Au Bon Pain Gives French Lessons

Frank Guidara focuses on food to restore authenticity to Au Bon Pain.

By Lisa Bertagnoli, Contributing Editor -- Chain Leader, 6/1/2003

Au Bon Pain President and CEO since January 2000, Frank Guidara has made major changes at the 25-year-old chain.

It’s one o’clock in the afternoon at an Au Bon Pain restaurant in Boston, and Frank Guidara is playing with his food. He sets a blueberry muffin onto a napkin, then slices through its sugar-sprinkled crust. The interior is golden and rife with plump blueberries, the crumb moist, the baked good big but not obscenely so.

This particular muffin, though, fails to pass muster. “It’s overbaked,” Guidara says, pushing aside the sliced-up remains.

Au Bon Pain CEO and president since January of 2000, Guidara has instituted major changes at the now-25-year-old chain. Greeters and peppy employees have bolstered its reputation for hospitality, lack of which was once the source of half the chain’s customer complaints. A store redesign that shows off food in a light, bright atmosphere has proven a winner, increasing sales by 25 percent despite fewer seats. The chain has installed nutrition kiosks in 75 percent of its 230 restaurants, despite protests from managers and franchisees.

But Guidara has spent most of his time and energy on Au Bon Pain’s menu. “We work on food every week,” he says. “Every single item on the menu has been reviewed, altered and modified.”

That blueberry muffin, for example, took three months to perfect as the menu development team sourced just the right type of blueberries and experimented with the mix to keep batter from turning an unappetizing green.

This intense attention to food is part of Guidara’s master plan to restore authenticity to the French-flavored bakery-cafe chain and, by doing so, build a rock-solid brand. By most indications, what he’s done so far is working.

“One of [Au Bon Pain’s] strengths is variety,” says Phil Lempert, a Santa Monica, Calif.-based retail consultant. “People can go into their restaurants every day and get something different and not feel it’s a tired menu. They’ve done a great job at that.”

Long-time franchisees welcome the changes as well. “The food we can offer is healthy and current, and it’s helped sales and our bottom line,” says Rob Goldblatt, an eight-unit Dallas franchisee. In 2002, sales at Goldblatt’s Au Bon Pain outlet at the Dallas-Fort Worth airport were up more than 20 percent, a figure that takes into account the effect of 9-11 on 2001 sales.

“The increase was driven by two things: the menu and new products,” Goldblatt says.

Intensive French
Guidara has good reason to spend so much time and effort on Au Bon Pain’s menu. He believes that over the years and through many management changes, the chain had lost its Frenchness. “For a brand to be successful it has to be authentic, and [Au Bon Pain] wasn’t authentic,” he says.

Nor did the chain boast any corporate culture. Says Jim Fisher, vice president of marketing, who joined Au Bon Pain in June 2002: “It wasn’t driven by culture but by responsiveness,” such as offering bundled meals when doing so was in vogue. Other cost-saving tactics, such as cutting the butter content in croissants, further eroded the chain’s authenticity.

Founded in 1978 by Louis Kane, Au Bon Pain was among the first “designer” bakery-cafe concepts in the country. In 1993, while headed by Ron Shaich, Au Bon Pain bought the regional St. Louis Bread Company. Shaich decided to expand the Midwestern concept rather than Au Bon Pain, and eventually sold Au Bon Pain to a private investor group. Compass bought Au Bon Pain in 2000.

Today, Panera is the biggest bakery-cafe chain in the country, with about 500 units and 2002 sales of $755 million. Guidara will not discuss Panera as a competitor. “They do a good job,” is all he will say.

Mike Smith, a restaurant analyst with Fahnestock & Co. in Kansas City, Mo., doesn’t think the two chains compete head-on, despite the concepts’ similarities and shared history. “Au Bon Pain is more downtown in major metropolitan areas, and Panera is more of a suburban concept,” he says. The two are equal in food quality and service, he says, “but Au Bon Pain is more of a fuel stop, and Panera is more of a restaurant.”

Admiration from Afar
Guidara, a Boston native, remembers admiring Au Bon Pain in the early 1990s, when he was president of the restaurant division at New York-based Restaurant Associates. (In a twist of fate, both RA and Au Bon Pain now share the same parent.) The Boston-based chain’s first New York location was in Rockefeller Center. To hear Guidara tell it, its sleek design, tempting food and long lines were the envy of all at Restaurant Associates.

“It was killer. They had little sandwiches and pastries in a premiere location, but they never opened anyplace else,” he says.

