future.”

Executives said they planned to convert 25 percent of Panera units to 2.0 in six months, the equivalent of “more than one per day.”

Panera’s digital orders now account for 12 percent of sales, a figure that jumps to 22 percent at Panera 2.0 locations. “To our knowledge, this is the highest digital utilization percentage of any public restaurant company in the industry, exclusive of the pizza guys,” Shaich noted on a Wednesday earnings call.

Company catering sales grew by 12 percent during the quarter, driven in part by the development of Panera catering hubs.

Shaich said the chain has also been encouraged by small-order delivery tests being conducted in four markets, noting that the digital-ordering systems developed for Panera 2.0 can be “uniquely leveraged” for delivery orders. “Delivery is a real mass market opportunity for Panera, and one that offers significant potential for sales and earnings growth,” he said.

Yet he acknowledges there are challenges to executing full-scale delivery, namely figuring out how best to get food from the cafe to customers’ homes and offices, a distance Shaich referred to as the “final mile.”

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business plan panera bread

10 companies you'd think are American-owned but actually aren't

  • Companies like 7-Eleven and Ben & Jerry's seem like typical American brands.
  • However, some of the most "American" brands have been acquired by overseas companies.
  • Tiffany & Co., for example, falls under the control of LVMH, a French company.

Insider Today

Living in the US, it's easy to forget that only a few major companies are responsible for almost everything we buy . From cereals to beauty products, a few parent companies own most of the companies we use daily.

For example, a consumer could start their morning with a bowl of Cheerios, have Progresso chicken noodle soup for dinner, and enjoy Häagen-Dazs ice cream before bed, unaware that General Mills owned every aspect of their diet.

Similar to how General Mills owns many household-name brands in the US, plenty of global companies have purchased American companies to round out their portfolios.

It means that brands you might think of as all-American are actually owned by companies overseas.

Here are 10 of the most surprising classic American brands to have been acquired by international companies.

Tiffany & Co. was acquired by French luxury group LVMH in 2021.

business plan panera bread

The first Tiffany jewelry store opened in New York City in 1837, and it has since become an iconic American brand. With its signature Tiffany Blue boxes, the company has made its impact on American pop culture , with contributions to the Great Seal of the United States, the Vince Lombardi Super Bowl trophy, and campaigns with Beyoncé and Jay-Z. And, of course, who could forget Audrey Hepburn's starring role as Holly Golightly in "Breakfast at Tiffany's"?

However, despite its impact on American life and culture, the company began losing revenue in 2015, Fast Company reported, eventually leading to its acquisition by LVMH , or Moët Hennessy Louis Vuitton SE, for $15.8 billion in 2021.

The brand's headquarters remain in New York City, and under the leadership of Alexandre Arnault , the company has once again begun to thrive in the luxury world — the company even reopened its flagship store in April 2023.

German conglomerate JAB Holding Company owns Panera Bread.

business plan panera bread

The popular fast-casual restaurant was founded by Ronald M. Shaich and Louis Kane in 1987 as the St. Louis Bread Company, according to the company's website.

The brand became popular for its focus on fresh ingredients, and in 2017, JAB Holding Company purchased Panera Bread for $7.5 billion. JAB later grouped Panera with Caribou Coffee and Einstein Bros. Bagels under the company name Panera Brands.

Panera Bread has faced rising scrutiny since late 2023 due to its "Charged" beverages, with some customers accusing the company of failing to properly indicate the drinks' high levels of caffeine. The drinks have been the target of three separate lawsuits, two of which were wrongful death lawsuits . A spokesperson for Panera previously told BI that the company stands by the safety of its products, though it did add additional warning labels in October 2023.

In May 2024, it was reported that Panera would discontinue the Charged drinks , switching them for new items. Panera told Bloomberg the change was part of its "menu transformation."

American designer Marc Jacobs sold a majority stake of his namesake brand to LVMH in 1997.

business plan panera bread

From the grunge influences of the '90s to The Tote Bag, Marc Jacobs has been a staple in the American fashion scene for decades. He notably became the youngest designer to win the Council of Fashion Designers of America (CFDA) Perry Ellis Award for New Fashion Talent in 1987.

After Jacobs and his business partner, Robert Duffy, joined Louis Vuitton in 1997, he sold his majority stake to LVMH.

