Franchise Costs: Detailed Estimates of Nothing Bundt Cakes Franchise Costs (2017 FDD)

This post was updated on July 2, 2017 to reflect information from Nothing Bundt Cakes’ 2017 FDD (Item 7).

Detailed Estimates of Nothing Bundt Cakes Franchise Costs Based on Item 7 (Estimated Initial Investment) of Nothing Bundt Cakes’ 2017 Franchise Disclosure Document

• In general, none of the expenses listed in the chart below are refundable, except any security deposits you must make may be refundable. The franchisor does not finance any portion of your initial investment.

1.  Initial Franchise Fee:  $30,000

2.  Extension Fee:  $0 to $10,000

• Under the Franchise Agreement, you are required to purchase or lease an Approved Location for the Bakery meeting the franchisor’s standards and specifications within 90 days of the Effective Date of the Franchise Agreement. In the event you do not meet the 90 day site selection deadline, the franchisor will charge you a fee of $3,500 on the 90th day via ACH transaction.

• The franchisor has the right to terminate your Franchise Agreement if you fail to pay or if it is otherwise unable to process the $3,500 payment.

• However, in the event you open your Bakery within 270 days of the Effective Date of the Franchise Agreement, the franchisor will refund the $3,500 fee.

3.  Rent and Security Deposit:  $6,500 to $8,500

• Each Bakery location will occupy approximately 1,800 square feet of space. Bakery locations for Nothing Bundt Cakes Bakeries typically are on busy retail streets, in strip shopping centers, and other venues in retail, commercial, and suburban areas.

• The amounts listed above reflect one month’s rent and a security deposit, which typically equals one month’s rent.

• Depending on your local jurisdiction, water tap, sewer tap, and other similar fees may be required. These fees are not included in the estimate and you should determine if you will have to pay these fees and the amount of such fees before you purchase the franchise.

4.  Bakery Improvements:  $147,000 to $264,000

• Bakery improvement costs include a modified, above-ground grease trap, electrical, carpentry and similar work, and contractor’s fees.

• The lower figure assumes that the landlord bears many of the costs of Bakery improvements (even though it then might amortize those costs in your monthly rent).

• You may not act as your own general contractor but must use a licensed, bonded contractor with food/restaurant build-out experience.

5.  Architect – Design:  $9,800 to $10,500

• You must use an approved architect. Included in these costs are a design site visit, code research and space layout review (front and back of the Bakery), and construction drawings.

6.  Fixtures and Equipment – Front of Bakery:  $32,000 to $35,000

• This includes interior signage such as promotional/seasonal advertising packages, wall hangings/pictures, point of purchase signage, and digital menu board. Also included are lighting, phone system, furnishings, millwork and woodwork, music system, tax, shipping, and opening print materials orders. You must have shredder capabilities.

7.  Fixtures and Equipment – Back of Bakery:  $90,000 to $97,000

• This includes all large kitchen equipment, kitchen small wares, office supplies, the office equipment and crafting computer, and a copier. Any used equipment you wish to purchase must be approved by the franchisor.

8.  Exterior Signage:  $7,500 to $11,000

• This cost is for one exterior Nothing Bundt Cakes approved sign. The variance is the size of the sign and other required materials. This number does not include awnings.

9.  Initial Inventory:  $20,100 to $20,200

• This estimated amount includes cake design accessories, dry cake mix ingredients, smallwares, and other supplies that are distributed through the franchisor’s affiliate, Shipp Distribution. The estimate also includes the initial cost of your food order from local suppliers for flavorings, packaging, miscellaneous bakery list items, and linen.

10.  Point of Sale System and Monthly Technology Fee:  $19,937

• This includes a DSL high speed internet connection, the point of sale system with the recommended 3 point of sale stations and all associated cables, monitors, printers, and security router, excluding taxes.

• This estimate also includes the $105 set-up fee associated with linking your Bakery to the franchisor’s E-Commerce Program for online ordering and delivery, which is payable to the franchisor’s designated supplier.

11.  Insurance:  $2,800 to $4,000

• These amounts reflect potential monthly costs. Insurance costs may be substantially higher in areas of the country subject to natural disasters, like hurricanes.

12.  Business License and Permits:  $1,500 to $2,500

• These are general estimates for permits and licensing that may be required by local and state governments.

13.  Professional Fees:  $3,900 to $11,200

• The estimate assumes that you will employ an attorney to help you negotiate your lease for the Bakery premises.

• In addition, you may choose to employ an attorney, accountant, and other consultants to help you evaluate the franchise offering and your establishment of a new business, and in obtaining all required permits and licenses to establish and operate the Bakery. In addition, you may also form a corporation or other entity to operate the business.

14.  Opening Advertising Program:  $5,000 to $7,000

• You must pay to the franchisor $5,000 when you execute a Franchise Agreement. The franchisor will spend this amount on an Opening Advertising Program for initial marketing, advertising, and promotions in your Territory.

• Your grand opening must be held within 30 to 45 days after your Bakery opens. The minimum amount to be spent for your Opening Advertising Program will be $5,000, but you may be required to spend up to $7,000.

• This estimate does not cover the cost of samples you may purchase from other Bakeries to promote the opening of your Bakery.

15.  Training Expenses:  $4,000 to $6,000

• You will incur expenses associated with the training program. For this training program, the franchisor provides instructors and instructional materials at no charge for up to two people, but you must pay for transportation, lodging, food, and wages (if you send any employees) for your trainees.

16.  Additional Funds – 3 Months:  $20,000 to $40,000

• This item estimates working capital needed to supplement your first 3 months of operation (other than the items identified separately in the table).

• This estimate includes the monthly cost of in-store music, POS System monthly fees, and some system maintenance costs. These expenses include payroll costs but not any draw or salary for you.

• The franchisor assumes that you can use your existing vehicle in connection with Bakery deliveries and the costs of such vehicle are not included above.

17.  Total Estimated Initial Investment:  $400,037 to $566,837