$174

Business Description

Panera is a Delaware limited liability company, which was formed on December 31, 2001, when Panera, Inc., a Delaware corporation, was converted to a limited liability company. Panera was originally formed under the name of ABP Acquisition Corp. on November 10, 1993. Subsequently, it changed its name to “Saint Louis Bread Company, Inc.” in December 1993 and then to “Panera, Inc.” in July 1999. Panera is a wholly owned subsidiary of Panera Bread Company (referred to as “Panera Bread Company” or “PBC”), which was formerly known as Au Bon Pain Co., Inc. Our principal place of business is 3630 South Geyer Road, Suite 100, St. Louis, Missouri 63127. Our registered agents and agents for service of process are listed in Exhibit G. As of the date of this Disclosure Document, Panera does business under the name Panera Bread, Saint Louis Bread Company and Saint Louis Bread Co.

Prior Experience

Panera is in the business of operating and franchising Panera Bread Bakery-Cafes, using certain of the “Marks” and “System,” both as defined in the Franchise Agreement attached as Exhibit B, specializing in the retail sale of high quality food in a warm, inviting and comfortable environment. Panera has a menu highlighted by flavorful, wholesome offerings, including select proteins raised without antibiotics, grass-fed beef, whole grain bread and select organic ingredients, with zero grams of artificial trans fat per serving. Our key menu groups are daily baked goods, including a variety of freshly baked bagels, breads, muffins, scones, rolls and sweet goods, made-to-order sandwiches on freshly baked breads, hearty, unique soups, pasta dishes and side items, freshly prepared and hand-tossed salads, and custom roasted coffees and cafe beverages, such as hot or cold espresso and cappuccino drinks and smoothies, as well as other menu items and merchandise related to the Panera Bread concept (“Panera Bread Bakery-Cafe(s)” or “Bakery-Cafe(s)”). Our menu includes a wide variety of year round favorites complemented by new items introduced seasonally with the goal of creating new standards in everyday food choices. With our identity rooted in handcrafted artisan bread, we bake fresh bread every day. Panera is committed to providing great tasting, quality food people can trust. In 2014, we formalized our Food Policy, an articulation of Panera’s long held values which expresses a commitment to clean ingredients and products by removing items identified on our “No No List”, transparency and a positive impact on the food system. In neighborhoods across the United States, customers are drawn to our warm and welcoming environment which features comfortable gathering areas, relaxing decor and free internet access. When we acquired our bakery cafe concept in 1993, which was then known as “Saint Louis Bread/Company,” we substantially improved the “Saint Louis Bread Company” Bakery-Cafe concept and, for strategic marketing reasons, chose a new name, “Panera Bread.” We also recognized that the “Saint Louis Bread Company” name had valuable name recognition in St. Louis, Missouri. Accordingly, all Bakery-Cafes throughout the U.S. currently operate under the “Panera Bread” name, except for those company-owned Bakery-Cafes located in the St. Louis, Missouri market area. For purposes of this Disclosure Document, we refer to all of these Bakery-Cafes as “Panera Bread Bakery-Cafes” even though some of them use the “Saint Louis Bread Company” name. We have been franchising and operating company-owned Panera Bread Bakery-Cafes since December 1993. Panera has not offered franchises in any other lines of business.

