How this Small-Town Dillon, MT Franchise Reinvented its Offerings to Take on Panera

Great Harvest Bread’s Brand Evolution Addresses Consumer Demand and Resolves Pain Points for Multi-Unit Franchise Owners

DILLON, Mont. — Great Harvest Bread Co., known for serving the finest quality specialty bread is a rising direct threat to Panera and other cafe and sandwich competitors as the 43-year-old brand is now serving more than just its signature handmade loaves and growing rapidly in size.

Great Harvest franchisees and brand leaders grew tired of being subtle about the distinctive differentiators that make them a slice above the rest. The company took what they already did better – baking bread from the freshest ingredients, including fresh-milled Montana wheat – and reinvented its menu, business model and morphed into the newest bakery cafe franchise to be reckoned with.

Notable Growth

Bakery cafes are the key element in Great Harvest’s new hub and spoke model, which allows multi-unit owners to go more places with a smaller footprint while reaping the full benefits of both a central bakery cafe and multiple cafe-only locations. The bakery cafe acts as the hub, supplying fresh bread throughout the day to the spokes, or cafe-only locations, in surrounding communities.

In the two short years since Great Harvest debuted this model, the new hub and spoke locations have grown to make up nearly 22 percent of the franchise system. Franchise owners are recognizing the profitability of growing strategically through hub and spoke locations, and the proof is in the numbers:

• Great Harvest opened eight new locations in 2018
• In 2018, the number of signed stores grew by 17 percent
• In 2018 and Q1 of 2019, Great Harvest signed 33 new format stores – 9 bakery cafes and 24 new cafes
• Hub and spoke agreements were signed in eight new markets in 2018, including six bakery cafes and 13 new cafes
• Nine new cafes signed to existing markets

“Great Harvest is no longer what it used to be. We are reinvented and franchisees new and old have seen the the impact it has had on their business,” said Eric Keshin, president of Great Harvest Bread Co. “No one else has the strength, consistency and high bread-baking standard to do what we’re doing and stand tall against the giant. By pairing who we are with our hub and spoke expansion strategy we saw incredible growth in 2018.”

While generations have grown up on the freshly-baked, artisan specialty bread served at Great Harvest, there has been a perpetual presence of specialty diets, which sparked a movement among the leadership team to offer more than delicious, daily-made bread. The franchise found that by adding approximately 35 seats, public bathrooms and an expanded menu including grain bowls, salads, hot/cold sandwiches, soups, fountain drinks, an espresso machine, desserts and more to bakery cafe locations that sales jumped and the variety offered something for everyone.

The Hub-and-Spoke Model

Great Harvest’s hub and spoke model enables entrepreneurs to become successful multi-unit business owners by offering the option of expanding their number of units with additional cafe-only businesses around a centrally-located full bakery cafe. This allows franchisees to go into high-traffic areas with as little as 1,500 square feet, opening cafe doors in downtowns where competitors cannot because of the large amount of space they require. The hub and spoke model provides an incomparable investment opportunity that allows someone to own five Great Harvest Bread Company locations for the price of a single Panera and cover more territory.

“With our carefully crafted hub and spoke business model, we ensure our franchisees will be able to efficiently out-bake and out-localize the competition with our signature, made-from-scratch-daily products,” said Great Harvest Bread Chairman and CEO Mike Ferretti. “It’s cost effective for multi-unit owners looking to overcome Panera’s restrictions by opening smaller-sized spokes in high-traffic areas, all while achieving better quality control as you’re your own supply chain.”

There are more than 190 independently owned Great Harvest locations across the U.S. However, many fans and loyalists often mistake the franchise for a ‘mom and pop’ due to its freedom franchise model, which allows each owner to choose their own pricing, décor, menu items and more. Customers have come to expect local flavors and ingredients from each Great Harvest they visit, proving the franchise is anything but cookie cutter.

Multi-unit owners especially appreciate the freedom franchise because unlike other franchises, with Great Harvest they can tweak their local offerings, set their own pricing in order to be competitive in their local market and have control over advertising support. Owners are put in the driver’s seat while simultaneously being able to tap into the benefits of a proven system and a network of franchisees for additional support.