Restaurant as Charities: New concept of "Free" Proves Profitable
Panera Co. launched a nonprofit restaurant in Clayton, Mo., where customers are encouraged to pay whatever they can for food.
Chairman of the company, Ronald Shaich, says that he's pleasantly surprised that the experiment has proved to be better than he hoped, and that the results show that people are basically good.
Apparently, the honor system works. No one exploits the restaurant by taking a lot of food and not paying a penny. Customers who are richer pay the full price for the meal or pay extra as a donation, as some people do when they pay $20 for a cup of coffee. Some people will pay less than the suggested price of the meal, so it evens out more or less.
So far, about 60% to 70% of customers pay in full. About 15% leave a little more, and another 15% pay less or nothing at all. A handful of people have left big donations. All the above adds to about $100,000 in the restaurant's first month of business.
Panera operates 1,400 franchised and corporate-owned bakery-cafes across America and the company plans to expand the nonprofit model across the nation, opening 2 more locations within months.
Panera's nonprofit plan is the largest example yet of a concept called community kitchens, in which businesses operate partly as charities. Customers who can't pay can get a meal for free, no questions asked.
Panera spokeswoman, Kate Antonacci, said the nonprofit is considering locations that, like Clayton, are upscale but accessible to lower-income customers.
It's refreshing to see people exercise free will in such a way that self-regulates so that they pay what they can afford and donate what they can. It's a fine example of humanity at its best.
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