Pay What You Can Restaurant Flourishes

May 19, 2011

Panera Bread has adopted an unusual business model at three of its 1500 locations across the country. At stores in Portland, Oregon; Dearborn, Michigan; and Clayton, Missouri customers are asked to pay what they can for their meal. One year into the "Panera Cares" experiment, the response has been overwhelmingly positive. 

60 percent of customers pay the suggested price of the meal, 20 percent of people pay more than the suggested retail price and 20 percent pay less than the suggested retail price. The operations functions like a "community kitchen" with the people paying more subsidizing meals for those that cannot afford them. 

So what does all this mean? "The lesson here is most people are fundamentally good," Panera founder and Chairman Ronald Shaich says. "People step up and they do the right thing."

At this point, the largest single donation was $500 for a meal. Panera also participates in traditional charity by donating unused baked products and other foods to the community. The restaurants function essentially the same as regular Panera locations, but have donation boxes instead of cash registers. Employees can also process credit card payments. 

How much would you be willing to pay at one of these locations? 

 
 

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