Industry News | November 19, 2010

Heading Into Q4, Einstein Bros. Carries Momentum

Einstein Bros. Bagels announced that it is entering the fourth quarter of 2010 with a momentum cultivated from three quarters of transaction and franchising success.

James O’Reilly, chief concept officer for Einstein Bros., says the company wants to be the “fastest-growing fast-casual restaurant chain in America,” and that both organic transaction growth and franchising efforts are critical to that effort.

Despite the recent economic slump, O’Reilly says transactions over the last three quarters have satisfied company executives.

“In a down economy and when consumers have less money to spend, we want to make sure we’re proving compelling innovation and compelling value proposition to the consumers, so that we’re winning their loyalty and frequency day in and day out,” O’Reilly says. “When I look at the business and the executive team looks at the business, we’re encouraged by the response that we’re seeing.”

The company is stepping up its franchising and licensing efforts heading into the final quarter of the year.

Einstein Bros. has opened seven locations so far in 2010, and has another seven set to open in the next two months. Another 34 units are planned through multiunit agreements in South Bend, Indiana; Reno, Nevada; Albuquerque, New Mexico; Palm Beach County, Florida; Chicago; and Phoenix.

But O’Reilly says the company is focusing primarily on three markets for growth in the near future: Dallas/Ft. Worth, Denver, and Baltimore/Washington, D.C.

“The economies are strong, consumers are more confident, and our business is thriving,” he says. “Those are the markets where we want to drive saturation.”

The economic slump, O’Reilly says, did not affect the type of franchisee attracted to and sought by Einstein Bros.

“The primary affect of the recession on franchising has been access to capital among prospective franchisees,” he says. “Outside of that the profile of the franchisee that we’re seeking has not changed, and the profile of the franchisee that we’re attracting has not changed. We attract experienced, multiunit operators who see the appeal of a breakfast concept … with great economics.”

Einstein Bros. is also experiencing success with licensing the brand for nontraditional locations such as airports, hotels, and hospitals. The recent opening of a unit in Duke Children’s Hospital in Durham, North Carolina, kicked off a partnership with Starlight Children’s Foundation, through which the fast casual will donate a mobile Fun Center to each hospital supported by the foundation it opens in.

O’Reilly says the health care sector has become an important part of the Einstein Bros. growth strategy because facilities are looking for “more complete,” healthier alternatives for their foodservice offerings.

By Sam Oches

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.