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Panera bets on ‘pay-what-you-can’

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in Best-Practices Leadership,Leaders & Managers

They may look just like any other of the 1,600 Panera locations, but five Panera Cares cafés don’t use price lists or cash registers.

Instead, donation boxes on the counter read: “Take what you need; leave your fair share.”

Cashiers take orders and give receipts showing normal prices. The rest runs on the honor system, so that people who can’t afford food can eat free.

Key: The restaurants are in cities with a steady stream of mixed-income customers. In Boston, Panera Cares is at the Government Center, which gets steady foot traffic by tourists, a regular downtown office crowd, plus homeless people and the working poor.

There have been problems, of course. Many customers find the system confusing. Nearby high school students abused the system until their school intervened. Staffers tend to pass judgment on customers.

After three years, this pioneering effort—the first time a major U.S. corporation has put resources behind making pay-what-you-can work—is surviving. The five cafés are expected to serve more than a million people in 2013 while covering their food and operating costs.

CEO and co-founder Ron Shaich knows he’s not going to end hunger, but he sees the model as a challenge to other leaders to help however they can.

— Adapted from “The Panera Model: How to Do Good and Make Money at the Same Time,” Amy Sullivan, National Journal.

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