The Detroit Free Press reports the idea of pay-what-you-can restaurants is expanding, thanks in part to a national restaurant chain that has taken the initiative. The Panera Bread Foundation explained there are three Panera Cares Cafes open across the country and more are on the way.
Here's a look at why Panera Bread's experiment has been successful while others have failed.
Concept
The concept of pay-what-you-can restaurants involves meals being served like they normally appear on the menu. Retail prices are suggested, but not required. People leave what they can based upon their current ability to pay.
The idea works well for college students, struggling families and even those who can afford to pay full price. Panera has been one of just a few companies that has been able to pull off this particular business model, but it has been based partially upon the experiences of others.
Economic Recession
The economic downturn that began in 2008 inspired several restaurants to move toward a pay-what-you-can model for two reasons. First is that it was a way to draw in more business. During the beginning of the economic crisis, many small businesses folded. Some restaurants, according to the New York Times, started going with the concept simply to stay open. They figured bringing in some business was better than none.
The difficulty was that for-profit restaurants were trying to run partially as a charity. Places such as Tierra Sana in Queens, N.Y., folded after it offered the pay-what-you-can option just one day per week. Java Street Cafe in Kettering, Ohio, shuttered its doors after a year in operation.
Panera's first pay-what-you-can concept started in May 2010 in its own backyard. A Panera Cares Cafe opened in Clayon, Mo., a suburb of St. Louis. Panera Bread was founded in St. Louis as a bakery that brings fresh and organic foods to customers at affordable prices.
Today, there are three such restaurants in the Panera chain. There is one in Dearborn, Mich., and another in Portland, Ore.
Lots of Help
The three Panera Cares Cafes have had lots of help, whereas other restaurants didn't. Panera is a huge chain of nationwide restaurants. The Panera Bread Foundation also supports the cafes as the charitable arm of the restaurant. The idea was the brainchild of Ron Shaich, the company's co-founder and president. He felt it was an experiment in human kindness that has worked.
ABC News states Patrons who can't afford regular meals at Panera Cares Cafes are sometimes asked to donate time or get a job at the place. Simple tasks such as breaking down boxes or sweeping floors is a way to give back to the restaurant that is giving back to the communities in which they serve. Panera's model breaks even with about 80 percent of the income as normal restaurants. MSNBC reported the model also works because people can pay what they can at a particular time. Sometimes the same customer pays less, other times the same person will pay more.
Other charities have helped Panera Bread in terms of financing and moral support. The One World Everybody Eats Foundation was started in 2003 to help facilitate setting up a pay-what-you-can restaurant. The foundation's website has over two dozen restaurants listed from New Jersey to Oregon. Most of them are in Michigan and Alabama.
Time Magazine states celebrity restaurants are catching onto the idea. Singer Jon Bon Jovi opened Soul Kitchen in October 2011 in Red Bank, N.J. Thanks to predecessors like Panera Bread, the pay-what-you-can model is gaining popularity.
William Browning is a research librarian.
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