Einstein Bros 2003 Annual Report Download - page 7

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As of December 30, 2003, there were 83 company-operated and 3 licensed Noah's locations in 3 states. 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 whimsically 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. Noah's menu 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 piled high 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 Noah's brand generated approximately 16% of our 2003 revenues.
Manhattan and Chesapeake
As of December 30, 2003, there were 178 franchised Manhattan locations in 16 states and 42 franchised Chesapeake locations in 12 states and
the District of Columbia. The average Manhattan and Chesapeake location is approximately 1,400 to 2,400 square feet with 24 to 50 seats and is
primarily
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located in urban neighborhoods or regional shopping centers. Manhattan and Chesapeake stores are designed to combine the authentic atmosphere
of a bagel bakery with the comfortable setting of a neighborhood-meeting place. 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, an extensive variety of breakfast and lunch sandwiches, salads, soups, coffees and
café beverages, soft drinks and desserts. The Manhattan and Chesapeake brands generated approximately 4% of our 2003 revenues. Manhattan
revenues are comprised of manufacturing revenues (primarily sales of dough, cream cheese and coffee to franchisees), royalty payments and fees.
Chesapeake revenues are comprised solely of royalty payments and fees.
New World Coffee/Willoughby's Coffee & Tea
As of December 30, 2003, there were 8 company-operated and 11 franchised New World Coffee and Willoughby's Coffee & Tea locations in
5 states in the northeastern United States. The locations are designed using natural materials and warm lighting to create the comfortable
atmosphere of an inviting neighborhood café. The locations offer up to 30 varieties and blends of fresh roasted coffee, in brewed and whole bean
format, a broad range of Italian-style beverages, such as espresso, cappuccino, café latte, café mocha and espresso macchiato, along with an
extensive variety of primarily breakfast and dessert items meant to complement the beverage offerings. The New World Coffee/Willoughby's
brands generated approximately 1% of our 2003 revenues. New World Coffee/Willoughby's revenues are primarily comprised of company-
operated location sales, manufacturing revenues, royalty payments and fees.
Business Strategy
Revitalize our Concepts
We have begun the process of identifying opportunities to revitalize our concepts. This process includes analyzing consumer survey data,
reviewing our restaurant operations in the areas of brand positioning, service systems and customer exposure, and developing a new store prototype
to validate modifications. We anticipate the process to result in a new "look and feel" of our stores, a more efficient flow of service and an
enhanced menu. The initial modifications to a select group of test stores are planned for the end of 2004.
Increase Sales Through Daypart Expansion
We intend to grow our business by continuing to focus on expanding our dayparts. We believe we have an attractive opportunity to grow our
lunch daypart to take advantage of the largest segment of the restaurant industry by offering the consumer a broad menu of high quality foods
throughout the day. Specifically, in 2003, we launched product initiatives to expand our selection of gourmet sandwiches, introduced hot lunch
offerings and broadened our selection of desserts and premium beverages. We also launched additional service initiatives to improve location-level
through-put and speed of service. We are introducing marketing initiatives to increase frequency, build check average and enhance reach.
Develop New Menu Offerings Based on Customer Trends
We are committed to providing high quality, delicious everyday food that the consumer will not find anywhere else and would not make at
home. Our research, a compilation from Harmen Atchinson, Lerner Research, ethnographic research from our existing customers and our own
focus groups, indicates that the Einstein Bros. and Noah's brand appeals to our customers because we start with premium quality ingredients and
turn them into a selection of fresh foods and drinks. We offer a broad variety of fresh-baked goods, sandwiches, signature salads, flavorful soups
and desserts. Our beverage