Business Offered

We offer to qualified persons the right to develop multiple Panera Bread Bakery-Cafes within a specific geographic area (the “Development Area”) under our standard form area development agreement (the “Area Development Agreement” or “ADA”). A copy of the Area Development Agreement is attached as Exhibit A. The Area Development Agreement requires you to open an agreed-upon number of Panera Bread Bakery-Cafes under a Development Schedule. You must sign our then-current form of franchise agreement (the “Franchise Agreement”) for each Panera Bread Bakery-Cafe you open. Each Franchise Agreement will grant you the right to own and operate a single Panera Bread Bakery-Cafe at an agreed-upon location and will require you to sell to us, at our option, your Panera Bread Bakery-Cafe at a defined purchase price in the event that you fail to meet our established operational standards or upon the occurrence of certain other events as described in the Purchase Option Addendum to the Franchise Agreement. A copy of our current form of Franchise Agreement is attached as Exhibit B. However, if you are executing a Franchise Agreement pursuant to an Area Development Agreement that you entered into before March 27, 2003, you are not required to execute the Purchase Option Addendum attached to the Franchise Agreement. A franchisee of Panera will specialize in the retail sale of daily baked goods, including a variety of freshly baked bagels, muffins, scones, rolls and sweet goods, made-to-order sandwiches and flatbreads on freshly baked breads, hearty, unique soups, pasta dishes, freshly prepared and hand-tossed salads, and custom roasted coffees and cafe beverages, such as hot or cold espresso and cappuccino drinks and smoothies, as well as other menu items and merchandise related to the Panera Bread concept as we may authorize from time to time. Panera Bread Bakery-Cafes will normally provide carry- out service and seating, emphasizing a more special dining experience than that offered by traditional fast food restaurants. Panera Bread Bakery-Cafes may also be authorized to provide offsite catering services within a designated geographic area (See Item 12 for details). Panera Bread Bakery-Cafes compete in several segments of the restaurant business: breakfast, “AM chill”, lunch, “PM chill”, dinner, and take home, through both on-premise sales and offsite Panera Catering and offsite small order delivery. You must offer for sale all products and services Panera designates, unless you obtain our prior written approval not to carry certain items or provide certain services. To support its Bakery-Cafes in servicing catering markets, Panera operates catering-only units, referred to as delivery hubs. Panera may offer franchisees the opportunity to develop and operate delivery hubs in its discretion. We may grant you a nonexclusive right to provide offsite catering and/or delivery services for certain food products we may authorize from time to time within a geographical area around your Bakery-Cafe that we may designate from time to time. For each Panera Bread Bakery-Cafe, you must construct a baking facility. This baking facility is necessary to complete the production of a baked product after delivery of partially prepared fresh and frozen ingredients. We have developed technology platforms which are designed to make a difference to our customers by providing a greater degree of access and convenience for our guests. Specifically, we are concentrating efforts and resources on our strategic initiatives intended to enhance the experience for both our dine-in and to-go guests. Examples of this initiative include Panera 2.0, consisting of digital retail ordering and Rapid-Pickup, catering ordering, small order delivery, ordering kiosks, and technology tools to assist managers within the Bakery-Cafe. Franchisees interested in using these technology platforms are required to enter into our Franchisee Software and Services Master Supply Agreement ("Software and Services Agreement"), which is attached as Exhibit E. Under the Software and Services Agreement, Panera supplies Panera owned or licensed software and other technologies and any required or requested related services. The specific software and services to be provided and the fees to be paid will be set forth in an attached Scope of Work (“SOW”) on a project by project basis. Fees for Panera 2.0 are generally structured as initial start-up fees, license fees, periodic subscription fees, percentage of sales fees or a combination of each depending upon the nature of the services and materials provided. The products and services offered by a Panera Bread Bakery-Cafe are intended primarily for personal consumption by the general public. Panera has designed its concept to create an ambiance in our Bakery-Cafes that is warm, inviting, and embracing. For example, Bakery-Cafes are designed to provide distinctive environments, in many cases using fixtures and materials complementary to the neighborhood location of the Bakery-Cafe as a way to engage customers. The distinctive design and environment of our Bakery-Cafes are intended to offer an oasis from the rush of daily life, where our associates are trained to greet our customers by name and have the skills, expertise, and personalities to make