Panera Bread 2006 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2006 Panera Bread annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

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»or Saint Louis Bread Co.»names. These bakery-cafes sell fresh baked goods,
made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complemen-
tary products through on-premise sales, as well as Via Panera»catering.
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»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»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 franchise-operated bakery-
cafes. The fresh dough is sold to both Company-owned and franchise-operated bakery-cafes at a delivered cost not
to exceed 27% of the retail value of the product. The sales and related costs to the franchise-operated 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:
December 26,
2006
December 27,
2005
December 25,
2004
For the Fiscal Year Ended
Number of bakery-cafes:
Company-owned:
Beginning of period ........................ 311 226 173
Bakery-cafes opened ....................... 70 66 54
Bakery-cafes closed ........................ (3) (2) —
Acquired from franchisee(1) .................. 13 21 1
Transfer to franchisee(2)..................... — — (2)
End of period ........................... 391 311 226
Franchise operated:
Beginning of period ........................ 566 515 429
Bakery-cafes opened ....................... 85 73 89
Bakery-cafes closed ........................ (2) (1) (4)
Sold to Company(1) ........................ (13) (21) (1)
Transfer from Company(2) ................... — — 2
End of period ........................... 636 566 515
System-wide:
Beginning of period ........................ 877 741 602
Bakery-cafes opened ....................... 155 139 143
Bakery-cafes closed ........................ (5) (3) (4)
End of period ........................... 1,027 877 741
59
PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)