In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the Corner Bakery Cafe franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Corner Bakery Cafe franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of Corner Bakery Cafe’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average net sales, delivery fees, net revenue, cost of goods sold, labor (hourly and management), other operating expenses, advertising expenses, fixed costs and depreciation, occupancy, restaurant contribution, depreciation, and restaurant adjusted EBITDA for the 80 company-operated Corner Bakery Cafes that have been in operation for at least 36 months (which group does not include “limited hour” cafes)
- 2014 average net sales, delivery fees, and net revenue for the 20 franchise-operated Cafes that have been in operation for at least 36 months (which group does not include “limited hour” cafes)
- 2014 average net sales, delivery fees, and net revenue for the combined 80 company-operated Cafes and 20 franchise-operated Cafes that have been in operation for at least 36 months (which groups do not include “limited hour” cafes)
- various 2014 performance metrics for the 80 company-operated Cafes (including information related to sales during various day parts and online ordering)
Section I – Background Information
It was in 1991 when the first Corner Bakery Cafe was established at the corner of Clark and Grand in downtown Chicago, producing artisan breads using top-notch fresh ingredients. Soon people wanted sandwiches on that bread, and the menu kept growing from there to eventually include pastries, breakfast dishes, gourmet sandwiches, homemade soups, salads, and pasta.
It falls in the fast-casual segment, offering seasonal menu options that are definitely better than standard fast food.
It wasn’t until 2007 that aggressive franchising began, and the cafe now has 190 locations nationwide. Headquartered in Dallas TX, here’s how the Corner Bakery Cafe keeps things hot in the neighborhood:
Real Deal Food
They cook in real kitchens rather than assembly lines. They use more than 40 different kinds of fresh herbs, fruits, and vegetables. This is real cooking with all dishes made to order. They’ll even accommodate special requests as much as possible.
This fits in well with their newer model of really connecting with the neighborhood in which a location operates. The first location to open with the newly overhauled concept was in 2005 in Laguna Niguel, CA. It was after the success there that the chain started to work towards franchising.
The Ownership Shuffle
Corner Bakery Cafe started out in 1991 as a project of Lettuce Entertain You Enterprises (LEYE), a Chicago-based theme restaurant operator.
In 1995 it was purchased by Brinker International, a multinational hospitality industry company that owns Chili’s and Maggiano’s Little Italy restaurant chains.
In 2006 it was then purchased by Il Fornaio and private equity investment firm Bruckman, Rosser, Sherrill and Company.
Then Il Fornario (and therefore the cafe) was acquired in 2011 by Roark Capital Group, an Atlanta-based private equity firm that specializes in business and consumer service companies. I’m not saying whether any of this is bad or good, but it’s a lot of movement on the ownership front.
The Press Room
You’ve heard me complain about any national franchise whose press room is a mess, with nothing recent or notable. I mention this because the Corner Bakery Cafe press page on its website illustrates a fine example of one that’s in great shape.
It’s not stellar, mind you, but it’s a very solid showing, averaging one or two press releases a month that cover not just menu changes and promotions, but also other interesting company news and significant pieces based on specific locations.
Bringing in the Financial Big Guns
Earlier this year the Cafe brought on board a new Chief Financial Officer to the executive team. After an exhaustive six-month search, Salil Bapat was by far the strongest candidate.
He was most recently CFO for YUM brands (Taco Bell, KFC, Pizza Hut, etc.) in their Latin America and Caribbean region, and before that in Thailand and South Korea. Bapat holds an MBA from Thunderbird School of Global Management, is fluent in five languages, including English, Russian, Hindi, German and Spanish.
Section II – Estimated Costs
- Please click here for detailed estimates of Corner Bakery Cafe franchise costs, based on Item 7 of the company’s 2015 FDD.