Einstein Bros 2006 Annual Report Download - page 7

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granting additional franchise rights to current franchisees and entering into development agreements with new franchisees in 2007. Between the
two brands, we intend to open 10 to 15 additional franchise locations in 2007.
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Licensing. At the end of 2006, we had 96 license locations throughout the United States. We have license relationships with Aramark,
Sodexho, AAFES, HMS Host, Compass and CA1. These experienced companies operate foodservice businesses that are located in airports,
colleges and universities, hospitals, military bases and on turnpikes. We intend to open 40 to 50 new license locations in 2007.
We also use our franchise agreements to contract with qualified disadvantaged business enterprises (DBE's) either as licensees, fractional
franchisees, or franchisees under a traditional franchise agreement who do not meet the fractional franchise exemption to open restaurants in our
traditional licensee venues. As of January 2, 2006, we had 2 DBE franchisees operating stores in airport locations which operationally fall under
our licensing group.
Restaurant Concepts
Einstein Bros.
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 casual restaurant
environment that is consumer friendly, inviting and reflective of the brand's personality and strong neighborhood identity, and which visually
reinforces the distinction between the brand's fast-casual positioning and that of fast-food restaurants. On a prospective basis, we intend to design
and build new restaurants consistent with the layout of our prototype restaurant which is approximately 2,500 square feet in size. This will allow
for additional seating as well as the improved guest service system. During 2006, 2005 and 2004, Einstein Bros. company-owned restaurants
generated approximately 82% of our total restaurant sales.
Noah's
Noah's offers a menu that specializes in high-quality foods for breakfast and lunch, including fresh-baked bagels and other 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
premises 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. On a prospective basis, we intend to
build new restaurants of approximately 2,500 square feet that will incorporate substantially more seating than our current restaurants. During 2006,
2005 and 2004, Noah's company-owned restaurants generated approximately 17% of our total restaurant sales.
Manhattan
Manhattan offers 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 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 suburban neighborhoods or regional shopping centers. We have developed a new
prototype design for our Manhattan restaurants that will utilize approximately 2,300 square feet and provide for additional seating, freezer and
cooler capacity. Manhattan restaurants are designed to combine the authentic atmosphere of a bagel bakery with the comfortable setting of a
neighborhood meeting place.
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Remodel of Certain Restaurants
In late 2006, we remodeled selected restaurants to incorporate elements from the front of the house configuration of our prototype restaurant.
These remodels included new self-service coolers, an expanded coffee bar, a separate station for quick "to go" items and elements of our new