Business models / Bakery / Own a franchise

A bakery franchise, or your own?

Ten franchise brands run a bakery. Here they are beside the independent version of the same business, with each brand’s fees as it publishes them and worked out in dollars. A brand can bring customers an independent has to earn one by one. The question is whether it brings in more than it costs.

Typical for a bakery: $300k to $950k in sales, and the owner keeps 15% to 22% after paying for its own marketing. Change either to your own numbers.

How the two sides are counted

  • Sales. A brand’s name brings customers an independent wins one at a time, so each brand is worked out at the sales it reports where we have them, and at yours where we don’t.
  • Marketing. On your own you pay for all of it, about 3% of sales here (the SBA’s usual range for ongoing marketing). The ad fund does part of that job, so it is counted once, not twice.
  • Survival. New franchised businesses were about 5 to 6 points more likely to make it through their first two years in Census data, and about half of all new businesses close within five years. It is not in the dollars; each brand’s details give the sources.

Your own bakery and each brand, side by side

The independent version

Your own bakery

Built and run under your own name

Cost to open
$140k to $783k
Annual sales
$530ktypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$100,700
The owner keeps in a year, after about $16k of marketing
Taking new owners

The Peach Cobbler Factory

Cobblers and desserts

Total investment
$157k to $458k
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
6% + 1% of sales
$69k
The owner keeps in a year at $530k in sales (your sales), after $37k to the brand
$32k less a year than on your own
Taking new owners

Le Macaron French Pastries

Macarons and French pastries

Total investment
$164k to $452k
Avg. annual sales
Ask the brand
Franchise fee
$45k
Royalty + ad fund
6% + 1% of sales
$69k
The owner keeps in a year at $530k in sales (your sales), after $37k to the brand
$32k less a year than on your own
Taking new owners

Cinnaholic

Vegan cinnamon rolls

Total investment
$241k to $527k
Avg. annual sales
Ask the brand
Franchise fee
$40k
Royalty + ad fund
5% + 2% of sales
$74k
The owner keeps in a year at $530k in sales (your sales), after $37k to the brand
$27k less a year than on your own
Taking new owners

Cinnabon

Cinnamon rolls

Total investment
$257k to $704k
Avg. annual sales
Franchise fee
$36k
Royalty + ad fund
6% + 4% of sales
$64k
The owner keeps in a year at $530k in sales (your sales), after $53k to the brand
$37k less a year than on your own
Taking new owners

Mrs. Fields

Cookies

Total investment
$312k to $496k
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
6% + 3% of sales
$69k
The owner keeps in a year at $530k in sales (your sales), after $48k to the brand
$32k less a year than on your own
Taking new owners

Parlor Doughnuts

Layered doughnuts

Total investment
$437k to $762k
Avg. annual sales
Ask the brand
Franchise fee
$40k
Royalty + ad fund
5% + 1% of sales
$74k
The owner keeps in a year at $530k in sales (your sales), after $32k to the brand
$27k less a year than on your own
Taking new owners

Shipley Do-Nuts

Donuts and kolaches

Total investment
$503k to $1M
Avg. annual sales
Ask the brand
Franchise fee
$40k
Royalty + ad fund
5% + 1% of sales
$74k
The owner keeps in a year at $530k in sales (your sales), after $32k to the brand
$27k less a year than on your own
Taking new owners

Duck Donuts

Made-to-order donuts

Total investment
$515k to $737k
Avg. annual sales
Ask the brand
Franchise fee
$40k
Royalty + ad fund
6% + 2% of sales
$69k
The owner keeps in a year at $530k in sales (your sales), after $42k to the brand
$32k less a year than on your own
Taking new owners

Nothing Bundt Cakes

Bundt cakes

Total investment
$667k to $1M
Avg. annual sales
Franchise fee
$45k
Royalty + ad fund
6% + 5% of sales
$58k
The owner keeps in a year at $530k in sales (your sales), after $58k to the brand
$42k less a year than on your own
Selective

Crumbl

Cookies

Owner-operators, many territories already taken

Total investment
$849k to $1.5M
Avg. annual sales
Franchise fee
$50k
Royalty + ad fund
8% + 2% of sales
$58k
The owner keeps in a year at $530k in sales (your sales), after $53k to the brand
$42k less a year than on your own
Free account

See all 10 bakery brands side by side

  • Every brand’s investment and fees, and what the owner keeps against running your own
  • The yearly sales the first 3 report, and a plus to add brands to your comparison and benchmark them in your account
  • Members see the sales every franchisor reports, for every brand

Free, no card. A new account accepts the Terms and the Privacy Policy. smbnest is a self-assessment tool and never takes a cut of your deal or a fee from a franchisor.

Before you sign: what to read in the disclosure document

Every franchisor must give you its Franchise Disclosure Document at least 14 days before you sign or pay. These are the parts that answer the questions above.

  • Items 5 to 7, the fees and the investment. The franchise fee, every other fee (technology, training, transfer, renewal), and the full opening budget, including working capital.
  • Item 19, what owners earn. Whether the brand states owner sales or earnings at all, and for which units. Put its figures in the boxes above in place of the typical ones.
  • Item 20, units opened, closed and sold. How many owners left in each of the last three years, and a list of current and former owners you can call.
  • Item 12, the territory. Whether you get a protected area, and what the brand can open or sell inside it.
  • Item 21, the franchisor’s own finances. Whether the company behind the brand is in good health.

smbnest is a self-assessment tool, not individualized advice. Fees are as each brand publishes them on its franchising page and in its disclosure document, reviewed in the month shown, and change; the figures in dollars are worked out at the sales you enter and are not a forecast. We never take a cut of your deal or a fee from a franchisor. Before you sign, speak with a franchise attorney and a qualified financial adviser, and call owners from the disclosure document.