Nothing Bundt Cakes Franchise: Average Sales ($1.43M) vs. Cost ($551K-$978K)

Section I – Estimated initial investment (franchise costs) for a Nothing Bundt Cakes franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Nothing Bundt Cakes franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Nothing Bundt Cakes outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Nothing Bundt Cakes franchise opportunity

Section V – Presentation and analysis of Nothing Bundt Cakes’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, highest, and lowest net revenues, average square feet, average ticket, average eClub members, average online percentage, and percentage of bakeries open 7 days for the top 1/3, mid 1/3, bottom 1/3, and all 360 franchised Nothing Bundt Cakes bakeries that have been operating for at least 24 months as of the end of Nothing Bundt Cakes’ fiscal year 2022 (December 27, 2021 through December 25, 2022)

• 2022 average net revenues, cost of goods sold, gross profit, variable expenses (labor, professional fees, delivery, travel, office, miscellaneous, other variable expenses), fixed expenses (occupancy, utilities, other fixed expenses), royalty and marketing fees, and 4-wall EBITDA achieved by the 294 franchised Nothing Bundt Cakes bakeries that have been operating for at least 24 months as of fiscal year-end 2022 and provided Nothing Bundt Cakes with complete and reliable 2022 financial statements

• first 4 years of average, median, highest, and lowest net revenues for the franchised Nothing Bundt Cakes bakeries opened during the period from January 1, 2018 to December 31, 2021

Section VI – Key ratios, comparables, computations, and analyses for the Nothing Bundt Cakes franchise opportunity (exclusive content for Platinum subscribers)

Section I – Nothing Bundt Cakes Franchise Costs

• Nothing Bundt Cakes franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $35,000
• Extension Fee:  $0 to 70% of Nothing Bundt Cakes’ then-current initial franchise fee
• Rent and Security Deposit:  $6,500 to $8,500
• Bakery Improvements:  $197,500 to $364,510
• Architect – Design:  $8,000 to $15,500
• Fixtures and Equipment – Front of Bakery:  $18,000 to $72,500
• Fixtures and Equipment – Back of Bakery:  $123,000 to $227,000
• Exterior Signage:  $6,500 to $38,000
• Initial Inventory:  $20,100 to $24,000
• Point of Sale System:  $6,000 to $11,300
• Insurance:  $2,800 to $5,500
• Business License and Permits:  $1,500 to $4,500
• Professional Fees:  $3,900 to $11,200
• Opening Advertising Program:  $10,000 to $15,000
• Training Expenses:  $4,000 to $7,000
• Delivery Vehicle – Monthly Lease or Loan Payment:  $18,500 to $33,200
• Additional Funds – 3 Months:  $30,000 to $45,000
• Total Estimated Nothing Bundt Cakes Franchise Costs:  $551,300 to $978,210

Section II – Nothing Bundt Cakes’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Nothing Bundt Cakes’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $35,000
• Royalty:  6% of Bakery’s weekly Net Revenues
• Marketing Production Fund (the “Production Fund”):  combined contributions made by you for the Production Fund and the Paid Media Fund will be 5% of your weekly Net Revenues
• Paid Media Fund (the “Media Fund”):  combined contributions made by you for the Media Fund and the Production Fund will be 5% of your weekly Net Revenues
• Local Cooperative Fund:  if Nothing Bundt Cakes designates a Cooperative Fund for your Territory, you must participate in the Cooperative Fund, and your contributions will be credited towards your Production Fund contribution requirements

Section III – Number of Franchised and Company-Owned Nothing Bundt Cakes Outlets

Franchised

2020

• Outlets at the Start of the Year:  318
• Outlets at the End of the Year:  362
• Net Change:  +44

2021

• Outlets at the Start of the Year:  362
• Outlets at the End of the Year:  408
• Net Change:  +46

2022

• Outlets at the Start of the Year:  408
• Outlets at the End of the Year:  459
• Net Change:  +51

Company-Owned

2020

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  14
• Net Change:  +1

2021

• Outlets at the Start of the Year:  14
• Outlets at the End of the Year:  16
• Net Change:  +2