each visit a delight. Many of our Bakery-Cafes incorporate the warmth of a fireplace and cozy seating areas or outdoor cafe seating, which facilitate the use of our Bakery-Cafes as a gathering spot. Our Bakery-Cafes are designed to visually reinforce the distinctive difference between our Bakery-Cafes and other bakery-cafes and restaurants. You will have to compete with other businesses offering similar products, including specialty food, casual dining, and quick service cafes, bakeries and restaurant retailers, including national, regional and locally-owned restaurants and grocery stores offering products similar to those offered by Panera Bread Bakery-Cafes, as well as wholesale bakeries and distributors. Additionally, if you are authorized to offer small order delivery, you will compete with business in the highly competitive pizza delivery marketplace and with businesses who offer ordering and meal delivery services from unaffiliated restaurants. The restaurant industry is a highly competitive and developed market, which can be affected significantly by many factors, including changes in local, regional or national economic conditions, changes in consumer tastes and spending patterns, consumer concerns about the nutritional quality of quick-service food, negative publicity about the ingredients we use or the occurrence of food-borne illnesses, dietary trends, and increases in the number of, and particular locations of, competing restaurants. Various factors can adversely affect the restaurant industry, including weather conditions; inflation; availability of and resulting increases in food and ingredient costs; labor and energy costs; the availability and cost of suitable sites; fluctuating interest and insurance rates; state and local regulations and licensing requirements; the availability of ingredients, particularly select proteins raised without antibiotics, food items and an adequate number of hourly-paid and salaried employees; and other factors that may affect restaurants or retailers in general. You should consider that certain aspects of any bakery-cafe business are regulated by federal, state and local laws, rules and ordinances in addition to the laws, regulations and ordinances applicable to businesses generally, such as the Americans with Disabilities Act, Federal Wage and Hour Laws and state law equivalents, the Occupational Safety and Health Act, the Affordable Care Act, the National Labor Relations Act, data protection (such as credit card data protection under FACTA) and privacy laws. The Environmental Protection Agency, the U.S. Food and Drug Administration, the U.S. Department of Agriculture, as well as state and local environmental and health departments and other agencies have laws and regulations concerning the preparation and labeling of food and sanitary conditions of bakerycafe facilities. State and local agencies routinely conduct inspections for compliance with these requirements. Under the Clean Air Act and state implementing laws, certain state and local areas are required to attain, by the applicable statutory guidelines, the national quality standards for ozone, carbon monoxide and particulate matters. Certain provisions of such laws impose limits on emissions resulting from commercial food preparation. From time to time, we may sell and franchise one or more of our company-owned Panera Bread Bakery-Cafes. In these transactions, we negotiate with the prospective franchisee to reach mutually acceptable terms of a sale agreement and any lease or sublease of the real estate. If you purchase a company-owned Panera Bread Bakery-Cafe, you must sign a Franchise Agreement and, possibly, also an Area Development Agreement for the further development of Panera Bread Bakery-Cafes in the geographic area where the purchased Panera Bread Bakery-Cafe(s) is located. Depending on the circumstances, the financial and other terms may vary from the standard terms of our Franchise Agreement and Area Development Agreement. We also may offer franchises or other arrangements for Panera Bread Bakery-Cafes to be located at non- traditional locations, such as transportation facilities (such as airport facilities, inter-MSA train and/or bus stations, turnpikes or other limited access highway rest stops); hospitals; colleges and universities; sports arenas and entertainment facilities; and retail outlets, grocery stores and supermarkets. Additionally, we operate alternative location formats, such as delivery and carryout and delivery only locations, and locations which utilize alternative baking systems and are not required to receive deliveries of fresh dough daily and may offer franchises or other arrangements for such locations in the future. The terms and conditions of a franchise or other arrangements for a non-traditional location or alternative format may vary considerably from the standard terms of our Franchise Agreement and Area Development Agreement. We, or an affiliate, may offer franchises or enter into other types of relationships for Panera Bread Bakery-Cafes in foreign countries. This Disclosure Document does not describe the terms of any such international agreements or relationships, but we may deliver this Disclosure Document in connection with such transactions for general informational purposes.

