THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, August 13, 1994 TAG: 9408130247
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 92 lines
Bigwigs from Bagelworks were among the first to visit the father-and-daughter team that runs the upstart Chesapeake Bagel Bakery.
``They came in, gave us their card and said `good luck,' '' said John Turner, owner and manager of the new Virginia Beach store. ``That was very nice.''
Polite words from two businesses poised to butt heads.
The Chesapeake Bagel Bakery is a 44-store chain based in McLean, fixed on becoming bagel king of the Southeast and mid-Atlantic.
In the next 30 months, the chain plans to open 10 franchises in Hampton Roads, which would make it the biggest bagel peddler in this region. Bagelworks, which already has three stores in the area, says it hopes to open a new one every 18 months.
Another bagel chain, Bruegger's Bagels of Vermont, says it, too, is eyeing Virginia and hopes to build 25 to 30 stores between Richmond and Virginia Beach. With 105 stores, Bruegger's already is a giant in the bagel-restaurant industry.
A bagel war?
``Absolutely,'' says Dan Rowe, franchise development director for Chesapeake Bagel Bakery. ``I think it's up to whoever gets the best sites. The scramble is on to get the best locations.''
The buildup in the bagel-chain industry is largely due to the public's perception that bagels are healthy and convenient.
How much Americans spend on bagels is difficult to discern. But a U.S. Department of Commerce study estimates that per capita consumption increased from 2.47 pounds in 1988 to 3.56 pounds last year.
The Chesapeake Bagel Bakery isn't going to sit idly by while the big bagel boys roll in. It plans to add two more stores in Virginia Beach, two each in Norfolk and Williamsburg, and one each in Hampton and Chesapeake. The company also will open one or two franchises in Newport News.
Michael Robinson, the chain's founder, and partner Alan Manstof have been able to expand so fast by franchising their new stores. Less than a dozen of their 44 stores are company-owned.
The company chooses the sites, and the franchise owner pays a $22,500 fee and $250,000 in start-up costs for a fully-equipped store. Four percent of sales are paid in royalty fees.
There are about a dozen types of bagels, including the standard plain, onion, garlic, sesame and poppy seed brands. But there also are sun-dried tomato bagels and about 10 varieties of cream cheese.
``We have a lot more control,'' said John Turner, who opened his Virginia Beach franchise this month. ``We can offer a different type of bagel if we want. But first, we have to send it to McLean. They don't want us to sell something that tastes bad.''
In his first week of business, Turner said he and his daughter sold 50 percent more than expected.
That doesn't faze his neighbors, Virginia Beach-based Bagelworks.
``We knew the competition was coming, but we haven't decided how it's going to affect us,'' said Mike Winter, a manager for Bagelworks. The company has two stores in Virginia Beach and one in Norfolk.
Winter isn't sure whether the Chesapeake Bagel Bakery - or any bagel chain - can cut into Bagelworks' business because each offers different products.
Bagelworks has a steam-softened bagel known as the ``Southern'' bagel, while the Chesapeake Bagel Bakery offers a boiled New York-style bagel that's crunchy on the outside, soft and chewy on the inside.
The big question is: Do Southerners really want a taste of New York?
In 1978, when Bagelworks opened its first store in Virginia Beach, it offered the New York bagel. It flopped.
``Customers always thought they were stale or burnt,'' said Kelly O'Gurkis, manager for the Bagelworks on 21st Street in Norfolk.
When the company switched to the softer, steamed bagel - business boomed.
While Bagelworks and other local stores steaming their bagels hope customers will stick with the Southern style, the New York bread already has met with some success in Hampton Roads and the Deep South.
``Many of my customers are from the North, and many are from the South,'' says Maria Greenside, owner of the Bagel Place in Virginia Beach. ``They all want my New York bagel.'' ILLUSTRATION: BAGEL BATTLES - IN HAMPTON ROADS?
BILL TIERNAN/Staff
John Turner, who with daughter Susannah opened a Chesapeake Bagel
bakery in Virginia Beach this month. The chain stands to become the
largest bagel baker in Hampton Roads, if it meets its goal of 10
franchises here.
GRAPHIC
JOHN CASERTA/Staff
U.S. EATING MORE BAGELS
[For a copy of the graphic, see microfilm for this date.]
SOURCE: U.S. DEPARTMENT OF COMMERCE
by CNB