Einstein Looks to Grow Through Licensing

With an existing 20 licensed locations around the country, Einstein Noah Restaurant Group is set to open at least 15 additional licensed units before the end of the year. The company only began franchising in 2007, but has found success with its licensing business, working with corporations such as Aramark, Sodexo, and Compass to bring the brand to nontraditional spaces.

According to Paul Carolan, the company’s senior vice president of franchising and licensing, there are advantages to licensing that don’t exist with franchising. “They are really two different animals,” he says. “Licensing allows us to deal with just corporations that deal with contract feeding across the country—a lot of locations franchisees don’t even attempt to go in. Running an airport location and running a street business are two different worlds.”

As the current economic turmoil weighs heavy on the quick-service industry, especially brands in expansion mode, Carolan says licensing can be a good option for cash-strapped foodservice providers. “Licensing helps in this economic environment because they’re able to use our brand to accomplish more in one spot than having to keep multiple spots of distribution open,” he says.

For example, dining halls on college campuses and in hospitals are able to close other aspects of their operations and instead rely on Einstein to provide food and beverages throughout various dayparts.

Carolan quickly dispels concerns that the company’s simultaneous franchising efforts and licensing push might cannibalize each other. Instead, he says consumers often use the two types of locations very differently. “If you’re going to a hospital to see a family member. … They’re not thinking about the Einstein’s down the street; they’re not leaving the hospital,” he says.

Although Carolan is confident potential franchisees will be able to raise capital thanks to the brand’s underexposure, the week’s events on Wall Street and Capitol Hill will surely slow lending to the industry in the near future.

As the company’s licensing opportunities continue to grow, Carolan is cautious about the types of venues interested in partnering with the brand, saying maintaining brand consistency is the ultimate deciding factor when choosing locations.

--Blair Chancey