Ampex Acquires Bakery Chain, Au Bon Pain

Panera Sells Au Bon Pain

Ampex Brands, a restaurant operator, is buying Au Bon Pain, the bakery chain, from Panera Bread (PNRA). The deal will preserve the Au Bon Pain brand, which Panera was in the process of phasing out. Through the deal, Ampex Brands will receive about $60 million in assets.

The transaction underscores the power of franchise companies in the restaurant industry. In the past, most franchisees owned one or two stores, but today some of them own hundreds of restaurant locations across different chains. In fact, some franchisees drive more sales than the parent companies of the restaurant brands they operate. Ampex owns more than 400 restaurants and convenience stores across the country.

Ampex Plans to Grow Au Bon Pain Brand

Terms of the Ampex deal were not disclosed but the company said the deal includes the assets and franchise rights for 131 more Au Bon Pain locations. Ampex plans to start opening additional Au Bon Pain locations, even though transit hubs and business centers still have not returned to normal following the pandemic. Many Au Bon Pains are located in airports, train stations, and business hubs. The company is betting that once US consumers return to pre-pandemic habits, demand for its products will rise.

At its height, Au Bon Pain had 300 locations, but because of increased competition and other factors, that number has been reduced to 171.

Franchisees Gain Power

Franchisees like Ampex have been able to weather the pandemic better than independent restaurant operators for several reasons. They have more cash in the bank and they were able to quickly adapt to new conditions through strategies like offering take-out.

Franchisees like Ampex as well as Carrols Restaurants (TAST) and Flynn Restaurant Group (RSTGF) are gaining more power in negotiations with restaurant parent companies. This is enabling them to push back on certain mandates and call for new products. For example, McDonald’s (MCD) launched a new chicken sandwich earlier this year in response to requests from franchisees. As the restaurant industry comes out of the pandemic, power dynamics are shifting between parent companies and franchisees.

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