Bread Company Recipe for Success: ‘Be Loose, Have Fun,’ Make Dough

After a night in a teepee and a bicycle ride to their office in this Montana cattle town, Pete and Laura Wakeman are ready for another day of work running their national franchising business.

In the past 20 years, the Wakemans, founders of the Great Harvest Bread Co., have turned the traditional idea of franchising on its head while building a debt-free company growing by better than 10% a year.

Their network of 119 U.S. bakeries grossing $60 million a year is an enterprise where franchise owners are encouraged to be individuals and one of the few rules is that everybody gets a free slice of bread.

The Wakemans have achieved this from the unlikely base of Dillon, population 4,250.

“Be loose and have fun,” reads the first line of the Great Harvest mission statement. The Wakemans seem to do it.

They take summers off to travel--they recently left for Bolivia--and they keep a lid on the workweek for themselves and their 28 employees in Dillon. While franchise owners may choose workaholic hours, the well-compensated headquarters staff is instructed not to work more than 40 hours a week and receives five weeks of vacation after five years.

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It is a quality-of-life approach, and owners of the Great Harvest bakeries in 34 states are encouraged to adopt it.

“The way we run it is the way we are,” Laura said. “If we had to do it a different way, we’d do something else.” Leading a balanced life leads to a better company, she and her husband believe.

Last year, Great Harvest bakeries sold nearly $60 million worth of bread, dense loaves of whole wheat and other varieties usually hand-kneaded in view of the customers. The company is debt-free and signs about one new franchise each month. Gross revenue at bakeries open for all of 1996 ranged from $91,000 to $1.3 million.

The Wakemans oversee this business from an old JCPenney store in downtown Dillon. In the evening they bicycle or drive nine miles out of town, to the simple farmhouse they share with two teen-age daughters. The Wakemans frequently sleep in the large teepee that is in the yard, decorated inside with the antlers of an elk shot by Laura.

Work stays at the office.

“If you take a lot of time off, it helps you love it more,” Laura said. But people are expected to work hard when they’re on the job.

“I tell them, ‘You’ve got 40 hours. Make it count, and then go home,’ ” she said.

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Although the Wakemans hope their philosophy guides the Great Harvest bakeries scattered around the country, they impose few mandates, unlike conventional franchisers.

“Bake phenomenal bread, run fast to help customers, create strong, exciting bakeries, and give generously to others,” reads the rest of the mission statement.

A trademark of each bakery is the bread board, where everyone can get free slices of bread, regardless of whether they buy. The giveaway is one of the few franchise requirements that continue after the first year in business, what Great Harvest calls a year of apprenticeship.

During that time, bakeries may produce daily no more than six types of bread and one type of cookie. The bread must be round, and there can be no mass slicing. (Slicing machines work best with cold bread. Great Harvest wants its product sold soon after it comes from the oven, and believes the bread stays fresh longer if sliced by the serving.)

“It’s our chance to get the bakery the way we think it will run best,” Pete said. After the first year, the reins are loosened; the bakery in Houston got its slicer.

The company draws new entrepreneurs looking for independence, sometimes corporate refugees such as Bill McKechnie, a former New York securities analyst who opened a bakery in Alexandria, Va., four years ago.

McKechnie, 39, said his degrees in business and economics from the University of Chicago and the London School of Economics aren’t being wasted; it takes a business-minded person to run a bakery producing 3,500 loaves a week.

“It’s a lot of hours and it’s hard work, physical work,” said McKechnie, who puts in 60 to 70 hours a week. “People interested in setting up something in a cookie-cutter fashion and letting the business run itself will find it’s not for them.”

The Wakemans decide it’s not for lots of people. Of 375 qualified applications received last year, only 14 were accepted. Most franchisers grant 50% of their applications, said Robert Justis, a Louisiana State University authority on franchising.

“These guys really do a screening job,” Justis said. “If they don’t think they’re going to enjoy working with you, you don’t get in.”

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Although the Great Harvest franchise agreement is remarkably free of strings, the Wakemans maintain control by demanding the bakeries put out a quality product, Justis said.

But the company does not insist on uniformity from one franchise to another.

The company likes its bakeries to be neighborhood gathering places that are part of the customers’ regular circuit. Unlike a burger chain, Great Harvest doesn’t rely much on a traveling public that expects features to be the same in Sacramento as in Scranton.

Follow-up support for established bakeries is part of the company’s success, said Calvin Haskell of Franchise Solutions, a Portsmouth, N.H., consulting firm for franchisers.

“Oftentimes, franchisees say, ‘They paid a lot of attention to me when I came on board, and then it kind of waned,’ ” Haskell said.

Great Harvest got its start when the Wakemans, now in their mid-40s, sold their homemade bread from a roadside card table in Connecticut in 1972.

After graduating from Cornell University in New York, he in agriculture and she in nutrition, they trekked from Yellowstone to Glacier national parks, falling in love with Montana in the process.

In 1976, they bought an old bakery in Great Falls for a $200 investment, selling it after business rocketed. They began franchising in 1978 from Dillon, chosen for its relaxed way of life and pretty setting, along the Beaverhead River between the Pioneer and the Ruby mountain ranges. To the north is Montana’s Golden Triangle, the wheat region that provides the grain that is ground into flour daily at each bakery.

Job announcements at the Dillon office usually draw more than 400 applicants and recruitment is confined to Montana. Reaching farther is too risky.

“People don’t have a clue,” Laura said. “They come to Dillon. There are no malls.”

When David McKinnon of the Michigan-based Molly Maid franchise visited this spring, he flew to Bozeman and then drove for a couple of hours to reach Dillon.

He and the Wakemans are among half a dozen or so franchise chiefs who meet now and then to share ideas. When it was the Wakemans’ turn to be hosts, drinks and hors d’oeuvres were at the teepee.

“Sometimes I wonder if we should be looser,” McKinnon said of his company. “It’s one of the reasons I enjoy getting together with the Wakemans.”

The Wakemans want their company to grow at the rate of about 20% a year. Even with competition surging, they are optimistic that’s an achievable goal.

“It’s hard to imagine a day when people will be tired of bread,” Pete said as he nibbled on a slice.