Karcher Family Venturing Into the Bagel Business : Fast food: Betting on a trend, three relatives of Carl's Jr. founder sign deal to open 20 Chesapeake Bagel Bakery stores.

By CHRIS WOODYARD

March 3, 1995 12 AM PT

TIMES STAFF WRITER

CORONA —

Orange County’s Karcher family, best-known for its chain of Carl’s Jr. hamburger restaurants, is venturing into another area of the food industry: bagels.

Bernard Karcher, wife Joan Karcher and son Mike have signed an agreement to open 20 Chesapeake Bagel Bakery stores in Orange and Riverside counties.

Bernard Karcher, a Carl’s Jr. franchisee and brother of chain founder Carl N. Karcher, said he hopes to open his first bagel store in Temecula by June and follow it soon after with one in Anaheim Hills.

Bagels “seem like the wave of tomorrow for the fast-food business,” said Karcher, a bagel connoisseur himself. “I have watched the small shops, and they are very busy.”

Chesapeake Bagel, a chain based in McLean, Va., applauded the Karcher family’s entry into the industry. The company has 52 stores already and plans to have a total of 180 by year’s end, including the Karchers’.

The bagel business until recently was “dominated by the moms and pops,” said Dan Rowe, director of franchise development for the chain. “The moment you see large, multiunit food service operators involved as franchisees, it’s an indication that the business has national potential.”

U.S. bagel sales at shops and supermarkets have been rising by 15% to 20% annually in recent years, from $1.7 billion for 1993 to more than $2 billion for 1994, said Doug Krumrei, senior editor of Bakery Production and Marketing, a Chicago-based trade publication. Sales of frozen bagels in supermarkets climbed from $244 million to $278 million.

The bagel “is the hot thing right now,” Krumrei said. “The fat content is nil, it’s a healthy food, it’s portable, and it fits into our lifestyles pretty easy. You can pop it in the toaster for breakfast or make it into a sandwich for lunch.”

Historians say that bagels date to the late 1600s, when they were invented by a Jewish baker in Vienna. The name is derived from the shape: bugel is German for stirrup.

They arrived in America in the early 20th Century, and the recipe was the closely held secret of a bagel bakers union in New York. The chewy bread rounds did not gain wide distribution in the United States, however, until the 1960s, when a bagel-making machine was invented that nearly quadrupled the number that a worker could produce.

More recently, the bagel has grown in popularity because it is low in fat. That benefit may be wiped out if the consumer slathers it with high-fat cream cheese or tops it with salty lox, the traditional accompaniments. Nevertheless, the bagel market is booming.

Newcomers to the industry must face the fact that people can be fiercely loyal to their neighborhood bagel shops.

“Everyone thinks they are an authority on pizza, an authority on Chinese food and an authority on bagels,” said Michael Brau, president of the 14-store Baltimore Bagel chain. The company, based in San Diego, has three locations in Orange County.

Still, the business is attractive to independent operators because bagel making is a fairly simple craft and requires little capital to get started.

Orange County has several independent operators and small chains such as Baltimore Bagels and Shirley’s Bagels Etc. in Newport Beach. Owners say there is room for competition, though, and they seem convinced that bagel eating is more than a mere fad.

Karcher said of his competitors, “There are going to be a lot of them. But I think the strong ones will survive.”

He plans to operate the stores through an enterprise named for his wife: Joan’s Bakery Inc. It will be a division of his operations in Corona, where he manages 11 Carl’s Jr. restaurants.

Though he is authorized by Chesapeake Bagel to open 20 stores now, Karcher said, he will proceed with care, building locations over the next 10 to 12 years.

“We’re not going to go so fast that we stumble,” Karcher said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Bagel Lore

Several theories on the bagel’s origin exist. Some attribute it to a Viennese Jewish baker who in 1683 made the first one to honor Polish King John III Sobieski, who had saved the city from invading Turks. The baker shaped a piece of dough into a riding stirrup, reflecting the king’s equestrian prowess. The term bagel evolved from bugel, German for stirrup. However, some linguists dismiss this as folklore, citing references to “beygls” dating to 1610.

BOILED VS. STEAMED

* The original: Dough is shaped by hand or machine and allowed to rise. Bagels are then plunged into boiling water, precooking the outer crust and assuring a soft, chewy inside. Upon floating, they are removed from the water and baked. Traditional flavors include plain, egg, onion and poppy seed.

* California style: Dough is shaped and allowed to rise but instead of being boiled is steamed while baking. This type lacks the traditional outer crust; purists describe them as “cottony.” Others say they are more versatile since they can be made into sandwiches and little pizzas. Flavors range from blueberry swirl to pesto Parmesan.

BEST SELLERS

A 1993 nationwide survey conducted by Baking Buyer Magazine shows consumers’ top four preferences:

1. Plain

2. Cinnamon raisin

3. Blueberry

4. Onion

Source: Wall Street Journal, Times reports, Baking Buyer Magazine; Researched by JANICE L. JONES / Los Angeles Times

Chesapeake Bagel Bakery at a Glance

* Founded: 1981

* Headquarters: McLean, Va.

* Founding partners: Alan Manstof and Michael Robinson

* First location: Washington