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Breadsmith Franchise Cost & Fees

Date Incorporation: 1993

Franchising Since:  1993

Headquarters: Wisconsin

Description: Bread Smith operates a "bread company" that operates retail stores and develops and services bulk and wholesale bread accounts. Bread Smith bakeries feature a wide assortment of premium quality fresh, hearth baked breads, hearth baked products, food products, and other complementary items.

Franchise Offer: The franchise offered is to operate one or more premium European-style bread stores in a specific territory and to sell breads to bulk and wholesale accounts in that territory. Franchisees will sell only the highest-quality baked goods using BFI-taught baking processes in an efficient open-kitchen concept, with a generous sampling program in the store.

Financial Assistance: The franchisor does not offer direct or indirect financing nor do they guarantee any note, lease or other obligation.

Training and Assistance: The franchisor will provide an initial training program to the franchisee and one other employee or representative of the Bread Smith franchise. Training includes 3 weeks of ‘on-the-job’ and classroom training at a Bread Smith bakery in the Milwaukee, Wisconsin metropolitan area. There is no cost for this training, but the franchisee must pay for travel and living expenses incurred in attending the training. The franchisee must attend and satisfactorily complete this initial training before opening their Bread Smith bakery.

Territory: The franchisor will designate a nonexclusive search area in which the franchisee may locate the Bread Smith store. The search area is usually a portion of a county, but the franchisee does not have any exclusive right in this search area. The franchisor has the right to offer other franchises, open company-owned stores, and solicit bulk and wholesale accounts in that area.

Term of Agreement and Renewal: The length of the franchise term is 15 years and the franchisee may renew for additional terms of 15 years each, provided they have complied with all the terms and conditions of the Franchise Agreement

Obligations and Restrictions: It is not required that the franchisee personally manage the store but they must appoint a full time manager, who has completed the initial training program, and will devote full-time efforts to the supervision of the Bread Smith business. 

Total Number of Units: 3433 outlets at the end of 2007

Total Number of franchises Units: 3332 franchised outlets at the end of 2007

Investment Tables:

Initial Investment:
Expenditures Low High
Initial Franchise Development Fee $30,000 $30,000
Equipment and small wares  $107,000 $115,000
Leasehold Improvements and Fixtures  $79,000 $100,000
Opening Inventory $4,000 $7,000
Signage $3,500 $7,500
Security Deposits $2,000 $6,000
Promotion $3,500 $7,500
Pre-Opening Training $4,000 $6,000
Miscellaneous (legal, insurance, permits, office supplies, tools, etc.) $1,500 $10,000
Additional Funds (6mos.) $4,000 $30,000
TOTAL $238,500 $317,000

 Ongoing fees:

Name of Fee Amount
Royalty 5%-7% of total gross Receipts
Transfer Fee $5,000
Training Fee $2,500
Renewal Fee $500
Equipment Maintenance Fee/Spare Part charge Will vary under circumstances
Email Club Participation Fee $150 start-up fee plus base fee of $100 per month depending upon participation level. An additional $20 per email for emails containing customized graphics. $25 fee for any NSF transaction.
Manager Training $100 per day
Additional Training/On-Site Assistance Cost of lodging, meals, transportation, plus daily fee.
Late Payment Charges 1 1/2% per month on unpaid balances.
Late Report Charges $100
Standards Non-Compliance Late Fee $500
Supplier Investigation Fee Currently, $250 per request.
Audit Expenses Cost of audit.
Costs and Attorneys' Fees Will vary under circumstances.
Indemnification Will vary under circumstances.

Date of FDD: 27/03/2008

 The above information has been taken from the UFOC/FDD of Breadsmith

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