Nothing Bundt Cakes Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

• Unless otherwise noted, all amounts listed below are non-refundable. The franchisor does not finance any portion of your initial investment.

1.  Initial Franchise Fee:  $35,000

2.  Extension Fee:  $0 to $10,000

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

• Each Bakery location will occupy approximately 2,000 square feet of space. Your rent will depend on geographic location, the Bakery’s size, local rental rates, businesses in the area, site profile and desirability, and other factors.

• 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 location should have adequate facilities to bake, store, and prepare your products and their ingredients and to service your walk-in Guests. The location should be visible, accessible to prospective Guests, and conveniently located to make deliveries in your Territory.

• 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:  $175,000 to $285,000

• The leasehold improvement ranges will be affected by various factors, such as the location of the Bakery and local market conditions. Your actual costs may or may not include site preparation, demising walls, and utility extensions, depending on the arrangements you negotiate with your landlord.

• The estimates assume that the landlord will provide connections to adequate electrical, gas, water, and sewage service.

• Some landlords are willing to contribute toward the cost of finish-out, which reduces the overall leasehold improvements costs.

• Bakery improvement costs, including a modified, above-ground grease trap, electrical, carpentry, and similar work, and contractor’s fees, depend on: the Bakery’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; the build-out required to conform the site for your Bakery; and any construction or other allowances the landlord grants.

• 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. Also, if these costs may be negotiated, you may further reduce your costs.

5.  Architect – Design:  $9,800 to $12,500

• 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:  $33,500 to $40,000

• 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:  $124,000 to $145,000

• 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:  $8,000 to $12,000

• 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.

• The franchisor will provide you with a list of approved sign manufacturers, suppliers, and distributors that comply with its brand specifications.

9.  Initial Inventory:  $20,100 to $24,000

• This estimated amount includes cake design accessories, dry cake mix ingredients, smallwares, and other supplies that are distributed through the franchisor’s affiliate, NBC 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:  $6,000 to $11,300

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

11.  Insurance:  $2,800 to $5,500

• These amounts reflect potential monthly costs.

• You must obtain and maintain certain types and amounts of insurance. Insurance costs depend on policy limits, types of policies, nature and value of physical assets, gross revenue, number of employees, square footage, location, business contents, and other factors bearing on risk exposure.

• Insurance costs may be substantially higher in areas of the country subject to natural disasters, like hurricanes. The franchisor recommends that you check on insurance rates in your area before you sign the lease for your Bakery.

12.  Business License and Permits:  $1,500 to $4,500

• These are general estimates for permits and licensing that may be required by local and state governments. Local, municipal, county, and state regulations vary on the licenses and permits you will need to operate a Nothing Bundt Cakes Bakery. You will pay these fees to governmental authorities before starting business.

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.

• Your actual costs may vary substantially, for example, depending on the degree to which you rely upon your advisors and upon the licensing requirements that may apply to your Bakery.

14.  Opening Advertising Program:  $5,000 to $10,000

• 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 not later than 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 an additional $5,000 on your Opening Advertising Program.

• 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 $7,000

• 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.

• The low estimate assumes that the trainees are within driving distance to the training location and don’t require a wage. The high estimate assumes that other travel will be needed, and includes travel expenses, although these may vary significantly depending upon factors such as the distance traveled and mode of transportation.

• Your costs will also vary depending on the nature and style of accommodations, and the number of persons who will attend training.

16.  Delivery Vehicle – Monthly Lease or Loan Payment:  $18,500 to $33,200

• You may be required to obtain a vehicle dedicated to making deliveries for your Bakery. The franchisor reserves the right to prescribe standards and specifications for delivery vehicles used in the operation of the Bakery including mandating that the vehicle be decorated with Nothing Bundt Cakes’ designated vehicle wrap.

• The range listed above includes an estimated total purchase of the vehicle ranging from $10,000 to $30,000 depending on which type of vehicle you choose, plus a full vehicle wrap costing approximately $3,200. Third-party financing is available. Additionally, the franchisor offers a partial wrap option which costs between $1,850 and $2,200.

• You may use your existing vehicle if it meets the franchisor’s standards for Bakery deliveries, in which event you will only need to purchase a full or partial vehicle wrap.

17.  Additional Funds – 3 Months:  $30,000 to $45,000

• 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 ongoing fees, and some system maintenance costs. These expenses include payroll costs but not any draw or salary for you.

18.  Total Estimated Initial Investment:  $483,600 to $699,700

• The franchisor relied on the experience of NBC, the former franchisor of Nothing Bundt Cakes franchises, in offering and selling franchises since 2006, as well as the franchisor’s experience since becoming the franchisor in July 2021, in developing these estimates and information provided to the franchisor by its franchisees.

• An estimated initial investment will be incurred for each Bakery established under a Development Rights Rider.