2022

• Outlets at the Start of the Year:  16
• Outlets at the End of the Year:  16
• Net Change:  0

Section IV – News Updates on the Nothing Bundt Cakes Franchise

• Nothing Bundt Cakes Celebrates Sweet Milestone with 500th Bakery Opening

• Nothing Bundt Cakes Names New Chief Development Officer

• Nothing Bundt Cakes Celebrates Grand Opening with Several Sweet Events This Week

• Nothing Bundt Cakes Franchisee Selected as Franchisee of the Year by IFA

• Nothing Bundt Cakes Ranked No. 53 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Nothing Bundt Cakes Franchise (Item 19, 2023 FDD)

• As of December 25, 2022, Nothing Bundt Cakes had 459 franchised Bakeries open and operating in the United States.

• Nothing Bundt Cakes has not audited or independently verified the data submitted by the franchised Bakeries included in these financial performance representations and no assurance can be offered that the data does not contain inaccuracies that an audit might disclose.

• The franchised Bakeries that are the subject of this financial performance representation operate in metropolitan and suburban locations within all U.S. states other than Alaska, Hawaii, New Hampshire, Rhode Island, Vermont, West Virginia, and Wyoming.

• None of the financial performance representations considered the financial results of Bakeries operated by Nothing Bundt Cakes’ affiliates.

Part 1 – Franchised Bakeries’ Average Net Revenues and KPI’s

• Part 1 below sets forth the Net Revenues and certain Key Performance Indicators (KPI’s) from Nothing Bundt Cakes’ fiscal year 2022, December 27, 2021, through December 25, 2022 (“FY 2022”) for 360 franchised Bakeries, all of which have been operating for at least 24 months as of the end of Nothing Bundt Cakes’ FY 2022 (“FYE 2022”).

• This analysis excludes 97 franchised Bakeries which opened during 2021 and 2022 and thus were not open and operating for at least 2 years as of FYE 2022. There were no franchised Bakeries operating for at least 24 months as of FYE 2022 which were excluded from this analysis for any reason.

• The 360 franchised Bakeries had operated for an average of 6.4 years as of FYE 2022.

• For purposes of this Part 1, “Net Revenues” includes all revenues generated from all business conducted at or from a Bakery during FY 2022, including amounts received from the sale, shipping and delivery of food items, amounts received through the E-Commerce program and from gift card sales, and other products and services, merchandise, and tangible property of any nature whatsoever, whether in cash or for credit, and whether collected or not collected.

• “Net Revenues” does not include the amount of any applicable sales tax imposed by any federal, state, municipal, or other governmental authority if such taxes are stated separately when the Guest is charged, and franchisee pays such amounts as and when due to the appropriate taxing authority.

• Also excluded from Net Revenues are the amount of any documented refunds, chargebacks, credits, and allowances given to Guests in good faith pursuant to Nothing Bundt Cakes’ standard procedures for issuing such refunds.

Top 1/3

• Number of Bakeries:  120
• Average Net Revenues:  $2,013,739
• Average Square Feet:  1,982
• Average Ticket:  $27.45
• Average eClub Members:  28,067
• Average Online %:  31.9%
• % of Bakeries Open 7 Days:  39%
• Lowest Net Revenues:  $1,569,199
• Highest Net Revenues:  $3,514,478
• Median Net Revenues:  $1,887,817
• Number and Percentage That Met or Exceeded Average:  48 / 40%

Mid 1/3

• Number of Bakeries:  120
• Average Net Revenues:  $1,354,029
• Average Square Feet:  1,995
• Average Ticket:  $26.61
• Average eClub Members:  17,528
• Average Online %:  29.8%
• % of Bakeries Open 7 Days:  33%
• Lowest Net Revenues:  $1,177,452
• Highest Net Revenues:  $1,568,666
• Median Net Revenues:  $1,342,656
• Number and Percentage That Met or Exceeded Average:  57 / 48%

