Nothing Bundt Cakes Franchise Profit Margin Looks High For 2022

Nothing Bundt Cakes franchise specializes in the sale and delivery of specialty bundt cakes and also sells other food items and retail merchandise. They offer a variety of cake flavors, with red velvet, “chocolate chocolate chip,” and white chocolate raspberry among their most popular. Nothing Bundt Cakes also makes cakes for holidays, birthdays, weddings, and other special occasions.

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00:00 Introduction
00:44 Locations
00:53 Competition
01:08 Inicial Investment & Franchise Fee
01:55 Ideal Franchise Candidates
02:13 Sales & Profits
02:57 Conclusion
03:26 Subscribe!

#NothingBundtCakesFranchiseProfitMarginLooksHighFor2022 #NothingBundtCakesFranchise #VettedBiz

Nothing Bundt Cakes was started in 1997 when Dena Tripp and Debbie Shwetz joined forces to make cakes for their friends and family. Their friends and family kept asking for more and more cakes, and they soon realized that they could make a business out of it. In the years since Nothing Bundt Cakes has grown nationwide.

The current CEO is Kyle Smith, who has been in this role since 2017. Previously, he has served as President and as Chief Operating Officer for the company.

As of the end of 2020, Nothing Bundt Cakes operated 362 franchised units and 14 corporate units.
Nothing Bundt Cakes franchise competes primarily with grocery stores and local bakeries within the larger bakery industry. They also compete with other bakery franchises such as Gigi’s Cupcakes, Golden Krust, and Cold Stone Creamery but separate themselves by offering luxury products made from high-quality ingredients at a low price. They also pride themselves on their shops’ “mom and pop” feel, which allows them to compete particularly with local bakeries.

While it is at this point very mature, the bakery industry is still achieving modest growth. Between 2016 and 2021, it grew at an annual rate of 2.9% to $11.2 billion in revenues and is projected to grow at an annual rate of 1.0% between 2021 and 2026.

The estimated total investment necessary to begin the operation of a Nothing Bundt Cakes Franchise ranges from $440,800 to $636,500. This is more expensive than the cost of opening a Gigi’s Cupcakes franchise ($227k-$432k) and can be more expensive than opening a Golden Krust franchise ($226k-$620k).

The following costs are part of the upfront costs included in the initial investment for a Nothing Bundt Cakes franchise.

Many of these are one-time fees that are needed to launch the franchise.

Review the chart below to see how much it costs to buy a Nothing Bundt Cakes franchise in 2021.

The initial Nothing Bundt Cakes Franchise Fee is $35,000. You have to pay this upfront fee when opening a Nothing Bundt Cakes franchise.

Franchise candidates and their partners must have a combined liquid capital of at least $150,000 and a net worth of at least $600,000. Ideal franchise candidates also have business management, HR, or marketing experience, a strong belief in the Nothing Bundt Cakes product, and a passion for customer service.

Royalty: 5% of Bakery’s weekly Net Revenues

Marketing Production Fund: 1% of Bakery’s weekly Net Revenues

Local Advertising Fee: 3% of Bakery’s weekly Net Revenues

In 2020, Nothing Bundt Cakes reported the median Franchisee Principal’s Benefit as 23.8% of revenue for 236 bakeries (representing the bakeries that had provided the franchisor with complete 2020 financial statements by April 26, 2021).

Based on a midpoint investment of $538,650 with estimated profits of $288,080 at a 23.8% profit margin, it would take about 2 years to recoup your investment.

To assign a valuation multiple for Nothing Bundt Cakes franchises, we leverage estimates from the Business Reference Guide.

When you go to sell a Nothing Bundt Cakes franchise, based on the median valuation multiple for the Bakery industry of 0.70 and net sales averaging $1,169,148 between 2019 and 2020, it would sell for $818,403. This is significantly higher than the midpoint investment of $538,650.

Nothing Bundt Cake’s franchising company has increased profits by about 17% from 2019 to 2020. The reason for this increase is because of the increase in total revenue in this period, as their profit margin has stayed roughly the same.

Over the last three years, 136 new Nothing Bundt Cakes locations have opened for an average of around 45 new locations a year. This consistent growth suggests a favorable business environment for new franchises.

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