Panera Bread 2004 Annual Report Download - page 54

quarter. There were 33,238 and 26,493 shares purchased with a weighted average fair value of purchase rights of $5.69 and $5.42 as
of December 25, 2004 and December 27, 2003.
16. Defined Contribution Benefit Plan
The Panera Bread Company Savings Plan (the “Plan”) was formed under Section 401(k) of the Code. The Plan covers
substantially all employees who meet certain service requirements. Participating employees may elect to defer on a pre-tax basis up to
15% of his or her salary, subject to the limitations imposed by the Code. The Plan provides for a matching contribution by the
Company equal to 50% of the first 3% of the participant’s eligible pay. All employee contributions vest immediately. Company
matching contributions vest beginning in the second year of employment at 25% per year, and are fully vested after 5 years. The
Company contributed $0.3 million, $0.3 million and $0.2 million to the Plan in 2004, 2003 and 2002, respectively.
17. Business Segment Information
The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating
activities of the bakery-cafes owned by the Company. The Company-owned bakery-cafes conduct business under the Panera Bread(R)
and Saint Louis Bread Co.(R) names. These bakery-cafes sell fresh baked goods, made-to-order sandwiches on freshly baked breads,
soups, salads, custom roasted coffees, and other complementary products through on-premise sales.
The Franchise Operations segment is comprised of the operating activities of the franchise business unit which licenses qualified
operators to conduct business under the Panera Bread(R) name and also of the costs to monitor the operations of these bakery-cafes.
Under the terms of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera
Bread(R) name.
The Fresh Dough Operations segment supplies fresh dough items and indirectly supplies proprietary sweet good items through a
contract manufacturing arrangement to both Company-owned and franchised bakery-cafes. The fresh dough is sold to both Company-
owned and franchised bakery-cafes at a delivered cost not to exceed 27% of the retail value of the product. The sales and related costs
to the franchised bakery-cafes are separately stated line items in the Consolidated Statements of Operations. The operating profit
related to the sales to Company-owned bakery-cafes is classified as a reduction of the costs in the food and paper products line item on
the Consolidated Statements of Operations.
The following table sets forth certain bakery-cafe data relating to Company-owned and franchise-operated bakery-cafes:
For the Fiscal Year Ended
December 25,
2004
December
27,2003
December 28,
2002
Number of bakery-cafes:
Company-owned:
Beginning of period .............................................................................................................. 173 132 110
Bakery-cafes opened............................................................................................................. 54 29 23
Bakery-cafes closed .............................................................................................................. — (3) (4)
Transfer to franchisee(2)....................................................................................................... (2) — —
Acquired from franchisee(1)................................................................................................. 1 15 3
End of period....................................................................................................................... 226 173 132
Franchise operated:
Beginning of period .............................................................................................................. 429 346 259
Bakery-cafes opened............................................................................................................. 89 102 92
Bakery-cafes closed .............................................................................................................. (4) (4) (2)
Transfer from Company(2) ................................................................................................... 2 — —
Sold to Company(1).............................................................................................................. (1
) (15) (3)
End of period....................................................................................................................... 515 429 346
System-wide:
Beginning of period .............................................................................................................. 602 478 369
Bakery-cafes opened............................................................................................................. 143 131 115
Bakery-cafes closed .............................................................................................................. (4) (7) (6)
End of period....................................................................................................................... 741 602 478
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