Initial Fees

Area Development Agreement. Under the Area Development Agreement you must pay a development fee of five thousand dollars ($5,000) (the “Development Fee”) for each Panera Bread Bakery-Cafe that may be opened under the Area Development Agreement. The number of Panera Bread Bakery-Cafes that you may develop under a particular Area Development Agreement is determined by mutual agreement. The number of Panera Bread Bakery-Cafes will vary depending upon a variety of factors, including: (1) existing population and anticipated population growth within the Development Area; (2) competition within the Development Area; (3) the availability of acceptable locations; and (4) the number of Panera Bread Bakery-Cafes we estimate can be developed within the Development Area. The initial franchise fee payable for each Panera Bread Bakery-Cafe you are required to develop under an Area Development Agreement is thirty five thousand dollars ($35,000). We will apply five thousand dollars ($5,000) of the Development Fee paid under the Area Development Agreement against the initial franchise fee payable under each Franchise Agreement entered into under the terms of the Area Development Agreement. No portion of the Development Fee is refundable if you fail to develop the cumulative number of Panera Bread Bakery-Cafes that may be developed in accordance with the terms of the Area Development Agreement. Franchise Agreement. The initial franchise fee is thirty five thousand dollars ($35,000), which is due and payable, less five thousand dollars ($5,000) of the Development Fee paid pursuant to the Area Development Agreement as described above, at least thirty (30) days prior to the scheduled opening of a Panera Bread Bakery-Cafe. After a Franchise Agreement has been signed, the initial franchise fee is not refundable in whole or in part. Except as noted above with respect to the application of a portion of the Development Fee due and payable under an Area Development Agreement, and possibly in connection with the conversion of a Paradise Bakery & Café to a Panera Bread Bakery-Cafe and with the sale of company-owned Panera Bread Bakery-Cafes and/or non-traditional locations (See Item 1), the thirty five thousand dollars ($35,000) franchise fee is uniform to all franchisees currently purchasing a franchise. A franchise fee equal to fifty percent (50%) of the Panera’s then-current franchise fee is payable in connection with the renewal of a Franchise Agreement. A transfer fee of seven thousand five hundred dollars ($7,500), plus costs, is payable in connection with the transfer of a Franchise Agreement. Before opening a Panera Bread Bakery-Cafe, you must purchase your initial inventory of certain frozen dough and fresh dough products from Panera, which you will purchase on a daily basis, at a cost of approximately three hundred dollars ($300) to five hundred dollars ($500), which amount is nonrefundable. Development Services Agreement Panera may enter into Development Services Agreements (attached as Exhibit D-1) with franchisees, which provide that Panera may from time to time, at its discretion and on a nonexclusive basis, offer to sell to existing franchisees Panera Bread Bakery-Cafe locations to be developed by us. The purchase price for such proposed locations are the total development costs incurred by Panera, plus an additional Development Fee (currently one hundred and ten thousand dollars ($110,000) under existing contracts, however this fee may be modified based on location, services rendered, changes in actual costs and other factors determined from time to time by Panera). These costs are in addition to any franchise fees payable in connection with franchisee’s acquisition of the location. The Development Services Agreement does not provide any exclusive rights or territory under the agreement and Panera is not required to make any offers under the agreement. Likewise, the franchisee is not required to accept any offers made by us. We may terminate the Development Services Agreement immediately upon notice for any reason or no reason. We will issue a Bill of Sale in connection with any items transferred to franchisees in connection with the Development Services Agreement, which will provide the extent to which such items shall be covered by any warranties. In most instances we would expect that such items will remain subject to any applicable manufacturer's warranties but shall otherwise be transferred by us without any additional express or implied warranties. Real Estate Selection and Construction Management Services Agreement Panera may enter into Real Estate Selection and Construction Management Services Agreements (attached as Exhibit D-2) with franchisees, which provide that Panera may from time to time, at its discretion and on a nonexclusive basis, offer to provide real estate assistance services to franchisees (such as real estate selection and construction management services). The fees for these services are currently one hundred and ten thousand dollars ($110,000), however this fee may be modified based on location, services rendered, changes in actual costs and other factors determined from time to time by Panera. These costs are in addition to any franchise fees payable in connection with franchisee’s acquisition of the location. The Real Estate Selection and Construction Management Services Agreement does not provide any exclusive rights or territory under the agreement and Panera is not required to make any offers under the agreement. Likewise, the franchisee is not required to accept any offers made by us. We may terminate the Real Estate Selection and Construction Management Services Agreement immediately upon notice for any reason or no reason. Unlike the Development Services Agreement described above, Panera will provide consulting or advisory services only, rather than developing the Bakery-Cafe and transferring possession of the BakeryCafe assets to the franchisee. Franchisee Software and Services Master Supply Agreement As noted in Item 1, Franchisees may enter into a Software and Services Agreement for certain Panera owned or licensed software and other technologies to support the operation of Panera Bread Bakery-Cafes. The specific software or services to be supplied and the fees payable will be set forth in an applicable Statement of Work on a project by project basis. Fees for Panera 2.0 are generally structured as initial start-up fees, periodic subscription fees, percentage of sales fees or a combination of each depending upon the nature of the services of materials provided. Currently, you may purchase, from Panera, optional technology products and services at a cost of up to forty thousand dollars ($40,000) (See Item 6, Note 9 and Item 7, Note 4).

