Panera Cares 2

Panera Cares Cafés: Inviting Dr. V for Lunch!

by Dennis Shaughnessy

Social enter­prise stu­dents learn early on in their stud­ies that there are a few giants in the field of social enter­prise that deserve spe­cial atten­tion.  Muham­mad Yunus of Grameen Bank (see Banker to the Poor), the founder of micro­fi­nance.  Paul Farmer of Part­ners in Health (see Moun­tains Beyond Moun­tains), and his ground­break­ing pub­lic health work in Haiti.  And finally, Dr. V (see Infi­nite Vision), who founded the remark­able Aravind Eye Care hos­pi­tals in India.  The late Dr. Venkataswamy rev­o­lu­tion­ized health care in India with his slid­ing scale fee struc­ture for eye surgery.

Along comes Ron Shaich, founder and co-CEO of Pan­era Bread, and most recently the cre­ator of Pan­era Cares cafés.  Pan­era Bread is among the most valu­able pub­licly traded restau­rant com­pa­nies, with more than 1,600 restau­rants and a mar­ket cap­i­tal­iza­tion of more than $5 bil­lion.  Pan­era Cares looks and feels a lot like Dr. V’s Indian eye care hos­pi­tals, adding an inno­v­a­tive new twist to the idea of cor­po­rate social responsibility.

Here’s how it works: you order lunch at a Pan­era Cares Café, which looks just like all the other 1,600 or so Pan­era restau­rants except no cash reg­is­ters, and when you’re done with your meal you pay what you think is fair, or what you can.  If you’re a banker or lawyer or busi­ness exec­u­tive who just fin­ished a quick $10 lunch, you might choose to pay just $10, but maybe you’ll pause and pay a few dol­lars more.  (No cash reg­is­ter, just sug­gested prices and a box to drop off your dona­tion.)  If you are a chron­i­cally home­less per­son, or a sin­gle mother whose unem­ploy­ment insur­ance has run out, you might not have $10 to pay for that same lunch, so you instead pay $5, or per­haps this time, noth­ing at all.

A stu­dent or prac­ti­tioner in the field of social enter­prise who stops into a Pan­era Cares café for lunch might quickly be drawn to Dr. V and Aravind Eye Care of India.  Let’s take a closer look at the two approaches to insur­ing their cus­tomers are treated with dig­nity regard­less of their sta­tion in life.

The wildly suc­cess­ful Aravind Eye Care hos­pi­tal sys­tem has long offered a “pay what you can” model, not for lunch but for cataract surgery.  If you have the means to pay the full cost of your surgery, you do.  If you have noth­ing, you pay noth­ing.  And if you have some­thing but not much, you pay what you can.  Each patient receives the same high qual­ity eye surgery, regard­less of the price he or she is able to pay.  What is remark­able about Aravind is that this impact dri­ven busi­ness model not only doesn’t harm prof­itabil­ity, it enhances it.  Aravind is not only the most effi­cient large-scale eye care hos­pi­tal sys­tem in the world, it is also among the most prof­itable hos­pi­tals of any kind and any­where.  Dr. V taught us that a relent­less com­mit­ment to effi­ciency and pro­duc­tiv­ity can allow an enter­prise the flex­i­bil­ity to charge patients a fair price for a high qual­ity ser­vice based sim­ply on their abil­ity to pay. 

Pan­era Cares cafés appear to be based on sim­i­lar ideas and val­ues, but man­age­ment takes a dif­fer­ent approach based on its mar­ket and busi­ness model.  Pan­era builds a new Pan­era Cares café, the cost of which is about $1 mil­lion, and donates it to the non-profit (501c3) Pan­era Bread Foun­da­tion.  Pan­era then oper­ates the new café on behalf of the Pan­era Bread Foun­da­tion.  The oper­at­ing costs of the Pan­era Cares café must be “sus­tained” by its cus­tomers, in other words, it’s up to the cus­tomers and the com­mu­nity to insure that its new Pan­era Cares café is finan­cially sus­tain­able going for­ward.  Cus­tomers, who can afford to, are encour­aged to pay their fair share or even more, while those with lit­tle pay less or noth­ing at all.  Like Aravind, the Pan­era Cares model is based on busi­ness val­ues like effi­ciency, con­sis­tency and qual­ity, and human val­ues such as trust, gen­eros­ity and compassion. 

There are Pan­era Cares cafés in Chicago, St. Louis, Detroit and Port­land, in addi­tion to the newer 3 Cen­ter Plaza address near Gov­ern­ment Cen­ter in Boston.

Let’s hope that Pan­era Cares cafés thrive and grow, to fur­ther demon­strate that it’s not only easy but hon­or­able to give a lit­tle when you can to those who need it the most.