Franchising

Paris Baguette accelerating path to 1,000 US units

Provided

July 14, 2021

Paris Baguette, which has over4,000 global units with only 100 in the U.S., is ready to accelerate its stateside growth. Although 2020 was a year in which most of the foodservice industry saw record losses, the Korea-based brand opened more than 15 U.S. locations and reported $2,235,198 in average unit volume across the system.

"We believe that the strength of our franchise can be measured most accurately by the strength of our franchisees, so we are laser-focused on ensuring that they prosper," Darren Tipton, CEO of Paris Baguette America, said in a company press release. "Our high AUV shows that we're continuing to make good on that promise."

With 52 locations in the pipeline and 30 franchise agreements in place, the chain has recommitted to its goal of reaching 1,000 U.S. units over the next 10 years.

Throughout the COVID-19 crisis, Paris Baguette remained open and maintained consistent sales without having to alter its core business model, Pete Bell, chief marketing officer, said in the release.

"All of our values as a company are centered around sharing moments of joy, and that's something that was especially important to people last year," he said. "We're not just sharing joy with our guests by providing amazing items and experiences, we are giving them a way to share joy with their loved ones, whether through a beautiful cake for a celebration or even just a perfect cup of coffee and a croissant for breakfast. You can't discount how much those moments mean to people."

Paris Baguette was also one of few brands to thrive without pivoting heavily toward off-premise services. Although it offers a number of off-premise options, including online ordering for pickup and delivery, Bell said sales through those channels accounted for only 5% of the brand's overall sales for the year.

"We've made sure that franchisees are equipped with everything they need to accommodate customers, but what we found is that most of our guests really appreciate the act of visiting a store, seeing the beautiful cakes and pastries, and picking something out," he said. "It's a genuine source of comfort for many people, and that joy for the customer translates directly back to joy for the franchisee."

A streamlined operational model ideal for multi-unit operations
Unlike other concepts that have expanded to full-service or otherwise adapted their model in an attempt to combine the benefits of other segments with their own, Paris Baguette has stuck to its small-footprint, grab-and-go model, which not only proved critical in the time of social distancing and the mass closure of dining rooms but also allowed the brand to carve out an enviable position for itself as the dominant player in its segment. A decade ago, the brand may have had to compete with cafe-chain behemoths, but those brands have largely vacated the space, opting instead for full-service models that proved ill-suited for the new COVID-shaped restaurant landscape, said Mark Mele, Paris Baguette's chief development officer.

"You see so many other brands spreading themselves too thin," he said. "They're moving into full-service and generally trying to do too much — they lose focus. And what we saw last year, unfortunately, was that many of those brands were unable to stay afloat when the consumer landscape shifted."

Each location requires a small team of focused professionals — "cakers, bakers and baristas," as the brand informally refers to its store-level staff — but Mele said the operational model reduces labor and allows for a favorable work-life balance. All items are prepared in the morning, so kitchens close early and employees don't have to work late, for example.

"If you look at most chain bakeries, the food might have been made hundreds of miles away from the store, and you can tell. It's not baked fresh," Mele said. The store doesn't feel like there's actually any baking going on there and that's not the feeling people are looking for when they're buying a cake or picking up a loaf of bread for dinner.

"Our teams are in their cafes every morning working, and you can instantly see the art, skill and passion that goes into every item we sell."

Adding franchisees
Paris Baguette has kicked off its growth plan with more than 47 stores sold since January 2020, and Mele said his team is confident it will hit its first benchmark of 40 new units open by the end of 2021, starting with Kansas City, Dallas, Philadelphia and a host of other markets in states from Oregon to North Carolina.

"We've had an influx of inquiries from aspiring franchisees in markets we haven't even entered yet," he said. "But we're not growing just for growth's sake — we're growing where we see opportunity, and right now we see a huge demand for Paris Baguette — both from potential owners and customers — in cities across the country, and we're excited to make the most of those opportunities."

The total investment to franchise with Paris Baguette ranges from $709,193 to $1,386,292, including a $50,000 franchise fee. Those entering into an area development agreement must develop a minimum of four stores.

"This is not a hard sell," Bell said. "So many people dream of owning their own business, and a bakery and cafe — with all the sights, smells and tastes that go along with that — is often right at the top of their list. Add to that the support of a corporate team and an operational model that has proven highly profitable and recession-resistant, and it's hard to find a more attractive business opportunity."