Financing

We do not offer direct or indirect financing to franchisees. We do not guarantee your notes, leases or other obligations.

Franchisee Revenue and Profit

STATEMENT OF AVERAGE NET SALES OF PANERA BREAD BAKERY-CAFES FOR THE 52-WEEK FISCAL YEAR ENDING DECEMBER 25, 2018. AVERAGE NET SALES Company-owned Bakery-Cafes $2,908,264 Franchisee-owned Bakery-Cafes $2,599,432 Company-owned and Franchisee-owned Bakery-Cafes $2,739,908 THESE RESULTS ARE AVERAGES OF SPECIFIC PANERA BREAD BAKERY-CAFES AND SHOULD NOT BE CONSIDERED AS THE ACTUAL OR PROBABLE RESULTS THAT WILL BE REALIZED BY YOU. WE DO NOT REPRESENT THAT YOU CAN EXPECT TO ATTAIN THESE FINANCIAL RESULTS. YOUR OWN FINANCIAL RESULTS ARE LIKELY TO DIFFER FROM THESE RESULTS. IF YOU ARE PURCHASING THE ASSETS OF EXISTING COMPANY-OWNED BAKERY-CAFES, YOU SHOULD NOT RELY ON THE STATEMENT OF AVERAGE NET SALES, BUT SHOULD INSTEAD REVIEW THE ACTUAL FINANCIAL RESULTS OF THE BAKERY-CAFE(S) BEING PURCHASED. SIMILARLY, PROSPECTIVE FRANCHISEES OF NON-TRADITIONAL LOCATIONS SHOULD NOT RELY ON THE FOREGOING STATEMENT OF AVERAGE NET SALES, SINCE IT IS NOT RELEVANT TO THOSE TYPES OF LOCATIONS. WE MAKE NO CLAIM REGARDING THE ACTUAL OR POTENTIAL SALES OR PROFITS OF NON-TRADITIONAL LOCATIONS. Information Regarding Statement of Average Net Sales. The Statement of Average Net Sales consists of the mean averages of the reported annual Net Sales of 9171 company-owned Bakery-Cafes and 1,099 Franchisee-owned Bakery-Cafes open during the entire fiscal year ending December 25, 2018, excluding any acquisitions or dispositions that occurred during the year. The information provided does not include the results of any Panera Bread/St. Louis Bread Cares Bakery-Cafes operated by Panera Bread Foundation, Inc. Substantiation of the information used in preparing the Statement of Average Net Sales will be made available to you upon reasonable request. However, we will not disclose the identity or sales data of any particular Panera Bread Bakery-Cafe without the consent of that owner, except to any applicable state registration authorities or except in connection with the sale of a particular existing Panera Bread Bakery-Cafe that we own. Of the 2,016 Panera Bread Bakery-Cafes used for calculating the Average Net Sales for the fiscal year ending December 25, 2018, (i) the 917 company-owned Panera Bread Bakery-Cafes had Net Sales ranging between $961,385 and $6,418,634, of which 435 (47.4%) attained or surpassed $2,908,264 in Net Sales (the average Net Sales of company- owned Panera Bread Bakery-Cafes), and (ii) the 1,099 Franchisee-owned Panera Bread Bakery-Cafes had Net Sales ranging between $1,060,142 and $5,113,281 of which 509 (46.3%) attained or surpassed $2,599,432 in Net Sales (the average Net Sales of Franchisee-owned Panera Bread Bakery-Cafes). The Net Sales of Franchisee-owned Bakery-Cafes were derived from unaudited financial reports submitted by Franchisees for the purpose of computing royalties. Panera compiled the Net Sales of company-owned Bakery-Cafes on the basis of generally accepted accounting principles. Information Regarding Statement of Average Net Profit and EBITDA of Company-Owned Bakery-Cafes. The Statement of Average Net Profit and EBITDA of company-owned Bakery-Cafes consists of the mean averages of 917 company-owned Bakery-Cafes open during the entire fiscal year ending December 25, 2018. The information provided does not include the results of any