Community cafes offer a ‘pay-what-you-want’ business model

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Community cafes offer a ‘pay-what-you-want’ business model
Image Credit: Panera Cares
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Imagine a store where there’s a suggested price for every item, but you can pay what you wish, from zero to full price or more.

That’s a charitable effort that has been explored by big restaurant chains like Panera and some independent entrepreneurs across the country.

Read more: Fish fraud: You probably have no idea what’s actually in the seafood you order

More community cafes launching

The latest of these so-called ‘community cafés’ to launch will be a small business called Eat Café on Oct. 19 in Philadelphia.

To give you an idea of the pricing, a three-course meal with an entrée like Cuban black beans with braised chicken or pork will come with a suggested price tag of $15 at Eat Café, according to Business Insider

The café will be a farm-to-table concept that relies in part on occasional donated food from grocers like Shop-Rite, Whole Foods and Trader Joe’s. Grocery chain Giant Food has signed on to provide daily donations of food that would otherwise expire from its shelves.

There will also be grants from some unnamed corporate sponsors. And, of course, diners who wish to pay more than the suggested price will help provide meals for those less fortunate.

Panera has long been in this space

The idea of a pay-as-you-wish eatery may sound new, but it’s really not.

Panera Bread Co. launched its Panera Cares initiative in 2009 and now has three community cafés in operation—Clayton, MO., Dearborn, MI and Boston. Two additional locations—Portland and Chicago—have since been shuttered.

Panera now reports that 60% of people pay the suggested amount, while 15% to 20% pay more and 15% to 20% pay less or nothing at all.

All the profits from these Panera locations go to charity. The Clayton store alone generates revenues of $100,000 a month. There’s also a net profit of $4,000 a month that’s being used for a job training program for at-risk youths. In fact, some of the kids who benefited from the training program now work at Panera locations!

‘I have to count myself among the cynical who thought this pay-what-you-want business model wouldn’t work when I first heard about,’ Clark says. ‘I didn’t think that those left to their own devices would do what they should do. But I’m happy to report that I was wrong!

Read more: Never eat these 6 foods past expiration date

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring unique savings tips to men and women like him who must face life without their spouses. He can be reached at [email protected]
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