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Bagel Bonanza


More and more franchisors are branching out into one of today's hottest concepts-bagels. In September, Texaco signed a deal to have Manhattan Bagel Co.'s franchisees supply refrigerated cases full of fresh bagels and cream cheese to Texaco's gas station convenience stores.

"Bagels have always been sold in convenience stores," explains Ronald Hari of Manhattan Bagel. "But the convenience stores' biggest complaint was not getting fresh bagels. Through our franchisees, they can now get fresh bagels delivered on demand."

Three New Jersey Texaco locations offer Manhattan bagels, and Hari says that number should grow to about 40 more locations on the East Coast by May. And the refrigerated cases are only the beginning: Future plans include building entire bagel-baking operations within the convenience stores.

Last spring, powerhouse Boston Chicken Inc. began exploring the bagel market by investing $20 million in Progressive Bagel Concepts Inc. Formed by a merger of three successful bagel chains, Progressive is opening Einste!n Bros. Bagels stores around the country.

"Boston Chicken's Boston Market stores do very well at lunch and dinner," says spokesperson Kelly Jorgenson, "but we're interested to know what could happen during breakfast. And right now, it makes more sense to invest in a [bagel] company than to [expand into the breakfast market] with our stores."

Meanwhile, Dunkin' Donuts, one of the first to jump on the bagel bandwagon, is still going strong. Bagels have been a core part of Dunkin' Donuts' menu for more than five years and are offered in more than 80 percent of its stores.

Contact Sources

Manhattan Bagel Co. Inc., 246 Industrial Way, Eatontown, NJ 07724, (908) 544-0155.

This story appears in the February 1996 issue of Entrepreneur. Subscribe »