LVMH continues to own the Marc Jacobs brand, as well as other luxury fashion houses like Christian Dior, Givenchy, Celine, Fendi, and Loewe. In January, the company reported its brands had broken revenue records in 2023, bringing in €86.2 billion, or around $90 billion.

7-Eleven is owned by Seven & i Holdings, a Japanese company.

business plan panera bread

7-Eleven was founded in Texas in 1927 and grew exponentially to become one of the largest and most recognizable retailers in the world. In the US, the chain's Slurpees became so popular that a National Free Slurpee Day is celebrated annually on July 11.

What may come as a surprise is that the store is even more popular internationally, specifically in Japan .

In 2005, 7-Eleven, Inc. was purchased by SEJ Asset Management & Investment Company, which in turn is owned by Seven & i Holdings Co., Ltd., based in Tokyo.

Seven-Eleven Japan reported that as of April 30, 2024, there are over 21,500 7-Elevens in Japan. Meanwhile, Scrape It reported that as of March 2024, there are 9,207 stores in the US.

British company Unilever owns Vaseline.

business plan panera bread

In 1870, Robert Augustus Chesebrough created the brand Vaseline Petroleum Jelly in Brooklyn, New York. The product was a big hit and "by 1875, Americans were buying Vaseline Petroleum at the rate of a jar a minute," Vaseline said on its website .

The company has grown to include lotions, lip balms, hand creams, and body oils.

In 1987, Vaseline's manufacturer, Chesebrough-Pond's Inc., was acquired by the US arm of Unilever, itself a British company, for $3.1 billion, The New York Times reported.

It's now part of Unilever's "Beauty & Wellbeing" family which also includes TRESemmé, Simple, and Shea Moisture, among other brands.

Ben & Jerry's is known for its humble beginnings in Vermont, but the ice cream giant is also owned by Unilever — for now.

business plan panera bread

Ben Cohen and Jerry Greenfield began their famous ice cream business in Burlington, Vermont, in 1978 and are known not only for their countless delicious ice cream flavors but also for their progressive activism.

When the company was sold to Unilever for $326 million in 2000, Cohen and Greenfield maintained their right for the company "to have an independent board to guide its social mission," reported the BBC .

Ben & Jerry's has been vocal about its support for racial justice, LGBTQ+ rights, climate justice, and refugee rights, in addition to other causes . Most recently, its board has called for a ceasefire in Gaza, the BBC reported.

In March 2024, Unilever announced its plan to spin off its ice cream brands — including Ben & Jerry's, as well as Klondike Bars, Breyer's, Magnum, and Talenti — into a stand-alone business as part of a restructuring. The plan, which the company said will allow it to focus on its other brands, will be finished by the end of 2025.

Ralph Lauren Fragrance, a subdivision of Ralph Lauren, is owned by L'Oréal Group.

business plan panera bread

The name Ralph Lauren is synonymous with American flags, polo players, and preppy Ivy Leaguers.

While Ralph Lauren as a whole is still an American-owned company, the subdivision Ralph Lauren Fragrance was acquired by L'Oréal Group, which is headquartered in Clichy, France.

Ralph Lauren Fragrance belongs to the group's Luxe Division, which includes brands like Viktor & Rolf, Yves Saint Laurent, Valentino, and Giorgio Armani Beauty.

Stouffer's, best known for its frozen entrées, is owned by Swiss company Nestlé.

business plan panera bread

The same Nestlé that owns Nesquik chocolate milk and Toll House chocolate chips also owns Stouffer's.

Although the company was founded in 1924 as a restaurant called Stouffer's Lunch, frozen meals would eventually become its signature product.

Nestlé — the world's largest food-and-beverage company for more than a decade, as reported by Forbes — purchased Stouffer's in 1973 .

With tasty meals like lasagna and stuffed peppers, Stouffer's remains a staple in freezers across the US.

CeraVe was founded by American dermatologists in 2005 but is now owned by L'Oréal.

business plan panera bread

In 2017, Women's Wear Daily reported that L'Oréal acquired skincare brands CeraVe, AcneFree, and Ambi for $1.3 billion.

The popular skincare brand — which appeared in a standout 2024 Super Bowl ad featuring Michael Cera — now lives within L'Oréal's Dermatological Beauty division alongside Vichy Laboratories, La Roche Posay, SkinCeuticals, and Skin Better Science.