Bottom 1/3

• Number of Bakeries:  120
• Average Net Revenues:  $941,355
• Average Square Feet:  2,039
• Average Ticket:  $26.07
• Average eClub Members:  11,673
• Average Online %:  29.4%
• % of Bakeries Open 7 Days:  27%
• Lowest Net Revenues:  $556,598
• Highest Net Revenues:  $1,176,886
• Median Net Revenues:  $974,477
• Number and Percentage That Met or Exceeded Average:  66 / 55%

Average for All Bakeries

• Number of Bakeries:  360
• Average Net Revenues:  $1,436,375
• Average Square Feet:  2,007
• Average Ticket:  $26.71
• Average eClub Members:  19,089
• Average Online %:  30.7%
• % of Bakeries Open 7 Days:  33%

• The 46 franchised Bakeries that opened in 2021 and had 1 full year of operation during FY 2022, had average Net Revenues of $930,626, a high Net Revenue of $1,595,443, a low Net Revenue of $505,670, a median Net Revenue of $891,425, and 18 (39%) Bakeries met or exceeded the average Net Revenues.

• Average Square Feet measures the average square footage of the Bakeries in each of the three groups shown above.

• Average Ticket is total Net Revenues divided by the total tickets for the Bakeries in each of the three groups shown above.

• Average eClub Members is the count of total valid email addresses of customers who have signed up for the Nothing Bundt Cakes loyalty program.

• Average Online % is total Net Revenues derived from Nothing Bundt Cakes’ website and 3PD partners divided by the Bakery’s total Net Revenues.

• % of Bakeries Open 7 Days is the percentage of Bakeries in each of the three groups who are open 7 days/week.

Part 2 – Net Revenues and Costs Analysis

• Part 2 of Item 19 sets forth average Net Revenues, average cost of goods sold, average gross margin, average payroll costs, average occupancy expenses, average advertising expenses, average other expenses, and average 4-Wall EBITDA achieved by 294 franchised Bakeries for FY 2022, all of which have been operating for at least 24 months as of FYE 2022.

• The total number of franchised Bakeries operating as of FYE 2022 was 459; however, Nothing Bundt Cakes received P&L’s for FY 2022 only from a total of 414 franchised Bakeries. From the 414 Bakeries, Nothing Bundt Cakes excluded 120 franchised Bakeries for the following reasons:

• (i) 48 franchised Bakeries did not submit full year P&L’s for FY 2022;
• (ii) 46 franchised Bakeries had been operating for less than 24 months as of FYE 2022; and
• (iii) 26 franchised Bakeries submitted P&L information with Net Revenues either more or less than 10% of the Net Revenue data Nothing Bundt Cakes collects separately through its point-of-sale (“POS”) system – these franchised Bakeries had average Net Revenue on their P&L statements of $2,384,761 versus Nothing Bundt Cakes’ POS Net Revenue data of $1,490,583. As a result, Nothing Bundt Cakes assumed the data from these franchised Bakeries was incorrect and needed to be excluded from this analysis.

• The 294 franchised Bakeries had operated for an average of 6.1 years as of FY 2022.

Average (294 Bakeries)

Net Revenues:  $1,441,524 (100.0%)

Cost of Goods Sold:  $358,801 (24.9%)

Gross Profit:  $1,082,722 (75.1%)

Variable Expenses

• Labor:  $398,061 (27.6%)
• Professional Fees:  $12,023 (0.8%)
• Delivery:  $13,378 (0.9%)
• Travel:  $8,166 (0.6%)
• Office:  $9,333 (0.6%)
• Miscellaneous:  $3,357 (0.2%)
• Other Variable Expenses:  $60,464 (4.2%)
• Total Variable Expenses:  $504,781 (35.0%)

Fixed Expenses

• Occupancy:  $83,370 (5.8%)
• Utilities:  $19,336 (1.3%)
• Other Fixed Expenses:  $18,543 (1.3%)
• Total Fixed Expenses:  $121,249 (8.4%)

Royalty and Marketing Fees:  $158,568 (11.0%)

4-Wall EBITDA:  $298,124 (20.7%)

• “Net Revenues” is same definition as above.

