Panera Bread Experiments with “Pay What You Want” Model

Instead of kneading the bread, Panera is pushing the envelope – replacing a for-profit operation with a non-profit operation.  On Sunday, May 16, quietly, without any press releases or ribbon cutting, Panera Bread reopened the operation of a Clayton, Missouri store as a non-profit.  The model is “take what you need, leave your fair share.”

The St. Louis Bread Company Cares Café looks like a traditional Panera Bread restaurant.  It has the same menu.  Cashiers still take your order.  But they won’t hand you a bill, instead you receive a “suggested” bill representing the price of your order at any other Panera Bread location.  You can then make the payment, any amount you choose, above or below the suggested amount, in one of five donation boxes located within the store.  If you cannot pay in dollars, you can pay by volunteering your time.

The store’s expenses, including rent, salaries, and food costs will be paid for by the Panera Foundation.  If the pilot store can cover its food costs, this experiment will expand into two more cities within the next six-months.  From there, the executive chairman and former CEO, Ron Shaich, wants to expand the non-profit cafes into every area with a Panera Bread restaurant.

But first, the Cares Café has to support itself.  According to USA Today, this is the first time a national chain has adopted the “pay-what-you-want” model.  However it is not the first time it has been tried.  The One World Everybody Eats Café in Salt Lake City has been successfully operating since 2003.  Denise Cerreta has been running her café in the mixed for-profit/non-profit mode since 2003.  Since then she has helped open six other community cafes.  She has even published “Spirit in Business – A Guide For Starting a Community Cafe.” It was the One World Café that inspired Shaich.  After seeing a newscast mentioning One World Café, Shaich met with Cerreta.    Less than two months later the Company Cares Café was opened.

Will it work on a national level?  Only time will tell.  It will be fascinating to watch the experiment.  If Shaich’s passion and enthusiasm have anything to do with success, we’ll be seeing Company Cares Cafes in our own neighborhoods very soon.

Jennifer is a CPA, CMA, CIA, CFF with a passion for how sustainability can improve a business. She is the owner and President of The Sustainable CFO, making the world better one business at a time. The Sustainable CFO provides consulting, on-demand CFO services, and business coaching to sustainably themed small business. Jennifer has 24 years of experience improving the business operations for a variety of companies in industries such as construction, legal services, and hi-tech. She also teaches finance in the Green MBA program at Antioch University New England. You can visit the website at www.sustainablecfo.com or follow her on twitter @sustainablecfo.