Krispy Kreme is a publicly owned company, but JAB Holding still holds a 44.77% stake.

business plan panera bread

Krispy Kreme is known for its glazed doughnuts and a memorable collaboration with Hailey Bieber .

Vernon Rudolph founded the brand in 1937 in Winston-Salem, North Carolina. Although its headquarters remained in the state, German conglomerate JAB Holding took the company private from 2016 to 2021.

Krispy Kreme has since become a public company again, but JAB still owns nearly half the company's shares, so although it's not technically internationally owned, there's a significant division worth recognizing.

business plan panera bread

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  • About Panera

Panera began in 1987 as St. Louis Bread Company, a humble community bakery founded with a sourdough starter from San Francisco and a dream of putting a loaf of bread in every arm. While our business has expanded well beyond St. Louis since then, that same sourdough starter is still used in our iconic sourdough bread and the craft of baking bread fresh each day remains at the heart of Panera Bread. Each day our trained bakers fill our bakery shelves with delicious freshly baked cookies, pastries, bagels, and a range of breads from focaccia to classic baguettes.

We believe in serving delicious, freshly prepared, Clean food made with carefully selected ingredients that we are proud to serve our own families. Our menu, crafted by chefs and bakers, features classic, comforting dishes, each with an intriguing twist.

We respect our planet and take measures to lessen our impacts. We believe in treating people with warmth, kindness, and respect, whether it’s a guest in our cafe or one of our associates. And we believe in helping our local communities , especially in times of need.

We’re also focused on improving quality and convenience. With investments in technology and operations, we offer omni-channel access to your Panera favorites – like mobile ordering, catering, and Rapid Pick-Up® for to-go orders, Curbside pick-up and delivery – all designed to make things easier for our guests.

Today, Panera operates as both Panera Bread® or Saint Louis Bread Co St. Louis Bread Company in 48 states, the District of Columbia and Canada. To find a location in your area, click here .

Panera Bread is privately held by JAB Holding Company. Panera Bread is part of Panera Brands, one of the largest fast casual restaurant platforms in the U.S., comprised of Panera Bread®, Caribou Coffee® and Einstein Bros.® Bagels. Learn more about Panera Brands .

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IMAGES

  1. Panera Bread Franchise Business Plan

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  2. Panera Bread Franchise Business Plan

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  3. Business Plan On Marketing Plan For Panera Bread

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  4. Craft your Panera Bread franchise plan with our example

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COMMENTS

  1. Panera Bread Franchises Costs $K

    Remi. May 30, 2024. Franchises. Panera Bread, originally founded as the Au Bon Pain Co. in 1981, has evolved into one of the most recognizable names in the fast-casual dining industry. The company, which rebranded to Panera Bread in 1993 after purchasing the St. Louis Bread Company, is headquartered in St. Louis, Missouri.

  2. Master the Art of Panera Bread Franchise: 9-Step Business Plan Checklist!

    Developing a business plan is crucial for starting a Panera Bread Franchisee. It outlines all aspects of the business, including finances, marketing, operations, and more. A well-written business plan can increase your chances of obtaining funding from investors, banks, or other financial institutions.

  3. SWOT Analysis of Panera Bread

    The healthiest things to eat at Panera Bread. NBC; Aravind, K. (2017, January 13). Panera Bread removes artificial ingredients from the U.S. menu. Reuters; Ringvald, G. (2019, January 27). Panera Bread appeals to a younger demographic through witty text. Medium; Maynard, M. (2017, April 3). Panera Bread May Be In Position To Pick One. Forbes

  4. Panera Bread Business Model and Growth Strategy

    Feb 17, 2015 by Brandon Gaille. The Panera Bread business model incorporates a focus on high quality foods at low-costs. This has been a growing trend within the entire food industry as of late, but especially within the quick service restaurants. In the past, restaurants have focused on providing clean facilities, excellent customer services ...

  5. Franchise Information

    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.

  6. An In-Depth Overview of Panera Bread

    An In-Depth Overview of Panera Bread. Panera Bread is a limited-service fast-casual restaurant company. In July 2017, JAB acquired Panera in a $7.5 billion deal and took it private. Originally ...

