Panera Bread Is Rising: Best in Class

With slightly fewer than 2,000 stores, Panera Bread plans on growing its store base by 50% next year. "We are opening a new store every three to four days on average," Shaich says.

Indeed, West says Panera's best performing stores are the ones Shaich opened during the economic downturn in 2001.

Still, aside from rolling out new stores, Panera also has several other options for growth and repaying shareholders: "They are printing money faster than they can spend it," West says. "This leaves a lot of opportunities going forward, including offering a dividend, buying a franchisee or making an acquisition. But they have the advantage of being able to take their time to decide what they want to do with all that cash."

Shaich knows this isn't the case for most of their competitors. "The restaurant industry is a terrible business to be in," he says. "It is mature, fragmented and labor intensive -- that is, unless you have a place people will pass others to get to."

Shaich seems to have found that in Panera -- and he got there by going his own way.

-- Reported by Jeanine Poggi in New York

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