• “COGS” is defined as all direct costs including dry ingredients, packaging, and decorating costs.

• “Gross Profit” is defined as Net Revenues less COGS.

• “Labor” is defined as the cost of hourly employees, manager salary, bonus payments, 401k and other benefits, health insurance, workers comp, payroll tax, outside employment services, staff meetings, and employee related expenses. It excludes owner salary or draw from 172 Bakeries that reported owner payroll (“Owner Payroll”) and adjusts to remove estimated owner payroll within the remaining 122 Bakeries that did not report Owner Payroll.

• “Professional Fees” is defined by all accounting, legal, and consulting fees.

• “Delivery” is defined as all expenses related to automotive and delivery services, including gas, vehicle insurance, registration, repairs and maintenance, toll fees, outside delivery services, and shipping expenses.

• “Travel” includes expenses for airfare, car rental, convention cost, fuel, lodging, meals and entertainment, and parking.

• “Office” includes expenses related to office supplies, postage, printing and reproduction, and computer and internet expenses.

• “Miscellaneous” includes expenses related to cash over and short, reconciliations discrepancies, charitable contributions, and continuing education.

• “Other Variable” includes expense related to bank and credit card merchant fees, kitchen supplies, repair and maintenance for equipment, security, store supplies, and uniforms and linens.

• “Occupancy” is defined as all charges imposed under the lease agreements, including base rent, percentage rent, property tax, CAM charges, any storage rent, and any pest control.

• “Utilities” is defined by all expenses related to electric, gas, telephone, trash, and water.

• “Other Fixed Expenses” is defined by all expenses related to business licenses and permits, dues and subscriptions, property and liability insurance, and any lease costs for equipment.

• “Royalty and Marketing” expenses were adjusted to equal 6% of Net Revenues to account for Royalty fee percentage plus 5% of Net Revenues to account for all Marketing contributions. The total Royalty and Marketing fees and contributions equals 11% of Net Revenues in this analysis.

• “4-Wall EBITDA” is defined as Gross Profit less all expenses defined above. 4-Wall EBITDA excludes the following: Consulting Fees, Taxes, Interest Income, Sales Tax Collected, Other Income, Ask My Accounting fees, Other Expenses related to Other Income, Interest Expense, Depreciation, and Amortization.

Part 3 – New Bakery Sales

• Part 3 of this Item 19 represents the first 4 years of sales performance for the franchised Bakeries opened during the period from January 1, 2018, to December 31, 2021.

• Year 1 includes the 183 Bakeries that were open for a full 1-year period by December 31, 2022. Year 2 excludes 47 Bakeries that were not open a full 2-year period by December 31, 2021. Year 3 excludes 92 Bakeries that were not open a full 3-year period by December 31, 2021. Year 4 excludes 141 units that were not open for a full 4-year period by December 31, 2021.

• All Net Revenue figures are in thousands.

Year 1

• Number of Bakeries:  183
• Average Net Revenues:  $904
• Median Net Revenues:  $861
• Lowest Net Revenues:  $378
• Highest Net Revenues:  $1,987
• Number and Percentage That Met or Exceeded Average:  80 / 44%

Year 2

• Number of Bakeries:  136
• Average Net Revenues:  $1,013
• Median Net Revenues:  $962
• Lowest Net Revenues:  $429
• Highest Net Revenues:  $2,275
• Number and Percentage That Met or Exceeded Average:  62 / 46%

Year 3

• Number of Bakeries:  91
• Average Net Revenues:  $1,164
• Median Net Revenues:  $1,121
• Lowest Net Revenues:  $560
• Highest Net Revenues:  $2,058
• Number and Percentage That Met or Exceeded Average:  44 / 48%

Year 4

• Number of Bakeries:  42
• Average Net Revenues:  $1,360
• Median Net Revenues:  $1,263
• Lowest Net Revenues:  $720
• Highest Net Revenues:  $2,270
• Number and Percentage That Met or Exceeded Average:  19 / 45%

• Some Bakeries have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Section VI – Nothing Bundt Cakes Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️