MANHATTAN BAGEL, D&W GIVE RISE TO SUBSIDIARY

ROSEANNE HARPER

GRAND RAPIDS, Mich. -- D&W Food Centers here has entered into an agreement with Manhattan Bagel Corp., Eatontown, N.J., that gives it exclusive franchise rights to develop Manhattan Bagel shops in 11 Michigan counties.

The 24-unit retailer has formed a new, wholly owned subsidiary, Michigan Bagel, and has agreed to open at least 20 Manhattan Bagel units -- inside D&W stores and at freestanding locations -- over a 36-month period. It opened its first -- a full-service, open-production Manhattan Bagel shop -- June 2 inside a newly remodeled, 55,000-square-foot store in Grand Haven, Mich.

Sources at D&W's corporate offices here said a menu including bagel sandwiches is featured at the Grand Haven unit's Manhattan Bagel counter, and seating is offered in the store's cafe.

"We are very excited about adding Manhattan bagels to the selection of products we currently offer our customers. We believe these acclaimed products will build upon our tradition of providing our customers with the finest quality products available to us," said Ron Cox, D&W's senior director of retail services, in a statement at the time of the agreement.

Cox could not be reached at press time for further comment.

But Rocco Fiorentino, vice president for business development for Manhattan Bagel, said this is the first time a supermarket has teamed up with Manhattan Bagel to become an area developer at Manhattan Bagel. (Area developers are franchisees that agree to open a specified number of units within a certain region.)

The second Manhattan Bagel unit inside a D&W is set for a new replacement store that will open in July in Holland, Mich. Prior to that, Michigan Bagel will open a traditional, freestanding Manhattan Bagel shop about 5 miles away from the Holland store that will supply the Holland store's unit -- a smaller kiosk format, said officials at Manhattan Bagel.

In addition to the 20 in-store and freestanding units, the D&W subsidiary acquired rights to place up to 10 Manhattan Bagel branded, self-service display units or limited-service kiosks inside supermarkets or convenience stores in the 11-county area.

Since D&W does not own convenience stores, the agreement could apply to c-stores or supermarkets owned by other companies, Manhattan Bagel's Fiorentino said.

He added that Manhattan Bagel is selective when it comes to making an agreement such as the one with D&W.

"D&W is outstanding from an operational standpoint and in quality. They're superior, one of the finest operations we've seen. That's one of the reasons we entered into this licensing agreement with them," Fiorentino said.

The first Manhattan Bagel operation, in the Grand Haven D&W store, got a send-off with an open-house party June 1. Local businesses, D&W customers and employees attended.

"It gave us a chance to introduce our products to people who aren't already familiar with them," Fiorentino said. A sign on the exterior of the store and a blurb in D&W's ad circular also call attention to Manhattan Bagel's presence in the store, Fiorentino added.

The recent linkup with D&W continues Manhattan Bagel's aggressive move into supermarket locations. Full-bake Manhattan Bagel units are currently operating inside Vons and Pavilions supermarkets in California, Kroger units in Georgia and North Carolina, Clemens Markets in Pennsylvania and Super Foodtown in New Jersey. In addition, branded displays are now in place in selected H.E. Butt Grocery Co. stores, Furr's Supermarkets in Texas, a Smith's Food & Drug Centers unit in Las Vegas and four Save Mart supermarkets in northern California.

Manhattan Bagel currently franchises, licenses or operates more than 320 stores in 18 states, Washington and Canada.