Panera Bread/St. Louis Bread Cares Bakery-Cafes operated by Panera Bread Foundation, Inc. Substantiation of the information used in preparing the Statement of Net Profit and EBITDA will be made available to you upon reasonable request. However, we will not disclose the identity, revenue or other items of income or expense of any particular company-owned Panera Bread Bakery-Cafe, except to any applicable state registration authorities or except in connection with the sale of a particular existing Panera Bread Bakery-Cafe that we own. The Statement of Average Net Profit and EBITDA for company-owned Bakery-Cafes was prepared in accordance with generally accepted accounting principles. The footnotes are an integral part of the Statement of Average Net Profit and EBITDA and should be read in conjunction therewith. The Statement of Average Net Profit and EBITDA does not include, among other things, amortization of initial franchise fees or royalties, which a franchisee would have to pay to us, or bank financing charges, which can vary greatly. Sales volumes of Panera Bread Bakery-Cafes vary considerably due to a variety of factors, such as: local popularity of Panera Bread Bakery-Cafes; hours of operation; size of the Bakery-Cafe; competition from other restaurants, especially fast food businesses in proximity to the Bakery-Cafe; weather conditions; traffic flow, accessibility and visibility of the Bakery-Cafe; the economic conditions in the locality of the Bakery-Cafe; and the business abilities and efforts of franchisees. In addition, sales volumes of individual Panera Bread Bakery-Cafes could be adversely impacted by certain conditions affecting the franchisor or the System as a whole, such as our inability to execute our growth strategy, including, among other things, variations in the number, timing, and successful nature of company-owned and franchiseeowned Bakery-Cafe openings; continued successful operation of Bakery-Cafes; failure or inability to protect our brand, trademarks, or other proprietary rights and health concerns about the consumption of certain products. Operating costs and expenses for a Panera Bread Bakery-Cafe may vary considerably and be different than those disclosed in the foregoing statement, as a result of higher food and distribution costs, labor shortages, and competitive real estate markets, among other factors. Additionally, distribution costs in those areas of the country not currently serviced by our fresh dough facilities, approved suppliers or distributors may be higher. Except for the above Statements, and except as otherwise expressly stated in this Item 19, no representations or statements of actual, average, projected or forecasted sales, expenses, profits or earnings of Panera Bread Bakery-Cafes are made to prospective franchisees. None of our officers or employees is authorized to make any claims or statements as to the earnings, expenses, sales or profits or prospects or chances of success that you can expect or that have been experienced by us or by present or past Panera Bread Bakery-Cafes. We have specifically instructed our officers and employees that they are not permitted to make claims or statements as to the earnings, expenses, sales or profits or the prospects or chances of success, nor are they authorized to represent or estimate dollar figures as to any particular Panera Bread Bakery-Cafe or any particular site for a Panera Bread Bakery-Cafe.