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Panera Bread Franchises Make $2.6M: 2022 Costs & Profits

Panera Bread is one of the most popular bakery franchises in the US, and for franchisees too. Indeed, with average annual sales of $2.6 million, Panera Bread isn’t your average bakery, it can be a very profitable franchise!

But with an investment cost of $2.3 million and (very) stringent eligibility criteria, are the profits worth the high costs?

In this article we’ll look at Panera Bread and the financial performance of its franchise-owned bakeries as per the latest Franchise Disclosure Document. We’ll see how much it actually costs, how much you can make, and more importantly, whether it’s a good investment.

Key stats

Franchise fee$35,000
Royalty fee5.0%
Marketing fee5.0%
Investment (mid-point)$2,291,000
Average sales$2,599,000
Sales to investment ratio1.1x
Payback period*[franchise_value_investment_payback]
Minimum net worth$7,500,000
Minimum liquid capital$3,000,000
* using 15% net profit margin

Compare Panera Bread vs. 1,000+ franchises

Investment, turnover, royalties, profits and more

What is Panera Bread?

They also offer artisan breads and have a regular menu for takeout and dine-in including pizzas, flatbreads, pastas, sandwiches, panini, warm grain bowl, etc.

The company was founded as The St. Louis Bread Company in 1987, but its name was changed to Panera in 1997. The company expanded into Canada in 2008. Panera Bread today has 2,164 locations in the US and 11 in Canada.

Panera Bread franchise: pros and cons

Owning a Panera Bread franchise is not easy. They have strict requirements. Here are a few pros and cons of Panera Bread franchise that you must know:

The Pros:

  • 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.

The Cons:

  • 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 much does a Panera Bread franchise cost?

The initial investment for a Panera Bread franchise is quite high than most of the others franchises. Indeed, you must invest $2,290,500 to open a Panera Bread franchised bakery cafe.

This estimated average can vary depending on many factors (your location, current market price, etc.). As per the latest FDD, the investment cost ranges between $1,117,000 and $3,464,000. 

The investment you are going to make would cover all the initial expenses that arise when a new bakery cafe is established excluding the real estate expenses.

In addition to the initial franchise fee of $35,000, fees include franchise fees, leasehold improvements, equipment, fixtures, furniture, supplies & inventory, signage, 3 months as working capital, etc.

Type of costInvestment amount
Initial franchise fee$35,000
Formation costs$888,000 – $3159,000
Operating expenses$194,000 – $270,000
Total$1,117,000 – $3,464,000
Source: 2019 FDD

Compare Panera Bread vs. 1,000+ franchises

Investment, turnover, royalties, profits and more

How much can you make with a Panera Bread franchise?

A Panera Bread franchise makes $2,599,432 in sales per year on average. This is definitely on the higher side vs. other bakery and even restaurant franchises in the US.

This figure is the average yearly sales of 1,099 Panera Bread franchised bakery cafes. The lowest sales for a store was $1,060,142 vs. up to $5,113,281 for the most successful bakery.

Is a Panera Bread franchise profitable?

With average annual sales of $2.6 million, the average Panera Bread franchisee makes $727,841 in profits per year. This corresponds to an adjusted EBITDA margin of 28%.

We estimated profits by using industry average cost percentages for COGS, labor and rent costs as the Franchise Disclosure Document doesn’t provide these numbers unfortunately.

Keep in mind though that EBITDA doesn’t include other non-operating expenses, taxes and other costs: as such, EBITDA isn’t the profit after all expenses have been paid for, that’s what net profit is instead (which we estimate below).

Profit-and-lossAmount ($)As % of sales
Royalty fees$(259,943)10% as per FDD
Adjusted EBITDA$727,84128%
* industry average

Is a Panera Bread a good investment?

As we just saw, Panera Bread clearly is a strong business: it records sales of $2,599,432 on average: this is 1.5x higher than the industry average..!

But there’s a hiccup, the investment cost is also quite high: $2,290,500 on average.

So is the investment cost worth the profits? That’s what we look at when we calculate the payback period: the time it takes for a franchisee to reimburse her/his original investment.

