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Panera’s Founder Shares Tale of Vulnerability at RFDC


“Here’s the fear, the vulnerability that I felt,” said Ron Shaich, when activist investors targeted his company. “It was the loss of control of Panera.”

Joe Veen

The founder of Panera railed against what he called short-termism in opening remarks at the Restaurant Finance & Development Conference yesterday.

“The pervasive short-termism found in our capital markets is not only bad for our economy but bad for our country. As a society we must recognize the ways our markets are mis-serving our collective needs,” said Ron Shaich, who led Panera for 26 years through what he described as four long-term transformations, to 2,368 units, $6 billion in system sales, 11 million meals a week and a sale to JAB Holding Co. last year for just shy of $8 billion.

Along the way Shaich had to fend off activist investors, he said, whom he maligned for pursuing a quick pop in stock price at the expense of long-term company success. "I prepared for the arrival of activists and I got them,” he said. “Shamrock Holdings in 2008, who said we should raise our prices, and in 2015 Luxor Capital who said we should outsource technology and cut the costs. In both of those times we were fortunate enough to win.”

Shaich was refreshingly candid about the personal toll such fights have on businesses, citing as one example the bruising Buffalo Wild Wings fight that led to CEO Sally Smith’s early retirement.

He detailed Panera’s case in emotional terms. “Each time we got attacked, it took a powerful toll on our team. We got distracted. The reality is, if I didn’t own 17 percent of Panera and if I didn’t have the track record that I had, what would have happened? All of those things that seem so smart today would never have been able to get done,” he said.

“I wanted to talk about what activism feels like. People say it’s lonely at the top. But nothing’s more lonely than facing that the thing you spent your life working on” could be dismantled.

“When you’re in the middle of transformation, you can know it’s going to work but you can’t prove it to anybody. You can’t tell them what quarter or what month it’s going to kick in. Here’s the fear, the vulnerability that I felt. It was the loss of control of Panera. Why? It’s all those people in the organization that believed in me … For all of those reasons I lived in fear that I couldn’t take care of them and do my job as an honest steward. I couldn’t let that happen on my watch, because letting it happen on my watch would have killed me.

“The truth is Panera has been blessed because we had the wherewithal to fight these guys off. How does it happen for the next generation?"

The Restaurant Finance & Development Conference, presented by the Restaurant Finance Monitor, Franchise Times' sister publication, continues through tomorrow at the Wynn Hotel in Las Vegas.


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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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