panera bread: pay-what-you-can

The idea of running a pay-what-you-can organization is generally laughed at as a business model, but Panera is proving skeptics wrong. So far, the St. Louis-based company has three such eateries and they are turning a profit, according to the Chicago Tribune.
This week Panera opened its fourth pay-what-you-can Panera Cares location, in Chicago. Founder and co-CEO Ron Shaich tells the Trib that the neighborhood that it’s in is the perfect community for such a business because it has “million-dollar townhomes and people on the street.”
“When you walk in, it’s the full Panera experience,” Shaich, who hopes to open a new Panera Cares cafe each quarter, told the Trib. “When you go into a soup kitchen, the energy is so negative and the food is institutional and the experience is institutional.”
The idea is simple: consumers who can pay more will do so while those who can’t pay at all can work for an hour in exchange for food. The pay-what-you-can stores all work under the Panera Bread Foundation umbrella, which allows it to not worry about turning a profit.
The proceeds, the Trib reports, don’t go back into the company’s coffers. Instead, the foundation “gives the money to social service organizations that provide job training for at-risk youth,” who Panera then hire.
Back in February, one year after the first Panera Cares cafe opened in Clayton, MO, Shaich said in a Sustainable Brands presentation that about 20% of customers leave more money than the suggested donation with no pressure, while 20% pay less:

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Tom Foerstel : Founder & President

Tom Foerstel

Founder & President

Growing up in the San Francisco Bay Area in the 60’s, Tom developed a strong desire to create positive change for people and planet.


He went on to pursue his passion for art and design at Art Center College of Design in Pasadena, California, and worked for design firms in Southern California before moving to Boise, Idaho in the early 80’s. Foerstel Design opened its doors in 1985. Since its inception, the firm has cultivated a bold, happy, forward-looking team focussed on creating distinct and effective work on behalf of their clients.


An integral part of Tom’s philosophy is giving back to the community in which he lives — a company cornerstone that drives Foerstel’s long history of providing pro-bono services to local non-profit humanitarian and arts programs.


One of Tom’s proudest personal achievements is his ability to say Supercalifragilisticexpyalidocious backwards.