Nothing Bundt Cakes Franchise Cost Recoup Fast with a 20%+ Profit Margin

Written by: Owen Boyd
Last Updated: August 4, 2022
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Nothing Bundt Cakes Franchise

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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Contents

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. 

Competition

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.  

Nothing Bundt Cakes Franchise Cost

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.

ESTIMATED INITIAL INVESTMENT

Type of
Expenditure
AmountWhen DueMethod of
Payment
To Whom
Payment is to be
Made
Initial Franchise
Fee
$35,000Upon signing
Franchise
Agreement

 Lump Sum

Nothing Bundt Cakes

Extension Fee$0 to $10,000As IncurredLump SumNothing Bundt Cakes
Rent and Security
Deposit
$6,500 to $8,500As IncurredAs AgreedLandlord; Utility
Companies
Bakery
Improvements
$155,000 to $240,000As IncurredAs AgreedOutside
Suppliers
Architect – Design$9,800 to $12,500As IncurredAs AgreedDesignated or
Approved
Suppliers
Fixtures and
Equipment – Front
of Bakery
$30,000 to $40,000As IncurredAs AgreedDesignated or
Approved
Suppliers
Fixtures and
Equipment – Back
of Bakery
$110,000 to $125,000As IncurredAs AgreedDesignated or
Approved
Suppliers
Exterior Signage$8,000 to $12,000As IncurredAs AgreedDesignated or
Approved
Suppliers
Initial Inventory$20,100 to $23,800As IncurredACH Upon
Shipment of
Product or
As Agreed
Shipp
Distribution and
Approved
Suppliers
Point of Sale
System
$6,000 to $11,300As IncurredAs AgreedDesignated or
Approved
Suppliers
Insurance$2,800 to $5,500As IncurredAs IncurredInsurance
Company
Business License
and Permits
$1,500 to $4,500As IncurredAs IncurredGovernment
Agencies
Professional Fees$3,900 to $11,200As IncurredAs AgreedAttorney,
Accountant
Opening
Advertising
Program
$5,000 to $7,000As IncurredAs IncurredNothing Bundt Cakes
Training Expenses$4,000 to $7,000As IncurredAs IncurredThird Parties
Delivery Vehicle-
Monthly lease or
loan payment
$13,200 to $33,200As IncurredAs IncurredThird party
vendors
Additional Funds-3
months
$30,000 to $50,000As IncurredAs IncurredEmployees and
Suppliers
TOTAL
ESTIMATED
INITIAL
INVESTMENT
(including lease
costs but not real
estate purchase
costs)
$440,800 to $636,500   
nothing bundt cakes

Franchise Fee

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 Requirements

Franchise candidates and their partners must have 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. 

 

Owning a Nothing Bundt Cakes Franchise Requires Ongoing Fees

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

How much do Nothing Bundt Cakes franchise owners make?

Calendar YearNumber of
Included
Franchisee
Bakeries
Average Net
Revenues
% Growth in
Average
Net Revenues
No. of
Bakeries
Above/Below
Average
Med ianHigh Net
Revenues
Low Net
Revenues
2019270$1,168,968n/a117 / 153$1,127,873$2,791,568$414,269
2020270$1,295,16910.8%109 / 161$1,210,422$3,108,047$458,198
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2019 Nothing Bundt Cakes Franchise Median Sales: $1,127,873

Initial investment (midpoint)% Profit margin of median franchise salesEstimated Profits Time to recoup investments
$ 538,65010%$ 112,7875 years
15%$ 169,1813 years
20%$ 225,5752 years

2020 Nothing Bundt Cakes Franchise Median Sales: $1,210,422

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). 

P&L CategoryAverage 236 Bakeries $Average 236 Bakeries %No. of Bakeries
Above / Below
Median %
Net Revenues$ 1,307,280 96 / 140 
COGS304,10323.3%111 / 12523.1%
Average Gross Margin$ 1,003,17776.7%125 / 11176.9%
Payroll415,90031.8%112 / 12431.4%
Occupancy75,8015.8%122 / 1145.9%
Marketing & Advertising51,1853.9%113 / 1233.8%
Other Expenses194,55014.9%110 / 12614.5%
Interest Expense6,3100.5%85 / 1510.1%
Depreciation & Amortization16,4561.3%94 / 1420.7%
Taxes7,0730.5%60 / 1760.2%
Total Expense$ 767,27758.7%130 / 10659.7%
Net Income$ 235,90118.0%112 / 12417.3%
Add Backs to Net Income Calculate EBITDA:    
Interest Expense6,3100.5%85 / 1510.1%
Depreciation & Amortization16,4561.3%94 / 1420.7%
Taxes7,0730.5%60 / 1760.2%
EBITDA$ 265,74120.3%112 / 12419.7%
Reported Franchisee Principal Expenses46,1543.5%90 / 1461.7%
Total Franchisee Principal’s Benefit$ 311,89523.9%117 / 11923.8%

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

Is the Nothing Bundt Cakes Franchise Profit Worth the Cost?

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 cakes

Nothing Bundt Franchising Income Statement:

Nothing Bundt Franchising, LLC Consolidated Statements of Income

52 weeks ended December 27, 2020 52  weeks ended December 29, 2019
Revenues
Franchise fees $ 1,297,000 $ 1,375,000
Royalty fees 21,173,775 17,130,272
Advertising fund fees 13,609,703 10,933,662
Other revenue 205,396 125,608
36,285,874 29,564,542
Expenses
General and administrative expenses 11,058,624 8,871,492
Advertising fund expenses 13,609,703 10,933,662
Depreciation 337,472 232,470
25,005,799 20,037,624
Income before income taxes 11,280,075 9,526,918
Income taxes expenses (357,387) (257,029)
Net income $ 10,922,688 $9,269,889

See accompanying notes to consolidated financial statements.

Nothing Bundt Franchising Income Statement Key Insights:

Nothing Bundt Cakes’ 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. 

nothing bundt cakes

How many Nothing Bundt Cakes locations have opened and closed?

Outlet TypeYearOutlets at
the Start of the
Year
Outlets at
the End of the
Year
Net Change
Franchised2018234276+42
2019276318+42
2020318362+44
Company- Owned2018660
2019613+7
20201314+1
Total Outlets2018240282+42
2019282331+49
2020331376+45

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. 

 

Conclusion

Nothing Bundt Cakes provides potential franchisees with high-profit margins and the opportunity to make a relatively quick return on investment.

Additionally, the profitability of the franchisor and the steady growth in new franchise locations suggest a strong business model. And a favorable environment for new franchises. However, one potential drawback is its relatively high initial investment amount relative to its competitors.

While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the Food and Beverage Industry.

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