PHILADELPHIA — After scoring global success with a soft pretzel first made at an Amish-country farm stand, Auntie Anne's Inc. has a new vision rising from its secret-formula dough: cafes with pizza, sandwiches, Starbucks coffee and Internet access.
And, yes, those pretzels.
Auntie Anne's is already one of the nation's fastest-growing franchise operations, with nearly 800 soft pretzel stands in 43 states and more than a dozen countries.
Now the company has opened an Auntie Anne's Cafe in Lancaster, Pa. It is intended as more of a community gathering place, unlike the counters in malls, airports and train stations where its pretzels are bought to eat on the fly.
Cafe customers will find seating for 30, Starbucks coffee, wired and wireless Internet access and other foods in addition to the squarish soft pretzels Anne Beiler originated.
"With a good coffee program in the morning, a good lunch and light dinner menu, and with pretzels and frozen custard as a snack opportunity in the evening, we are trying to create an opportunity for every part of the day," the company's president, Sam Beiler, said. "We will have soup and sandwich combinations, breads with toppings, pizzas, all made with the same pretzel dough, prepared in different ways to create different products." Auntie Anne's grew from a pretzel stand opened in 1988 by Anne Beiler, who was raised in an Amish Mennonite family in Lancaster County, started baking pies and cakes to sell at farmers' markets at age 12. She also worked as a waitress at a truck stop near the town of Gap, where the company is now based, from age 14 to 19.
The secret dough is a formula developed when her husband Jonas Beiler tweaked the recipe with grocery store ingredients that the company still doesn't reveal. Anne Beiler's pretzels sold so well at the Downingtown farmers' market she soon opened another outlet in Harrisburg.
Auntie Anne's was a company with a mission, supporting a family counseling service, now the Family Resource and Counseling Center, that the two started in their home while striving to recover from the death of their 18-month-old daughter, Angela.
The company still earmarks 10 percent of the royalties from franchise holders for causes including the center, the Angela Foundation, which supports groups that care for children and families, and the Children's Miracle Network, which raises funds for children's hospitals.
The Auntie Anne's Hand-Rolled Soft Pretzels stores spread fast, with 50 opening in nine states by December 1990, and 100 by June 1992. Anne Beiler went from packaging pretzel mix in the garage to heading a company with 150 employees that supports more than 10,000 franchise owners and workers.
"Anne happened to be in the right place at the right time," said H.G. Parsa, an associate professor of hospitality management at Ohio State University who has studied franchising.
Growing health consciousness in the late 1970s and the 1980s gave Auntie Anne's a boost, said Parsa, editor of the Journal of Foodservice Business Research.
"Pretzels are perceived as a healthier alternative to doughnuts and cinnamon rolls," Parsa said. "They are not fried, and they are less messy to eat."
"A pretzel is such a light product, a small unit, they can go to thousands just like Starbucks did," he said.
In 1992, when the 100th Auntie Anne's store opened at Granite Run Mall in Media, Beiler won Inc. magazine's Entrepreneur of the Year award.
The first international store opened in 1995 in Jakarta, Indonesia. Last June, an Auntie Anne's at Fashion Island Mall in Bangkok became the 100th international store — and the 28th in Thailand.
"It's a bread product, which is fairly universal in terms of appeal," said Sam Beiler, a second cousin who is now president.
Auntie Anne's ranked 70th on Entrepreneur magazine's 2003 Top 500 list of franchise companies, based on financial strength, stability, growth rate and size. It beat out all the other pretzel franchises listed. Next-highest on the list were Wetzel's Pretzels of Pasadena, Calif., ranked 185th, and Pretzel Time of Salt Lake City, ranked 213th.
It was 57th on Entrepreneur's fastest-growing franchises list. "We continue to open somewhere near 40 pretzel stores per year," Beiler said, adding that systemwide sales last year reached $232 million. The closely held company has no plans to go public or be bought out, he said.
In an earlier move to branch out, the company opened a line of frozen custard franchises, Auntie Anne's Cre-Mo Classic Cones, in 2001, and now has 15 of those stores in eight states.
Whether the cafes will expand remains to be seen. Beiler said that will depend on results from the first cafe in Lancaster's Kendig Square shopping plaza and another to open in March.
"We'll come in low and slow on this," Beiler said. "We'll open the second one, and see if the results are consistent, and after that we can deploy a growth plan."