We found out that the payback period for a Panera Bread franchise is 5.9 years: as such it’s not necessarily a great investment. Indeed, anything above 5 years is mediocre.

Think about it: it would take you almost 6 years to recoup your investment, and this doesn’t even take into account the time value of money (which would easily add another year to our payback calculation).

Yet, do note that this is based on the average of the close to 1,100 Panera Bread franchises. Therefore, your bakery’s financial performance may be better (or worse) based on different factors (location, demand, experience, etc.).

If you’re applying for a Panera Bread franchise, download our business plan template below and visualize your financials and metrics like return on investment, payback and more.

Compare Panera Bread vs. 1,000+ franchises

Investment, turnover, royalties, profits and more

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)Payback (years)Min. net worth ($)Min. liquid capital ($)
Dunkin' Donuts,0001,056,5211.44.9500,000250,000
Krispy Kreme,0003,400,0004.11.62,000,000300,000
Little Caesars,022,850798,1130.88.5350,000150,000
Steak 'n Shake, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookies,2241,582,0903.12.1300,000150,000
Taco Bell,4131,650,0003.61.91,500,000750,000
Smoothie King,108573,2690.88.0300,000100,000
Jersey Mike's,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakes,6501,307,2802.42.7600,000150,000
Jimmy John's,650874,8451.73.9300,00080,000
Texas Roadhouse,209,5002,955,5340.79.5n.a.200,000
Kung Fu Tea tea250,125353,2371.44.7n.a.25,000
Burger King,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-In,467,0831,617,0001.16.01,000,000500,000
Panera Bread,290,5002,599,4321.15.97,500,0003,000,000
Pizza Hut,575906,9111.06.9700,000350,000
Dairy Queen Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Box,195,8001,755,5030.812.51,000,000250,000
Papa John’s,6951,101,1273.12.1750,000250,000
Five Guys,2251,203,3662.42.8500,000250,000
Carl’s Jr.,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbins Cream465,100316,8150.79.8250,000125,000
Applebee’s American5,137,9662,356,9650.514.51,000,000500,000
Denny's American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy's,174580,4411.35.0275,000125,000
Auntie Anne's,692343,1351.55.6300,000100,000
Firehouse Subs,186888,3561.44.6350,000100,000
Tropical Smoothie Cafe,500961,9692.23.0350,000125,000
Marco’s Pizza,625895,5232.03.3400,000100,000
Cold Stone Creamery Cream310,956417,5881.35.0250,000100,000
Church’s Chicken,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grill,3701,013,3611.35.21,000,000100,000
Tim Hortons,242,7501,188,2401.07.0500,000100,000
Checkers & Rally's,8471,039,7731.25.4750,000250,000
Charleys Philly Steaks,806786,2331.54.3500,000100,000
Buffalo Wild Wings,546,9002,534,1480.79.31,500,000750,000
Rita's Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurants,750851,2121.16.2350,000150,000
Hungry Howie’s Pizza,682806,8991.93.5750,000200,000
McAlister’s Deli,424,9631,865,8611.35.11,000,000500,000
Round Table Pizza,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eats,250972,9621.54.5
Taco John’s,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffee,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagels,075885,0111.25.71,000,000536,500
Great American Cookies,275452,7711.25.7250,000100,000
Wienerschnitzel dogs873,300880,9801.06.6600,000250,000
Blaze Pizza,4501,096,4321.37.9500,000300,000
Wetzel's Pretzels,571748,8572.03.4300,00050,000
Pizza Ranch,268,3001,174,0880.418.61,000,000297,000
Del Taco,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’s, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’s,7781,067,8160.419.01,000,000350,000
Biggby Coffee,575648,3520.320.0300,000100,000
Which Wich,375281,8860.322.2500,000150,000
Marble Slab Creamery Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizza,900865,7130.320.0300,000100,000
Huddle House,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecue,350612,9210.333.3500,000150,000
Chicken Salad Chick, Salads651,0001,202,0200.320.0750,000250,000
Golden Chick,975917,6092.52.62,000,000425,000
Waba Grill,000466,5361.06.51,000,000250,000
Bruster’s Ice Cream Cream663,925466,6960.79.5375,000150,000

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