In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Nothing Bundt Cakes franchise, based on Item 7 of the company’s 2024 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 2024 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 2021, 2022, and 2023, based on Item 20 of the company’s 2024 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 2024 FDD, including information on the:

• 2023 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 424 franchised Nothing Bundt Cakes bakeries that have been operating for at least two full fiscal years, equating to 24 fiscal months as of the end of Nothing Bundt Cakes’ FY 2023 (December 26, 2022, through December 31, 2023)

• 2023 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 291 franchised Nothing Bundt Cakes bakeries that have been operating for at least 24 months as of fiscal year-end 2023 and provided Nothing Bundt Cakes with complete and reliable 2023 financial statements

• first 5 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, 2022

• average, median, highest, and lowest net revenues for the year before and year after resale for the 40 franchised Nothing Bundt Cakes bakeries that were transferred via a resale to both existing Nothing Bundt Cakes franchisees and new franchisees to the Nothing Bundt Cakes system during the period between January 1, 2020, and December 31, 2022

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

• Initial Franchise Fee:  $45,000
• Rent and Security Deposit:  $6,500 to $8,500
• Bakery Improvements:  $191,950 to $454,667
• Architect – Design:  $7,663 to $15,223
• Fixtures and Equipment – Front and Back of Bakery:  $193,002 to $367,811
• Exterior Signage:  $10,700 to $30,000
• Initial Inventory:  $15,000 to $23,000
• 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:  $4,000 to $7,000
• Training Expenses:  $3,500 to $10,000
• Delivery Vehicle – Monthly Lease or Loan Payment:  $18,500 to $32,300
• Additional Funds – 3 Months:  $75,000
• Total Estimated Nothing Bundt Cakes Franchise Costs:  $585,015 to $1,101,001

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

• Initial Franchise Fee:  $45,000
• 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

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

2023

• Outlets at the Start of the Year:  459
• Outlets at the End of the Year:  542
• Net Change:  +83

Company-Owned

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

2023

• Outlets at the Start of the Year:  16
• Outlets at the End of the Year:  17
• Net Change:  +1

Section IV – News Updates on the Nothing Bundt Cakes Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Nothing Bundt Cakes Franchise (Item 19, 2024 FDD)

• As of December 31, 2023, Nothing Bundt Cakes had 559 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 2023, December 26, 2022, through December 31, 2023 (“FY 2023”) for 424 franchised Bakeries, all of which have been operating for at least two full fiscal years, equating to 24 fiscal months as of the end of Nothing Bundt Cakes’ FY 2023 (“FYE 2023”).

• A typical fiscal year represents 364 days (7 days across 52 weeks). However, every 6-7 years an extra fiscal week is required to ensure year-over-year calendar week comparisons do not move beyond a 7-day shift. In that regard, Nothing Bundt Cakes’ FY 2023 contained a 53rd week (371 days) and thus Net Revenues, Average Ticket, and Total Online % were adjusted to reflect a 52-week performance estimate. This adjustment simply involved dividing the FY 2023 numbers by 53, then multiplying by 52.

• There were no franchised Bakeries operating for at least 24 months as of FYE 2023 which were excluded from this analysis for any reason.

• The 424 franchised Bakeries had operated for an average of 7.0 years as of FYE 2023.

• For purposes of this Part 1, “Net Revenues” includes all revenues generated from all business conducted at or from a Bakery during FY 2023, including amounts received from the sale, shipping and delivery of food items, amounts received through the E-Commerce program and from gift card redemptions, 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:  141
• Average Net Revenues:  $2,144,086
• Average Square Feet:  1,974
• Average Ticket:  $27.61
• Average eClub Members:  31,219
• Average Online %:  35.2%
• % of Bakeries Open 7 Days:  55%
• Lowest Net Revenues:  $1,661,414
• Highest Net Revenues:  $3,787,195
• Median Net Revenues:  $2,020,106
• Number and Percentage That Met or Exceeded Average:   55 / 39%

Mid 1/3

• Number of Bakeries:  142
• Average Net Revenues:  $1,418,254
• Average Square Feet:  2,005
• Average Ticket:  $27.15
• Average eClub Members:  18,981
• Average Online %:  33.2%
• % of Bakeries Open 7 Days:  49%
• Lowest Net Revenues:  $1,203,027
• Highest Net Revenues:  $1,661,127
• Median Net Revenues:  $1,404,118
• Number and Percentage That Met or Exceeded Average:   70 / 49%

Bottom 1/3

• Number of Bakeries:  141
• Average Net Revenues:  $978,261
• Average Square Feet:  2,077
• Average Ticket:  $25.70
• Average eClub Members:  11,708
• Average Online %:  30.9%
• % of Bakeries Open 7 Days:  43%
• Lowest Net Revenues:  $534,497
• Highest Net Revenues:  $1,202,276
• Median Net Revenues:  $1,012,062
• Number and Percentage That Met or Exceeded Average:   81 / 57%

Average for All Bakeries

• Number of Bakeries:  424
• Average Net Revenues:  $1,513,309
• Average Square Feet:  2,061
• Average Ticket:  $27.03
• Average eClub Members:  20,632
• Average Online %:  33.7%
• % of Bakeries Open 7 Days:  49%

• The 51 franchised Bakeries that opened in 2022 and had 1 full year of operation during FY 2023, had average Net Revenues of $1,133,559, a high Net Revenue of $2,110,983, a low Net Revenue of $692,012, a median Net Revenue of $1,055,349, and 21 (41%) 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 291 franchised Bakeries for FY 2023, all of which have been operating for at least 24 months as of FYE 2023.