  7. Buy or Acquire Panera Bread Franchise: Essential Checklist

    Panera Bread's Business Model: The next step is to research Panera Bread's business model and understand its strengths, weaknesses, and opportunities. Panera Bread is a popular bakery-cafe chain that offers a variety of fresh and delicious food items, catering services, and a rewards program for loyal customers. ... The business plan and ...

  8. About Panera

    These pages offer an overview of Panera Bread, from a history of the company to biographies of our management team, to a listing of recent awards and recognition. We are Panera Bread and we believe that good food served in warm, welcoming spaces by people who care can bring out the best in all of us. In everything we do, we keep in mind our ...

  9. Panera Bread Business Plan

    A franchise business plan should include detail regarding the marketing, operational, financial, and growth strategy of the business and indicate where the bakery will be located. Panera Bread Company is a chain store of bakery-café fast casual restaurants with over 2,000 locations, all of which are in the United States and Canada.

  10. Panera Bread Bakes Plans For Growth By Investing In Customer ...

    Panera Bread Chief Growth and Strategy Officer Dan Wegiel joins author and futurist Brian Solis to discuss the magic between how food, wellness and digital experiences come together and how ...

  11. Launching a Panera Bread Franchise: Startup Costs Unveiled

    According to a report from Restaurant Business, the average cost to build a fast casual restaurant - the category Panera Bread falls into - is about $400-$500 per square foot. This means that if you plan on building a 2,500 square foot restaurant, you can expect to pay anywhere from $1 million to $1.2 million in construction costs.

  12. Panera Targets Expansion in Urban Markets Driven by ...

    As of November 3, 2022, there were 2,114 bakery-cafes, company and franchise, in 48 states and in Ontario, Canada, operating under the Panera Bread ® or Saint Louis Bread Co. ® names.

  13. Panera Bread

    Panera Bread Co. operates retail bakery cafes under the trade names of Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Cafe. It operates through three business segments: Company Bakery ...

  14. Panera Bread Franchise Business Plan

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  15. Panera's 'strategic plan' is driving sales but slashing profits

    Though its investment in growth cut into third-quarter profits, Panera Bread said it plans to fuel future expansion of catering, delivery and Panera 2.0, as they made sales headway during the third quarter and show long-term potential. Comps at the fast-casual chain increased 2.8 percent year over year during Q3, while revenues increased 7 percent, to $665 million.

  16. Panera Bread's Strategy, 4 Keys to its Success

    How much would you pay for an unlimited coffee fix? Well, if $8.99 per month works for you then you should subscribe to Panera Bread's unlimited coffee subscription plan, MyPanera+ Coffee. Panera Bread launched the monthly subscription in 2020 and subscribers receive unlimited hot coffee, iced coffee, and hot tea for that monthly fee.

  17. Panera cafes are getting a whole new look

    Panera's curbside, delivery and drive-thru business also "grew materially," the company said. Its rewards program, called MyPanera, has grown to 43 million members, it said.

  18. 10 American Companies You Didn't Know Are ...

    Panera Bread photo illustration. Justin Sullivan/Staff/Getty Images The popular fast-casual restaurant was founded by Ronald M. Shaich and Louis Kane in 1987 as the St. Louis Bread Company ...

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  20. Our History

    About Panera. Panera began in 1987 as St. Louis Bread Company, a humble community bakery founded with a sourdough starter from San Francisco and a dream of putting a loaf of bread in every arm. While our business has expanded well beyond St. Louis since then, that same sourdough starter is still used in our iconic sourdough bread and the craft ...

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    Elektrostal Geography. Geographic Information regarding City of Elektrostal. Elektrostal Geographical coordinates. Latitude: 55.8, Longitude: 38.45. 55° 48′ 0″ North, 38° 27′ 0″ East. Elektrostal Area. 4,951 hectares. 49.51 km² (19.12 sq mi) Elektrostal Altitude.

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    Cities near Elektrostal. Places of interest. Pavlovskiy Posad Noginsk. Travel guide resource for your visit to Elektrostal. Discover the best of Elektrostal so you can plan your trip right.

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    Just answer a few questions to get matched with a local General Contractor. Or browse through the list of trusted General Contractors in Elektrostal' on Houzz: See Elektrostal' Ge