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Rising to the top Featured

10:53am EDT June 29, 2005

Before any decision is made at Breads of the World, management first considers the impact it will have on quality.

Jeff Rains is president of the company that owns 49 Panera Bread franchises in Columbus, Cincinnati, Dayton and Denver. He started Breads of the World with Doron Berger and Ken Rosenthal, who founded St. Louis Bread Co. (now Panera Bread) before selling it to Au Bon Pain Bread Co. to become a franchisor. Rains says quality is the company's foundation, and everything it does revolves around that.

"We wanted to be a fresh bakery as well as have everything else fresh -- soups, sandwiches, everything," says Rains.

While that requires the company to invest in more equipment than some other restaurants do, the investment doesn't stop with durable goods. Breads of the World also devotes a great deal of time and attention to its more than 600 employees.

"If we can get the right general managers, they can get the right people into the stores," Rains says.

And when it comes to choosing those general managers, Rains says the No. 1 characteristic the company looks for is a desire to serve customers.

"We can teach them about bread, but we can't teach them how to be great people and care about the customer," Rains says.

He says it's easy to rise above the competition with the right people in place.

"Competition isn't a challenge -- it doesn't drive our actions," Rains says. "We are driven internally to do better. Once you get the people part down, the rest goes easier."

Smart Business spoke with Rains about the challenges of competition, marketing and managing 49 locations.

There are a growing number of restaurants similar in concept to Panera. What are your strategies for competing for the same customers?

What attracted me as a customer was also what attracted me to get into the business, and that is the quality of the company. I worked with Ken [Rosenthal] when he started the company. He didn't make decisions based on money but based on quality.

It was an interesting, refreshing approach. He knew that customers cared about quality, and he made that part of the business model, which has helped make Panera different, and why we do what we do.

All of the menu items revolve around the bread experience, and we do things from scratch. This model allows Panera to be the star when it comes to quality. The chairman of Panera never says, 'Boy, we have this all figured out, let's not change a thing.' We have one of the best concepts in the country.

We work hard on product development and atmosphere. No one is sitting back and taking it easy. We work to make sure we have the best concept out there.

We have a lot of input from people at Panera LLC but not all great ideas originate at the corporate office. We listen a lot to our franchisees. They give us a lot of input on product development and quality. We've changed some of our products based on that input, like four or five years ago we changed the coffee.

What are your biggest marketing challenges?

One of the biggest challenges for us is to reach a bigger audience without dropping into the fray -- the great gray of mass marketing. You can throw so much money into mass marketing, but so much of it is tainted with claims that customers don't believe.

We have to be careful. We are researching how to reach big audiences without doing television ads.

The market in Denver is different than Columbus. In Columbus, we have 18 locations. Not everyone knows us but we have good name recognition. Our 11 Denver locations are large, and we are just beginning to get our name out. We hand out a lot of samples.

We are large enough in Columbus that we are a bigger player in community events. We are a donation partner with the Children's Hunger Alliance. We have donation cups at the stores and were able to give them a check for $32,000. Having that scale helps you do some of those things. We have an internal commitment that whatever the customer donates, we match in product donations.

How important is it to form a relationship with the customer?

People like their own Panera, the people there, the personalities. We want to stay grounded in the neighborhood -- that's what works, is the connection with the customers. The customers become emotionally attached.

It is rewarding to work here. I've been in the restaurant business for a long time, and this is a great place to work because of the environment and what you get from customers. It's dangerous to try and figure out how to squeeze every last dime out of a customer.

We want to be on the customer's side. It's not adversarial, so we don't have to start out convincing the customer that we're not a bad guy.

We don't shove products down a customer's throat. Customers want value. Cost isn't important -- value is.

What role does your partner, Ken Rosenthal, play at the company?

I'm biased when it comes to Ken. He is what you want in a partner. He is very honorable; I've never had to think about that part of it. I'm proud to say that Ken has a great ability to think like a customer. That's hard, especially day-to-day -- you can get so caught up in managing the business. But Ken has an intuitive sense of what customers will like and not like. And he is very knowledgeable about baking. That helps us a lot.

How important is it to hire the right people?

One of the things about this business is that it is low tech overall. The bulk of the business is labor-intensive and low-tech. Finding the right people, good people, is the challenge. It's not necessarily experience that is important but the desire to take care of the customer.

We have a person here that is responsible to hire general managers. But we are talking with The Ohio State University, for them to conduct a study for us to make sure we are satisfying our internal customers, too. Part of it may seem obvious -- it's little things like saying, 'Thank you.' Some are more striking.

I know the value our general managers bring the company. We are finding ways to make them never want to leave. People are not interchangeable. We work very hard, thinking about what people want.

We don't have really big egos here, either. No one says, 'We have to do it that way.' We have rules we don't break when it comes to quality, but on the other side, we go through a lot of ideas. We're not afraid to try new ideas. We really take a run at them, and don't punish people for trying.

How to reach: Breads of the World, (614) 457-8500 or www.paneraohio.com