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http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
Einstein Acquisition in 2001 was accomplished by issuing a substantial amount of short-term debt and mandatorily redeemable preferred equity,
which have since been refinanced and restructured. In 2004, we began an evaluation of our brands and their significance and contributions to our
overall strategic business plan. As a result of this evaluation, we sold the assets of Willoughby’ s to the original founders and in 2005, we formed
an exit strategy related to the Chesapeake brand.
Restaurant Concepts
Einstein Bros. Bagels and Einstein Bros. Café (Einstein Bros.)
Einstein Bros. is a national, quick casual restaurant chain. Einstein Bros. offers a menu that specializes in high-quality foods for breakfast and
lunch, including fresh baked bagels and hot breakfast sandwiches, cream cheese and other spreads, specialty coffees and teas, creative soups,
salads and sandwiches, and other unique menu offerings. The average Einstein Bros. location is approximately 2,200 square feet in size with
approximately 40 seats and is generally located in a neighborhood or regional shopping center. We use sophisticated fixtures and materials in the
brand’ s design to create a restaurant environment that is consumer friendly, inviting and reflective of the brand’ s personality and strong
neighborhood identity, and which visually reinforces the distinctive difference between the brand’ s quick casual positioning and that of quick
service restaurants.
In addition to our core bagel offerings and expanded breakfast menu, our Einstein Bros. Café offers a more extensive lunch menu with a
culinary focus on innovative items using fresh and high quality ingredients. Menu offerings include hand crafted gourmet sandwiches, hearty
soups, innovative salads, fresh baked goods, premium coffees and other café beverages. The restaurant’ s layout is conducive to meetings, family
meals, and groups dining out together. During 2004, we opened our first Einstein Bros. Café. We currently have eight locations operating under the
Café concept in the Denver and Colorado Springs, Colorado markets. Six of the eight locations were previously Einstein Bros. Bagel restaurants
and were converted into Einstein Bros. Cafés. Based on consumer response, we are incorporating some of the
2
proven elements from the Einstein Bros. Cafe concept into the remodeling of several Einstein Bros. Bagel restaurants. With the resurgence in our
Einstein Bros. Bagel restaurants, we are focusing our efforts to ensure that we enhance our guest’ s experience, increase the speed of service, and
maintain a common theme in our Einstein Bros. Bagel brand while maintaining the neighborhood feel of the restaurants. As we move forward, our
growth plans are to open Einstein Bros. Bagel restaurants that reflect elements of our Einstein Bros. Café in-store design.
During the fiscal years ended 2005, 2004 and 2003, Einstein Bros. company-owned restaurants generated approximately 82%, 82% and 81%
of our retail sales, respectively.
Noah’s
Noah’ s is a quick casual restaurant principally located on the West Coast. Noah’ s offers a menu that specializes in high-quality foods for
breakfast and lunch, including fresh baked goods, made-to-order deli style sandwiches, including such favorites as pastrami, corned beef and roast
beef on fresh breads and bagels baked on location daily, hearty soups, innovative salads, desserts, five fresh-brewed premium coffees daily and
other café beverages. The average Noah’ s location is approximately 1,800 square feet in size with approximately 12 seats and is located in urban
neighborhoods or regional shopping centers. We use elaborate tile work and wood accents in the brand’ s design to create an environment
reminiscent of a Lower East Side New York deli, which reinforces the brand’ s urban focus with an emphasis on the authenticity of a New York deli
experience. During the fiscal years ended 2005, 2004 and 2003, Noah’ s company-owned restaurants generated approximately 17%, 17% and 18%
of our retail sales, respectively.
Manhattan
Our Manhattan brand represents the majority of our franchise operations and is predominately operated in the Northeast. The locations offer
over 20 varieties of fresh baked bagels, as well as bagel sticks and bialys and up to 15 flavors of cream cheese, a variety of breakfast and lunch
sandwiches, salads, soups, coffees and café beverages, soft drinks and desserts. The average Manhattan location is approximately 1,400 to 2,400
square feet with 24 to 50 seats and is primarily located in urban neighborhoods or regional shopping centers. Manhattan restaurants are designed to
combine the authentic atmosphere of a bagel bakery with the comfortable setting of a neighborhood meeting place.
Chesapeake
Our Chesapeake brand is operated on the Mid-Atlantic Coast. Chesapeake locations offer a menu that specializes in bagels and an extensive
array of cream cheese flavors. The locations also offer breakfast and lunch sandwiches, soups, salads, coffees and café beverages, soft drinks and
desserts.
New World Coffee