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Ones to Watch | By Judy Kneiszel

The Original Brooklyn Water Bagel Co.
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For all the displaced New Yorkers of the world grappling with the mystery of why they can’t find a bagel like the bagels they grew up with, Steve Fassberg has the answer: It’s the water.

A bagel is made with water and boiled in water before it is baked. And Fassberg says there’s no water in the world like Brooklyn water. Its unique chemical composition, he says, is what makes a Brooklyn bagel crisp on the outside and chewy on the inside, not soft and doughy like bagels found in the rest of the country.

Since he couldn’t come up with a way to effectively transport enough Brooklyn water to his adopted state of Florida to make his bagels, Fassberg set out more than five years ago to replicate Brooklyn water for making bagels anywhere in the world.

“This is an invention more than a recipe,” he says. “We’ve really hit a nerve here. We knew we’d be accepted if we could make the science work, and we had 300 franchise inquiries in the first 12 weeks we were open for business.”

The replicated Brooklyn water, the result of a 14-step patented water filtration system from Aquathin Corporation, is used not only in the bagel-making process, but also is bottled for drinking. It is also used to brew the private-label gourmet coffee and make the carbonated beverages and ice at the Original Brooklyn Water Co., for a complete Brooklyn water experience.

The Original Brooklyn Water Bagel Co.

President, CEO & Founder: Steve Fassberg

Headquarters:Delray Beach, Florida

Year Started: 2009

Annual sales: Undisclosed

Total Units: 1

Franchise Units: 0

www.brooklynwaterbagels.com

“Everything in a restaurant starts with water,” Fassberg says. “From Coke to coffee to gravy to soup stock, and especially bagels. And while most of the country, in fact most of the world, has problems with their water, now with this technology, Brooklyn bagels can be made anywhere.”

Once he had the water problem worked out, Fassberg put his mind to the development of the franchise model and its menu items, operating procedures, and food-delivery systems. His 3,000-square-foot pilot store seats about 100 customers and has been up and running in Delray Beach, Florida, since August. The restaurant puts the bagels on full display, and customers can watch them being made behind glass, starting with the station where Brooklyn water is recreated and chilled all the way to the stations where the dough is made, shaped, and boiled, then cooled, seeded, and baked.

The jumbo bagels are available in 26 varieties, including pumpernickel, multigrain, garlic, and, of course, “everything.” Customers also have a choice of nine cream cheeses including vegetable, scallion, and nova spread with smoked fish—all in both a regular and low-fat version.

Fassberg says he’s poised to spread his water and bagel expertise throughout the country with an impressive list of industry leaders on his advisory committee that includes Larry Feldman, CEO of Subway Development Corporation of Washington, which owns more than 1,000 Subway franchises. Kevin Holbrook, recent president of coffee wholesaler Boca Java, is chief financial officer of the concept.

Fassberg says the Original Brooklyn Water Bagel Co. concept can be expanded to 5,000 square feet or scaled back to 300 square feet for airports and college campuses. The concept has been approved for franchising in every state, and Fassberg hopes to see 300 to 500 stores open this year and up to 2,000 in the next five years.

“We’ve taken a mom-and-pop business concept and made it a scalable franchise model that is profitable for anybody in any market,” he says.

There are about 40 items on the Brooklyn Bagel Co. menu, including breakfast and lunch sandwiches made with bagels, fresh-cut french fries, and chopped salads. Breakfast sandwiches start at $3.25 for an egg and cheese on a bagel. Three-egg omelets, served with the customer’s choice of home fries or waffles fries and a bagel, are priced starting at $5.45 for a plain cheese omelet. Other choices include the three-meat omelet or the nova, egg, and onion omelet for $6.95. Omelets on a bagel range in price from $4.75 to $4.95. The average-per-person breakfast ticket is $6.63. Lunch comes in slightly higher at $8.74 per person.

About 60 percent of total sales are breakfast, but bagels are flying out the door from 7 a.m. to 4 p.m. and baking continues 24 hours a day.

Original Brooklyn Water Bagels are $0.95 each, $4.95 for half a dozen, and $9.95 for a baker’s dozen. A bagel with butter is $1.69 and a bagel with plain cream cheese is $1.99.

“The demand is so great, we’ve sold as many as 400 dozen bagels on a busy day,” Fassberg says. “Bagels are no longer ethnic; they are global. My demographic can’t be broken down by age, income, or ethnicity. My demographic is just ‘hungry.’”

His customers might be hungry, but a growing number of consumers are health-conscious, too. Fassberg offers them Scoopers, a menu offering with almost all of the dough removed from the bagel, which is then filled with a choice of custom cream cheese, an omelet selection, low-fat veggie tuna, freshly grilled chicken, a fresh salad, deli meat, or cheese. Fassberg says that while a bagel weighs in at about 210 calories, a “scooped” bagel has 90–100 calories.

An Original Brooklyn Water Bagel Co. franchise is a turnkey operation with a water filtration system capable of producing 3,600 gallons of Brooklyn water per day included as part of the build-out price.

Because the restaurant footprint can vary from 300–5,000 square feet for different unit types, the price structure for a franchise varies.

It costs Fassberg only 7.9 cents to make a bagel and his 19 percent food cost is attractive to franchisees because it is one of the lowest in the industry while still maintaining high quality, he says. The way he achieves this low cost is to buy flour, a key ingredient in bagels, directly from General Mills. He also keeps costs down by keeping the menu simple.

“We’ve kept food delivery simple,” Fassberg says. “We use basic ingredients—flour, eggs, chicken, and cream cheese—and limit the menu to about 40 items so it’s easy to execute and requires only about six square feet of pantry space.”

What’s attractive to customers, he adds, is that each Original Brooklyn Water Bagel store will include “more than enough” terminals to maintain less than a two-minute average wait time.

“We want to make sure that customers are happy with their experience, and we think we’ve nailed the system,” he says. “You don’t need a baker, you don’t need a chef—you just need people who can follow a manual. It’s all done by pushing a button; it’s all automated, but the bagels come out perfect every time. You can make just what you need and make bagels on demand hot and fresh like Krispy Kreme.

“And as every New Yorker knows, there’s nothing like a hot bagel right out of the oven.”