Panera Bread founder Ron Shaich led a public firm for greater than 20 years, however that does not imply he is a fan of preliminary public choices or Wall Street.
More than six years after promoting the chain for $7.5 billion, Shaich is wanting again on his practically 4 many years on the helm of the corporate he remodeled right into a fast-casual restaurant big. Shaich’s new guide, “Know What Matters,” hits shops Tuesday.
The book starts along with his first entrepreneurial endeavors as a university pupil and ends with Panera’s blockbuster sale to JAB Holding. Shaich mixes retelling his profession with enterprise recommendation aimed toward entrepreneurs and CEOs navigating the highs and lows of main a publicly traded firm.
He cautions readers in opposition to chasing earnings, developments and the status of being publicly traded. Ironically, Panera Bread is mulling an IPO, however Shaich, who’s now not concerned with the chain, directs his recommendation towards founders.
The restaurant now often known as Panera Bread began as a merger in 1981 between Cookie Jar, based by Shaich, and the struggling French bakery Au Bon Pain. In complete, Shaich spent 32 years on the prime of the corporate, excluding the 2 years when he had technically retired however remained energetic as govt chair.
These days, Shaich is chief govt of Act III Holdings. He based the enterprise agency, which principally focuses on restaurant and leisure startups, with a few of his proceeds from promoting Panera. Act III invested in Cava in 2018, getting in years earlier than its initial public offering this year. Shaich owns a ten.3% stake within the Mediterranean chain, in line with public filings.
One of the most sudden items of recommendation in Shaich’s guide is his warning about going public. Shaich took Au Bon Pain public by means of an IPO in 1991. Even as Au Bon Pain purchased St. Louis Bread Company, renamed it Panera Bread after which shed Au Bon Pain to concentrate on Panera’s development, Shaich’s firm was publicly traded.
Still, Shaich mentioned he thinks preliminary public choices do not make sense for most companies.
“The actuality is for 90% of the CEOs that take an organization public, they stay to remorse it,” Shaich instructed CNBC. “Why? Because you are broadening, in an enormous method, the variety of constituents whom it’s a must to actually ship for.”
In the guide, Shaich recounts the varied antagonists he encountered in his profession, together with Wall Street analysts and activist traders attempting to tackle Panera. He shares his reluctance to cede management to outsiders.
“With the good thing about hindsight, I’ve turn into extra skeptical about elevating capital — each from enterprise funds and from the public market,” Shaich writes within the guide.
Shaich’s lack of appreciation for the standard enterprise capital mannequin additionally comes by means of in his personal agency. Act III would not have any outdoors traders, often known as restricted companions, which permits the agency to concentrate on the long run, in line with Shaich. The agency additionally gives steady capital to its investments so founders can concentrate on the enterprise quite than fundraising, he mentioned.
In reality, Act III’s Cava deal might be the agency’s most conventional enterprise funding. But Shaich, who serves as the corporate’s chair, is assured that the fast-casual chain is on the proper path. In his opinion, Cava CEO Brett Schulman could be a part of the ten% of chief executives who do not remorse going public.
“Cava is an organization that can succeed as a public firm. Quite frankly, as a result of it is a highly effective area of interest: Mediterranean,” Shaich mentioned. “This is an organization that is able to be public, as a result of it has a transparent plan for the following 1,000 shops.”
Shaich hasn’t been so complimentary to different latest restaurant IPOs. He mentioned at an Axios occasion earlier in October that salad chain Sweetgreen should not have gone public till it was worthwhile, the outlet reported. (Sweetgreen hasn’t reported a worthwhile quarter but, however executives mentioned they assume the corporate might break even for the complete 12 months.)
Shaich is much less clear about Panera’s attainable IPO. Last 12 months, Panera called off a take care of restaurateur Danny Meyer’s particular objective acquisition firm to be publicly traded for the primary time since JAB purchased the chain. Earlier this 12 months, the corporate announced it is making ready for an IPO because it unveiled a CEO succession plan.
Shaich declined to touch upon Panera’s anticipated IPO, citing a nondisclosure settlement he signed as a part of his exit deal from the corporate.
“But I’ll say this, I really like Panera … I root for it in each sense of the phrase,” Shaich mentioned.