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FDD Talk 2017: What You Need to Know About the Nothing Bundt Cakes Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on July 5, 2017

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

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Nothing Bundt Cakes Photo by felsull

In this FDD Talk 2017 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 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Nothing Bundt Cakes franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Nothing Bundt Cakes’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2015 and 2016 net revenues for two Bakeries operated by Nothing Bundt Cakes’ founders in Las Vegas, Nevada (the “Founders’ Bakeries”)
  • 2016 average net revenues for 107 franchised Bakeries (“Included Franchisee Bakeries”) and 5 company-owned Bakeries (“Company-Owned Bakeries”), all of which have been operating for at least 24 months as of December 31, 2016
  • 2016 average net revenues, cost of goods sold, gross margin, payroll costs, occupancy expenses, advertising, other expenses, interest expense, depreciation and amortization, net income, and EBITDA achieved by 23 of the 107 Included Franchisee Bakeries that provided Nothing Bundt Cakes with complete 2016 financial statements prior to the issuance of the 2017 disclosure document
  • average net revenues achieved during the first and second full 12 months of business by all 34 franchised Bakeries that opened during the 2014 calendar year and have been open a minimum of 24 months as of December 31, 2016

Section I – Background Information

13 Things You Need to Know About the Nothing Bundt Cakes Franchise

Hiring of Two New Executives

1.  In early May, Nothing Bundt Cakes announced the hiring of two new executives for the brand: Steve McGehee as Chief Marketing Officer and Bill Schaffler as Chief Financial Officer. The new executives will contribute to the expansion of the company’s current footprint in the U.S. and Canada, as well as strengthen the support provided to Nothing Bundt Cakes’ current bakeries.

2.  McGehee comes to Nothing Bundt Cakes with over 20 years of experience in marketing, advertising, and the foodservice industry. In his new position as Chief Marketing Officer, McGehee will be responsible for leading the brand’s marketing vision and strategy, including planning, development, and implementation of all marketing programs.

3.  Schaffler has been a financial and operational leader in fast casual and casual dining for more than 20 years and most recently served as CFO for Newk’s Eatery and Executive Vice President & CFO at Le Duff America, parent company of La Madeleine, Bruegger’s, and Mimi’s Café brands. As the new CFO for Nothing Bundt Cakes, Schaffler will oversee financial management, business intelligence for the brand’s bakery owners, and technology innovation.

Celebrating Milestones in 2017

4.  Nothing Bundt Cakes celebrated two major milestones in early April 2017 – the 10th anniversary of its first franchised location and the opening of its 200th location in Grand Rapids, Michigan.

5.  The bundt cake company adopted a franchising model in 2007 and awarded its first franchise to Mara Fortin in Poway, California. Since then, the brand has grown to more than 200 locations across 32 states.

6.  To celebrate the opening of its 200th location, Nothing Bundt Cakes gave away free bundlets, the company’s mini bundt cakes, for a year (one per month) to the first 200 guests at the Grand Rapids location. They celebrated the opening nationwide by giving away several $200 gift cards on social media.

7.  In the press release celebrating Nothing Bundt Cakes’ milestones, the company said that it plans to open at least 40 new bakeries in 2017 as part of an aggressive growth strategy.

Acquired by Private Equity Firm

8.  In early October, Nothing Bundt Cakes announced that it had been acquired by Levine Leichtman Capital Partners (LLCP), a Los Angeles-based private equity firm. Financial terms of the transaction were not disclosed. LLCP plans to expand Nothing Bundt Cakes’ footprint and increase system-wide sales.

9.  As part of the deal, Nothing Bundt Cakes’ co-founder Dena Tripp will retain significant ownership in the company and serve as chairperson of the board of directors. Tripp says that LLCP’s expertise and resources will help the company move into its next phase of growth.

Company History

10.  Nothing Bundt Cakes was founded in 1997 by Debra Shwetz and Dena Tripp in Las Vegas, Nevada. The duo initially started out making cakes for friends and family, but interest in their cakes grew, so they turned their side project into a legitimate business.

11.  Shwetz and Tripp realized that there was demand for cakes that didn’t compromise on ingredients. So from the start, Nothing Bundt Cakes has used only the purest ingredients, such as fresh eggs, real butter, and real cream cheese.

12.  Nothing Bundt Cakes began franchising in 2007 and today there are over 200 locations in the U.S. and Canada.

Entrepreneur’s Franchise 500

13.  Even though Nothing Bundt Cakes has been franchising for over a decade, the company has yet to appear on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Nothing Bundt Cakes franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Nothing Bundt Cakes’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

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