Then Au Bon Pain did open a second location, on 44th Street near the Met Life building. “I thought we’d have competition; then they opened up, and it was crap. It was poorly done, and New Yorkers weren’t attracted to it at all,” Guidara says. The failure served as an object lesson in brand-building: “One instance does not a brand make,” he says.

Guidara was in California, busy doubling growth at The Wolfgang Puck Company, when he was offered the chance to take the helm at Au Bon Pain. “I had mixed emotions about it,” he says. “How strong was the brand? I didn’t have the answers.”

The challenge of restoring Au Bon Pain to its glory days lured him back to Boston, as did the challenge of working in the quick-service arena. “At Wolfgang Puck we had been opening expresses and cafes, and they were hugely successful,” he says. “It wasn’t difficult to exceed guests’ expectations. I looked at Au Bon Pain and thought it had the same capabilities to exceed expectations.”

Building on Strengths
Three years into his tenure, Guidara is candid about the concept’s strengths and weaknesses. Hospitality is a strength; customer complaints about indifferent service have dropped 80 percent in the last two years. “We’ll never be satisfied, but we’re confident that when a person goes into Au Bon Pain, they’ll come out and say, ‘What a nice cashier,’” he says.

Then, of course, there’s food. In addition to spending three months perfecting a muffin, the chain spent $1 million installing a new coffee program and takes care to source top-notch ingredients. “When we use Brie, it’s double-cream Brie. We use Black Forest ham, Emmental Swiss. These are things people may or may not expect,” Guidara says.

Food accessories have come under scrutiny, too. Two months on the job, Guidara discovered that the tines of plastic forks were breaking off during use. So he sourced a new, heavy-duty utensil that costs $275,000 a year more than its predecessor. Along the same detail-oriented lines, he spent nine months searching for a round, fluted paper cup in which to present brownies. “It’s a small thing, but if you care about food, you care about those details,” he says.

The tinkering continues. Michael O’Donovan, vice president of food and beverage, has already imported French bakers and French flour to re-create the famed Parisian baguette. He’s searched the world for a steam-injected tunnel oven in which to bake that bread, and when he finds it, Au Bon Pain promises to offer Americans the best French bread this side of France.

Ownership by Compass is a strength, Guidara says, for several reasons, among them enhanced benefits for hourly employees, purchasing economies of scale and new venues for growth as Compass installs the brand name at its contract accounts. Not that the chain is incapable of finding growth areas on its own: At the end of 2000, Au Bon Pain agreed to oversee product development for Wild Bean Cafe, a foodservice concept in BP Connection convenience stores across the country. There are currently 145 locations, and 600 should be open by the end of 2005.

Offering customers nutrition information is a strength, as is packing as much nutritional value as possible into food. “If we can make something better without compromising taste, we’ll do it,” Guidara says, citing yogurt-based salad dressings and the addition of omega-3 essential fatty oils in condiments.

Store-level managers feared such a blatant display of nutrition information would hurt sales—a customer might not order that blueberry muffin if she knew it packed 480 calories—but management insisted. “We’re dealing with adults; let them make the decision,” Fisher says of Au Bon Pain’s customers, 58 percent of which are female.

The new design is a strength, for its sales-building prowess and because it will help Au Bon Pain court franchisees, a future growth vehicle for the company. “Right now we’re confident that we have a package that franchisees can be successful at,” Fisher says.

It’s worked for Goldblatt, whose newest location, in Dallas’ prestigious Crescent Court office building, sports the redesign. “It has a nice ambience,” Goldblatt says, and customers seem to enjoy the abundant displays of food.

Fixing Weaknesses
Ironically enough, the remodeling program is proving a weakness, too: The chain is spending money remodeling old stores rather than opening new locations. “Growth hasn’t happened because we have to right the ship, and that’s a weakness,” Guidara admits.

And, he says, Au Bon Pain is still in turnaround mode. “We’re a large, international chain [the company has 32 restaurants overseas], and it’s not being turned around overnight,” he says. Customers who suffered at the hands of rude employees will have to be convinced to return—no small feat because Au Bon Pain markets itself via new product rollouts and other events rather than through traditional advertising.

The corporate culture, stronger than it once was, still needs developing. It’s a difficult task, Guidara concedes, but vital to future growth. “If a culture is strong, people make the right decisions,” he says. “They’ll say, ‘Sample this,’ or, ‘Here’s a free cup of coffee,’ and make those decisions not because of food costs but because it’s right.

“It’s like Outback,” he continues. “‘No rules, just right.’ I don’t know how many people realize how meaningful that is.”