• The total number of franchised Bakeries operating as of FYE 2023 was 559; however, Nothing Bundt Cakes received P&L’s for FY 2023 only from a total of 414 franchised Bakeries. From the 414 Bakeries, Nothing Bundt Cakes excluded 123 franchised Bakeries for the following reasons:

• (i) 94 franchised Bakeries did not submit full year P&L’s for FY 2023;
• (ii) 20 franchised Bakeries had been operating for less than 24 months as of FYE 2023; and
• (iii) 9 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.

• The 291 franchised Bakeries had operated for an average of 6.5 years as of FY 2023.

Average (291 Bakeries)

Net Revenues:  $1,479,065 (100.0%)

Cost of Goods Sold:  $358,642 (24.2%)

Gross Profit:  $1,120,422 (75.8%)

Variable Expenses

• Labor:  $399,294 (27.0%)
• Professional Fees:  $9,675 (0.7%)
• Delivery:  $13,296 (0.9%)
• Travel:  $7,779 (0.5%)
• Office:  $8,638 (0.6%)
• Miscellaneous:  $3,724 (0.3%)
• Other Variable Expenses:  $64,320 (4.3%)
• Total Variable Expenses:  $506,725 (34.3%)

Fixed Expenses

• Occupancy:  $85,569 (5.8%)
• Utilities:  $19,356 (1.3%)
• Other Fixed Expenses:  $18,550 (1.3%)
• Total Fixed Expenses:  $123,475 (8.3%)

Royalty and Marketing Fees:  $162,697 (11.0%)

4-Wall EBITDA:  $327,526 (22.1%)

• “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 187 Bakeries that reported owner payroll (“Owner Payroll”) and adjusts to remove estimated owner payroll within the remaining 104 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, 2023.

• Year 1 includes the 234 Bakeries that were open for a full 1-year period by December 31, 2023. Year 2 excludes 49 Bakeries that were not open a full 2-year period by December 31, 2023. Year 3 excludes 98 Bakeries that were not open a full 3-year period by December 31, 2023. Year 4 excludes 143 units that were not open for a full 4-year period by December 31, 2023. Year 5 excludes 192 units that were not open for a full 4-year period by December 31, 2023.

• All Net Revenue figures are in thousands.

Year 1

• Number of Bakeries:  234
• Average Net Revenues:  $954
• Median Net Revenues:  $907
• Lowest Net Revenues:  $378
• Highest Net Revenues:  $2,087
• Number and Percentage That Met or Exceeded Average:  100 / 43%

Year 2

• Number of Bakeries:  185
• Average Net Revenues:  $1,017
• Median Net Revenues:  $981
• Lowest Net Revenues:  $429
• Highest Net Revenues:  $2,275
• Number and Percentage That Met or Exceeded Average:  83 / 45%

Year 3

• Number of Bakeries:  136
• Average Net Revenues:  $1,161
• Median Net Revenues:  $1,106
• Lowest Net Revenues:  $560
• Highest Net Revenues:  $2,325
• Number and Percentage That Met or Exceeded Average:  62 / 46%

Year 4

• Number of Bakeries:  91
• Average Net Revenues:  $1,249
• Median Net Revenues:  $1,178
• Lowest Net Revenues:  $604
• Highest Net Revenues:  $2,270
• Number and Percentage That Met or Exceeded Average:  39 / 43%

Year 5

• Number of Bakeries:  42
• Average Net Revenues:  $1,426
• Median Net Revenues:  $1,305
• Lowest Net Revenues:  $753
• Highest Net Revenues:  $2,365
• Number and Percentage That Met or Exceeded Average:  18 / 43%

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

Part 4 – Resale Analysis

• The purpose of this analysis is to show the impact on the Net Revenue of a franchised Bakery after the Bakery is sold to a new owner who operates the Bakery with an increased emphasis on, among other operational factors, key operational metrics and increased hours of operation.

• To be part of this analysis, the franchised Bakery had to be in operation for at least a minimum of 12 months prior to a resale transaction and in operation for at least 12 months after the resale transaction closed.

• Nothing Bundt Cakes analyzed the average Net Revenues performance for 40 franchised Bakeries that were transferred via a resale to both existing Nothing Bundt Cakes franchisees and new franchisees to the Nothing Bundt Cakes system during the period between January 1, 2020, and December 31, 2022.

• Nothing Bundt Cakes excluded from this analysis 31 resale transactions that occurred in Fiscal Year 2023 because these Bakeries did not have a full 12 months of operation after the resale transaction closed. Additionally, Nothing Bundt Cakes excluded 2 franchised Bakery resales, 1 from 2021 and 1 from 2020, that did not have a full 12 months of operation prior to the resale.

• “Year Prior” in the chart below represents the 12 full months before the resale transaction and “Year After” represents the full 12 months after the resale transaction closed. Please note that the month the resale transaction occurred was excluded from this analysis.

• Certain operational metrics (KPI’s) can impact the overall Net Revenues of a Bakery. As these resale transactions bring new operators to existing franchised Bakeries, Nothing Bundt Cakes stresses that they focus on areas like increased hours of operation, being open on Sundays, collecting more email addresses from their guests, and enrolling into the different online programs like 3PD.

Year Before

• Average Net Revenues:  $1,139
• Median Net Revenues:  $1,164
• Lowest Net Revenues:  $579
• Highest Net Revenues:  $2,020
• Number and Percentage That Met or Exceeded Average:  21 / 53%

Year After

• Average Net Revenues:  $1,281
• Median Net Revenues:  $1,281
• Lowest Net Revenues:  $665
• Highest Net Revenues:  $2,640
• Number and Percentage That Met or Exceeded Average:  20 / 50%

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