For all potential investors in the baking industry, we have outlined Nothing Bundt Cakes’ initial starting cost and potential profit/ salary that the franchise owner of this brand bakery can expect to make per year.
- Launching the new Nothing Bundt Cakes franchise will cost an investor between $440,800 and $636,500 with an included $35,000 Initial Fee.
- The franchisees of this brand are obligated to spend 9% of their weekly gross sales on costs associated with franchise royalty and marketing fees.
- The Nothing Bundt Cakes franchises make, on average, $1,295,169 in gross revenue per year with a 15% of profit margin.
- The Nothing Bundt Cakes franchise owner of the average earning location($1.3M in gross sales) can expect to make $195,000 of salary per year.
How Much Does The Nothing Bundt Cakes Franchise Cost
To launch the new Nothing Bundt Cakes franchise, an investor will need capital between $440,800 and $636,500 with an included $35,000 Initial Fee and all other costs that will occur till opening day.
The highest initial cost will be associated with real estate/ bakery construction improvements. The investor will need to spend between $155,000 to $240,000 to improve the bakery leasehold according to franchisor requirements.
Also, these types of franchises offer delivery options to customers, and because of that, it will be necessary to purchase a delivery vehicle that can cost between $13,200 and $33,200.
We must also mention expenses related to the initial purchase of certain items, such as cake design accessories, dry cake mixes, ingredients, small wares, and other supplies for business. The estimated cost of these items is approximately $16,000.
Table of initial costs:
- Initial Fee: $35,000
- Extension Fee: $0 to $10,000
- Rent and Security Deposit: $6,500 to $8,500
- Bakery/Real Estate Improvements: $155,000 to $240,000
- Architect – Design Fees: $9,800 to $12,500
- Fixtures and Equipment (Front of Bakery): $30,000 to $40,000
- Fixtures and Equipment (Back of Bakery): $110,000 to $125,000
- Exterior Signage Package: $8,000 to $12,000
- Initial Inventory: $20,100 to $23,800
- Point of Sale System (POS): $6,000 to $11,300
- Insurance: $2,800 to $5,500
- Business License and Permits: $1,500 to $4,500
- Professional Fees: $3,900 to $11,200
- Grand Opening Advertising Fee: $5,000 to $7,000
- Training Expenses: $4,000 to $7,000
- Delivery Vehicle: $13,200 to $33,200 (Monthly lease or loan payment)
- Additional Funds: $30,000 to $50,000 (Working capital for the first 3 months)
- ESTIMATED TOTAL INVESTMENT COST: $440,800 to $636,500
This estimation regarding costs to launch the new Nothing Bundt Cakes franchise supposes that the investor will lease the real estate/location of the bakery. If the new owner opts to purchase real estate, the necessary capital outlay will be much higher than the TOTAL of the above indicates.
Options To Cover Funding of Nothing Bundt Cakes Franchise
Investors have an option to fund starting this bakery only from third-party loan sources. As a company, the franchisor doesn’t offer direct or indirect loan options.
Nothing Bundt Cakes Franchise Fees
One time Fees
This franchisor charges a $35,000 Initial Fee immediately after the Franchise Agreement with investors is closed. The franchisee gets the right to use Nothing Bundt Cakes trademarks and operation manuals by paying this fee.
This franchisor currently doesn’t offer any initial fee discount programs, which means that all investors will need to pay the full price!
Grand Opening Advertising Fee
Franchisees will need to pay also and $5,000 to the franchisor’s bank account for the cost associated with the grand opening promotional campaign.
The franchisor itself will prepare and conduct the opening advertising marketing campaign, and the franchise is obligated to finance its cost. Promotional operations usually start one month before opening and last a few months after opening.
Ongoing Franchisor Fees
Nothing Bundt Cakes franchise owners spend 9% of their franchised bakery gross revenue on the costs associated with different royalties that this franchisor collects weekly.
