Published on 19 Oct 2022 Time 5 min read Last update by 13 Feb 2024

Here’s What You Need to Know Before Opening an Einstein Bagel Franchise (2024)

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Einstein Bros. Bagels is an American chain that specializes in bagels and coffee. They currently have 390 locations.

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How is Einstein Bagel Franchise Positioned in the Food and Beverage Industry?

The Food and Beverage industry in the USA accounts for 13% of all manufacturing employment in the country. Around 1.46 million people get employed in this industry. Food franchises make up 36% of the total franchise establishments in the USA and it is expected to create 1.6million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x.

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How Much is an Einstein Bagel Franchise?

The initial Einstein Bagel Franchise Fee is 35,000. You have to pay this upfront fee when opening an Einstein Bagel franchise. There are other pre-opening costs detailed below:

Pre-Opening Costs – Franchised Restaurants

Type of expediture Amount To Whom Payment Is To Be Made
Low High
Initial Franchise Fee $35,000 Us
Design Review Fee $2,000 Us
Real Estate leasing $25,000 $56,250 Landlord or land owner
Opening Inventory, Smallwares and Supplies $15,000 $25,000 Us and suppliers
Initial Marketing and Promotion $10,000 Suppliers
Insurance $7,500 $15,000 Insurance Providers
Training Expenses $1,000 $14,000 Suppliers and employees
Miscellaneous Opening Costs $1,300 $3.600 Suppliers and employees
Business Licenses $500 $5,000 Government Agencies
Security Deposits $4,000 $10,000 As Negotiated
Additional Funds (three months) $12,000 $50,000 Us, suppliers, employees and other creditors
Sub-Total Pre-Opening Costs for Franchised Restaurants $113,300 $225,850

Einstein Bagel Franchise Cost

The estimated total investment necessary to begin the operation of an Einstein Bagel Franchise ranges from $451,000 to $710,000. The following costs are part of the upfront costs included in the initial investment for an Einstein Bagel. 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 an Einstein Bagel franchise in 2022.

Estimated Initial Investment

Type of expediture Amount To Whom Payment Is To Be Made
Low High
Construction Costs $210,000 $310,000 General Contractors and suppliers
Computer Equipment & Electronics $26,000 $54,000 Suppliers and Us
Furniture, Fixtures & Equipment $175,000 $261,000 Suppliers
Signage & Graphics $10,000 $50,000 Suppliers
Professional Fees (incl. architectural or engineering fees and permit and impact) $30,000 $35,000 Service Providers; Architects or Engineers; Government Agencies
Sub-Total Development Costs for Franchised Restaurants $451,000 $710,000
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Ongoing Fees

Royalty: 5% of Gross Sales under the Franchise Agreement and 6.5% of Gross Sales under the License Agreement (reduced to 4% of Gross Sales for airport locations)

Marketing Fee: 4% of Gross Sales under the Franchise Agreement

Grand Opening Marketing Program: $10,000 under the Franchise Agreement

How much do Einstein Bagel franchise owners make?

Franchised Restaurants
Median Gross Sales $873,150
Average Gross Sales $885,011

2021 Einstein Bagel Median Franchise Sales: $873,150

Initial investment (midpoint) %Profit margin of median franchise sales Estimated Profits Time to recoup investments
$580,500 10% $87,315 8 years
15% $130,972 6 years
20% $174,630 5 years

Based on the median sales provided by Einstein Bagel’s franchise locations, at an average of a 15% profit margin it will take around 6 years to recoup your investment. This is slightly more than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Food and Beverage stores; the extent of market penetration and brand awareness that Einstein Bagel stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

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Is the Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Einstein Bagel franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $5 Million Net Sales

  • Estimated Selling Price = Net Sales * 0.55

When you go to sell an Einstein Bagel franchise based on the median multiple of .55 and net sales in 2021 of $873,150, it would sell for $480,232. This is slightly lower than the midpoint investment of $580,500.

The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

Caribou Coffee (Franchisor) Income Statement Key Insights:

Statement of Income

(in thousands)Fiscal Year Ended
December 28, 2021
Coffeehouse and bagel bakery sales$709,744
Franchise royalties and fees$20,000
Franchise advertising sales$3,524
Franchise and commercial product sales$124,196
Net Sales$857,464
Cost of goods sold$173,808
Other operating expenses$101,794
Total coffeehouse and bagel bakery expense$577,706
Franchise operations and other expenses$2,357
Ad fund expense franchise$3,524
Franchise and commercial product cost of goods sold$94,319
Depreciation and amortization$41,502
General and administratrive expenses$71,892
Pre-opening expenses$1,109
Total costs and expenses$792,409
Operating income (loss)$65,055
Interest expense, net$17,831
Other (income) expense($1,029)
Pre-tax income (loss)$48,253
Income Tax expense (benefit)$10,741
Net income (loss)$37,512
Less net income (loss) attributable to noncontrolling interest$1,480
Net income (loss) attributable to Caribou Coffee Company, Inc.$36,032

Einstein Bagel is a very profitable business for the franchisor who retained earnings of $36.03 million in 2021. Compared to a loss of $16.56 million in 2020, this is a good indication of high growth as a company overall.


How many Einstein Bagel units have opened and closed?

Outlet Type Year Outlets at the Start of the Year Outlets at the End of the Year Net Change
Franchised 2019 50 52 2
2020 52 53 1
2021 53 54 1
Company-Owned 2019 359 353 -6
2020 353 337 -6
2021 337 322 -5
Total Outlets (United States) 2019 409 405 -4
2020 405 390 -15
2021 390 390 0

Over the last three years, the company has been in decline. Franchising units have increased but company-operated stores have decreased. Over the last three years, stores have closed at a rate of 11 units a year. This is an indicator that these stores may not be performing well or their franchise term is up and they are not renewing it.


Einstein Bagel offers people the opportunity to be a part of a business that has amazing returns and it offers a reasonable payback period. While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Food and Beverage Industry.

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