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FDD Talk 2015: The Nothing Bundt Cakes Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 14, 2015

in Bakery Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings

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Nothing Bundt Cakes Photo by felsull

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Nothing Bundt Cakes franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Nothing Bundt Cakes franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Nothing Bundt Cakes’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • net revenues of two Bakeries operated by Nothing Bundt Cakes’ affiliate Denbra, Inc. in Las Vegas, Nevada (the “Affiliate Bakeries”) for the calendar years January 1, 2013 through December 31, 2013 and January 1, 2014 through December 31, 2014 (the “Measurement Period”)
  • average net revenues of 60 franchisees who have been operating Bakeries for at least 24 months as of December 31, 2014, and provided Nothing Bundt Cakes with complete net revenue data for the Measurement Period (the “Reporting Franchisees”)
  • average net revenues, average cost of goods sold, average gross margin, and average occupancy costs achieved by 46 of the 60 Reporting Franchisees from January 1, 2014 through December 31, 2014
  • average net revenues achieved during the first and second full 12 months of business by all 21 Bakeries that opened during the 2012 calendar year and have been open a minimum of 24 months

Section I – Background Information

Nothing Bundt Cakes Plans Growth, Expansion

Nothing Bundt Cakes started out small, but has been steadily growing ever since. The company opened its 100th location in September 2014 in San Marcos, California, ahead of expectations to reach 100 in 2015.

Plans are to open 30 to 40 bakeries each year through 2019. The stores, which have a cheery “Mom-and-Pop” atmosphere, can be found in 28 states, and the company has plans to expand into the remaining states as well as grow existing markets.

Family and Friends Were First Customers

Debbie Shwetz and Dena Tripp started out baking in their kitchens for family and friends in 1997, but the co-founders realized there was a market for creative commercial cakes with the fresh ingredients we associate with a family kitchen.

“We realized Nothing Bundt Cakes had the potential to grow beyond our hometown and began developing our franchise program,” co-founder Debbie Shwetz told the Las Vegas Eater in September 2014. “Within a year, our first franchise-owned bakery opened in California, and we’ve grown ever since on the strength of the concept, the quality of the product and the passion of the people in each of our bakeries nationwide.”

The Las Vegas-based company is privately owned, with all but two locations owned by franchisees. The corporate locations are both in Las Vegas. Franchising began in 2006.

Among the company’s franchisees is Craig Moore, former president of CiCi’s Pizza, who joined the Nothing Bundt Cakes team after retiring from CiCi’s in 2009. Moore liked the company so much he not only bought a franchise, he also became an investor. He completed a (nearly) five-year commitment as president in September 2014 and is now partner and chairman. He and his wife, Wendy, own seven Nothing Bundt Cakes bakeries.

All About That Bundt

Bundt cakes are available in full-sized cakes, single servings (Bundtlets) and bite-sized morsels (Bundtinis). The Bundtlets can be purchased in towers or in a bundle of a dozen in a bakery box.

The cakes are known for the thick petals of frosting on each cake, but customers can opt for drizzle frosting for a lighter cake. A range of tempting flavors includes pecan praline, red velvet, carrot and chocolate chocolate chip, with holiday flavors available such as the fall pumpkin spice flavor.

Customers can choose specially decorated cakes for birthdays, celebrations, graduations and holidays, as well as love, get-well, cheer, thanks, “thinking of you” and “you rock!” messages.

Social Media Marketing, Engagement Is Key for Company

Nothing Bundt Cakes relies heavily on social media to connect with the public. The company’s Facebook page, for example, is peppered with engaging, upbeat posts that generate response from fans.

“We’re lucky because we’re involved in fun events and celebrations that guests already like to talk about,” Nothing Bundt Cakes Director of Marketing Donnie Robertson told Entrepreneur for an article on franchising and social media.

“We’re very privileged to be a part of those conversations,” Robertson said. “So we pay close attention to the quality of our posts and make sure we’re listening to our guests and talking about what they want to talk about, not just our products. We’ll give them recipes that complement our cakes, or put up some humor. We love to laugh; they love to laugh. We create loyalty by listening and talking about things that matter.”

Section II – Estimated Costs

  • Please click here for detailed estimates of Nothing Bundt Cakes franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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