In the movie Clerks, the convenience store cashier, Dante, occasionally takes a break from manning the counter. Rather than ensuring every customer paid for his or her items, he leaves a sign: “Please leave money on the counter. Take change when applicable. Be honest.” Dante believes customers assume they are being watched and will leave the correct amount.
While this scenario is just a movie, the upper-scale fast food chain Panera is experimenting with a similar approach. The company may not have been inspired by Clerks; more likely, they are taking a page from museums or parks where admission may be free but the facilities list a suggested donation. At one location in Missouri, Panera is taking the “non-profit” approach. The idea is customers pay what they can for a meal, based on the suggested price. In theory, rich people pay more and poor people pay less — or nothing at all.
According to the restaurant, 60% to 70% of customers pay the suggested price, 15% pay more, and 15% pay less or take their meals for free. The store does not seem to be attracting the area’s poor in large numbers as one might expect from an establishment offering basically free food, like a soup kitchen.
The store has not covered its costs yet, but the management expects it will within months. “Non-profit” doesn’t mean that the company doesn’t earn money above its expenses. An organization needs to make money to survive. Is a non-profit fast food restaurant a sound business idea? If you are a business owner, would you take the chance of giving your services for free by allowing your customers to pay what they wish?
Panera is taking the chance, relying on honesty and on the kindness of rich strangers to subsidize the poor or those who just don’t want to pay. They will be opening more of these restaurants where diners are free to leave as much or as little as they want in exchange for their meals.
Updated July 3, 2010 and originally published July 1, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.