Potential new owners must be aware that franchisor royalties are ongoing expenses and count on them because these expenses will be present throughout the whole duration of the franchise agreement!
We will now break down franchisor royalties item by item so that investors can better understand what these costs are and why they occur. Also, we will incorporate rent fees in this list, which are one of the highest operating costs that these franchises have on an ongoing basis.
The Nothing Bundt Cakes royalty fee is 5% of the bakery’s monthly/yearly Net Revenue. The franchisor calculates this fee every week, which means that the exact outlay fluctuates according to the past week’s sales level.
The royalty fee is the franchisor’s primary source of income, and the franchisee pays it for the ongoing business service/help and for using brand trademarks.
Marketing Royalty Fees
The marketing Production Fund Fee that this franchisor charge is 1%, and the Local Advertising Fee is 3% of the bakery’s weekly Net Revenue. So franchisees must count that they will need to pay a total of 4% for costs associated with advertising.
The Marketing Fund Fee is spent for promotion on a national level, and the local marketing fee is paid for advertising and promotional campaigns that take place near the territory of the bakery location.
Nothing Bundt Cakes franchises occupy approximately 2,000 square feet, and it is expected that franchisees will need to pay between $3,000 and $4,000 in landlord fees every month.
These bakeries are typically located on busy retail streets and in strip shopping centers in commercial and suburban areas, and renting these kinds of business spaces is not cheap!
However, the accurate monthly rental fee will depend on geolocation, so every investor must conduct their research according to the real estate rental prices presented in their State or town.
How Much Is Nothing Bundt Cakes Franchise Profit
To show the investors how much Nothing Bundt Cakes franchise profit potential is, we will reveal the average gross sales and how much is the profit margin of these bakeries.
Average Gross Revenue Per Year
The Nothing Bundt Cakes franchises make, on average, $1,295,169 per year in gross sales from products and goods sold to customers in the bakery or by delivery.
We have found financial stats for the 2020 fiscal year that reveals that the highest earning bakery has produced $3,122,238, and the lowest earning have made $459,560 in gross sales for that period!
Also, it is expected that it will be needed to pass at least two years after opening before the Nothing Bundt Cakes franchise owner can expect that his location will deliver average sales levels for this franchising system.
The expected gross sales in the first 24 months of business:
- 1st 12 Months = $885,285
- 2nd 12 Months = $1,120,536
Nothing Bundt Cakes Franchise Profit Margin
The Nothing Bundt Cakes franchises deliver a 15% profit margin from all gross sales that the franchised bakery makes throughout the year.
The 15% profit margin is very good for the franchising industry. Usually, franchises in the food sector deliver between 6% to 9% of the margin to their owners.
So, we can conclude that the owner of this bakery can expect to make a higher margin than, for example, McDonald’s franchisee. These bakeries sell bundt cakes; the baking products have a low manufacturing cost and good final price, which is reflected in high margins.
How Much is Nothing Bundt Cakes Franchise Owner Salary
The Nothing Bundt Cakes franchise owner of the average earning location($1.3M in gross sales) can expect to make $195,000 of salary per year.
As mentioned above, these franchises deliver to their owners between $459,560 and $3,122,238 in gross sales, so franchisees can anticipate that their yearly salary will be between $69,000 and $468,000.
The precise calculation of Nothing Bundt Cakes franchise owner salary depends primarily on how much sales level (gross revenue) a particular location makes!
However, even if franchised location delivers sales on the lower end, the franchisee still can expect to make at least a $69,000 salary which is more than the average salary of the franchise owners in the U.S.
How We Estimate Nothing Bundt Cakes Franchise Owner Salary Per Year
We will now break down the financial data this bakery brand has revealed in its FDD to show potential investors what they can expect!
Nothing Bundt Cakes(2022) FDD financial data
Net revenues of 270 franchises, which have been operating for at least 24 months:
- The average Net Revenue was $1,295,169
- The Median Net Revenue was $1,210,422
- The lowest earning location has $458,198 of Net Revenue
- The highest earning location has $3,108,047 of Net Revenue
Also, this franchisor has stated in its franchise disclosure document that its franchise locations deliver an EBITDA of 20.3%. We have calculated that franchise owners can expect to make 15% of the profit margin when they pay all taxes, which is a pretty real estimation.
Is it Profitable to Own Nothing Bundt Cakes Franchise
Since Nothing Bundt Cakes franchises make a high gross revenue with a good profit margin, owning this bakery is a very profitable business venture.
Also, this is a medium-cost franchise and the Return Of Investment (ROI) time is 4 to 5 years which is excellent if we compare it to other franchising systems available in the U.S market.
Currently, in 2022, there are approximately 400 Nothing Bundt Cakes bakeries opened, and they have grown more than 50% in the last three years by a number of locations.
This upward trajectory suggests that investors have recognized that this franchising opportunity is a good investment and highly profitable business venture!
Requirements to Own Nothing Bundt Cakes Franchise
Initial Capital Requrement
To get a green light as a developer of the new franchised location, investors need to have a Net Worth of $600,000 and possess Liquid Assets (Cash)of $150,000.
These are two main capital requirements that this franchisor demand that all of its franchisees must fulfill!
Spousal Liability Requirement.
Sometimes, the investor spouse must sign a spousal liability document even if they have no ownership interest in the franchise. This is a very important fact that we must outline!
As a potential franchisee, you must know that this guarantee will place your and your spouse’s marital and personal assets, including your house, at risk if your franchise fails.
Sales Performance Requirement
Every new franchise must fulfill minimum sales performance levels. A franchisee unable to maintain certain sales levels can lose territorial rights, and the franchisor can terminate the franchise agreement to the investor’s detriment.
Minimum gross sales requirements:
- 1st Year of Operations $350,000
- 2nd Year of Operations $400,000
- 3rd Year of Operations $450,000
- 4th Year of Operations $500,000
- 5+ Years of Operation $550,000
Owner participation in business requirement
The franchisee, as an owner, isn’t obligated to have a full-time presence at the franchise location. However, every owner must hire a full-time operator certified by the franchisor by successfully passing initial training.
Nothing Bundt Cakes Franchisee Training
The Nothing Bundt Cakes initial training lasts up to 4 weeks, and it involves training in product preparation and packaging, maintaining financial controls, and learning general bookkeeping procedures and operational techniques.
The training usually takes place in this brand bakeries in Dallas, Texas!
Also, this franchisor sends its opening representative to the new franchise location up to 5 days immediately after opening day to provide new owner assistance and additional training regarding actual business operation.
The instructors and instructional materials are free for up to two people. Still, the investor must count on expenses associated with the transportation, lodging, food, and wages of its trainees during initial training.
How Much Is Nothing Bundt Cakes Franchise Agreement Duration
The Nothing Bundt Cakes Franchise Agreement length is ten years from the Bakery opening date. After this time passes, By paying 50% of the current Initial Fee price, franchisees can renew it for additional ten years.
Are All Nothing Bundt Cakes Franchises
95% of all Nothing Bundt Cakes bakeries are operated and owned by franchisees. Only 14 bakeries are company-owned, and approximately 400 franchised locations are currently presented in the U.S.
Who Owns Nothing Bundt Cakes
Since 2021 Roark Capital Group has been the owner of Nothing Bundt Cakes. This brand operates under NBC Holdings, LLC, a Nevada limited liability company, and franchising opportunities are offered under NBC Franchisor LLC.
Dena Tripp and Debbie Shwetz opened the first bakery under these trademarks in Las Vegas in 1997. They sold their company in 2016 to Levine Leichtman Capital Partners (LLCP), an equity firm that later resold this well-known bakery brand to the Roark Group.
We have summarized all facts regarding the Nothing Bundt Cakes franchise’s initial cost expenditure to show potential investors how much capital they will need to launch a new bakery under these trademarks.