A bakery, also called a bake shop or a bakery cafe, specializes in the baking and sale of flour-based foods baked in an oven. Delicious foods such as bread, cookies, cakes, pastries, pies, and donuts are the specialties of bakery and donut franchises. Learn more about this delectable franchise industry in the following trends and facts.
1. On average, each American consumes well over 50 pounds of bread per year. Bread and bread-products are certainly a staple of the American diet. Roll that bread into interesting shapes and sizes (bagels, rolls, buns, flatbreads, pretzels) and top with icing and sweet things (pastries, cinnamon rolls, donuts), and you have an enticing treat that will draw in many customers. That is the basis of a bakery franchise or a donut franchise.
2. In addition to their main products, bakery and donut franchises typically also serve additional items, such as coffee and tea. Perhaps even sandwiches. For this reason, many of these franchises are frequented in the mornings when Americans are on their way to work and need a coffee boost and a solid food pick-me-up to start their day.
3. You can start a bakery franchise that covers all the bases and sells general baked goods. Or you can start a bakery franchise that has a particular focus on one type of baked good. For instance, Cinnaholic and Cinnabon largely focus on gourmet cinnamon rolls; Le Macaron French Pastries distinguishes itself by focusing on its authentic French macaron; Kolache Factory has a unique focus on kolaches, a slightly sweet pastry that originated in Czechoslovakia and is traditionally filled with sausage, cheese, or fruit. There are many more unique franchise concepts to choose from.
4. Top bakery and donut franchises include Cinnabon, Auntie Anne's, Krispy Kreme Doughnuts, Einstein Bros. Bagels, Great American Cookies, and Wetzel's Pretzels.
There are very few of us who don't love a donut. Even if we only have one now and then, there's something about the indulgent badness of eating something so delicious, even though we know it will have repercussions on the waistline.
But sometimes you’ve just gotta live a little. And this is where the donut franchise market really comes into its own.
Donuts are a sweet bread accompanied by various delicious and indulgent fillings and toppings. Delicious foods, such as bread, cookies, cakes, pastries, pies, and donuts, are the specialties of bakery and donut franchises all across the land.
Owning a Bakery or Donut Franchise Can Be Sweet
According to franchise consultant Joel Libava, “Every franchise opportunity has pluses and minuses. The trick is to find a franchise opportunity that has more pluses. In addition, you need to make sure you have the financial wherewithal for the opportunity you’re looking at. And the skills required to operate it.”
When it comes to owning a food franchise in a specific area, like a bakery franchise, he says that liking the product goes a long way. “You have to like the product you’re putting out. Not necessarily eat it every day, but you have to believe in it. And you have to believe that there’s a market for it. One that’s large enough to support your business,” he says.
Here are two ways to go about finding out about the market size for your potential bakery franchise.
The first is a good ole fashioned internet search with special attention paid to your city or state. As Joel says, “Today’s search engines make that pretty easy, so start searching!”
Another way is to contact your local Small Business Development Center (SBDC). This free resource (supported mostly by the U.S. Small Business Administration), has counselors on hand who have access to both national and local market data.
Initial Investment and Opening Costs for Bakery & Donut Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements.
The opening costs for a food franchisee can depend on many factors, including but not limited to: the franchise fee, land and building costs, training expenses (such as travel and living expenses, not the actual training courses), grand opening advertising and marketing costs, and more.
One of the most important variables in how much it costs to open a franchise is the type of franchise being opened and how big it is. Commonly, the two types of food franchise offered are traditional and non-traditional. Traditional franchises are usually the biggest option. They are typically standalone buildings where the service of the franchise is the only business offering. Non-traditional franchises are smaller, and typically located within another building like airports or gas stations. Other food franchise types include kiosks, trucks, and satellites.
Franchisors offer estimates in their FDD based upon their experience establishing, and in some cases operating, units. However, prospective franchisees should keep in mind these estimates are just that—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Benefits of Being a Franchisee
The benefits of owning a franchise can be numerous vs. independent operation. Here are a few of the top benefits for those who decide to own a bakery franchise instead of going at it alone.
Name Recognition: When it comes to finding a service provider of any kind, people tend to deal with someone they have a familiarity with. Franchises tend to have established brand names that, in many instances, have been around for years. If you buy a bakery franchise, you will be given the right to associate your business with that franchise company's name, trademarks, and logo.
Advertising: Getting your name out there can be expensive and sometimes it can be hard to know where to spend your advertising and marketing budget. With a franchise, national advertising is typically done by the franchisor. In addition, though in general local advertising is up to you, you’ll have guidelines in place.
Training & Support: A popular feature with all franchises is the training provided. While in business, franchisees will have access to the franchisor’s operations manual, computer systems, and other items designed to help you successfully manage your bakery shop. Remember the franchisor can’t be successful without you!
Franchising
Franchising is a unique opportunity for anyone hoping to start up a new business; someone who lacks the experience of running their own company from scratch. With many franchises, all you need is a strong work ethic and a desire to learn and develop new skills, and your franchise parent company will take you under their wing and mold you into a donut-making expert.
Most bakery and donut franchises offer exceptional training opportunities to bring you up to expert status in the ways of the donut, especially if you're going to be baking bready goods on the premises. Your parent company often lends a hand with the complex administrative set-up, with ongoing support once you're up and running. Ask them about what they offer on top of the standard business fare.
One of the principal benefits of franchising is that your parent company comes with a ready-made reputation, as well as an established customer base. When you're starting up an independent business without the support of an established partner, many business owners struggle to draw customers away from the tried-tested and loved established donut franchises.
Franchises provide the instantly recognizable branding that will make your new business stand out from your competition. With instant curb appeal, you're literally guaranteed a customer base, keen to sample your wares.
When you invest in a bakery and donut franchise, you receive instant access to an established supply chain, giving you access to tried-and-tested ingredients at attractive prices which maximize your profit margins.
Independent companies often struggle to build a reliable supply chain due to the lack of scale enjoyed by larger organizations. So for profits and almost instant business success, a franchise could be a reliable path into starting up for yourself.
Facts About Donut and Bakery Franchises
Donut and Bakery franchises typically serve a selection of beverages to go with their sticky treats. There's nothing more satisfying than a great coffee (or tea) to help wash down the doughy delight. So, if you serve fantastic coffee, you capture the commuter crowd; grabbing their morning cup of Joe with a yummy donut as an indulgent, sweet breakfast on the go.
Donut franchises offer a vast amount of flexibility for anyone with a flair for baking. You can start a donut franchise that covers all the bases, selling general baked goods such as loaves of bread, freshly made sandwiches, and a range of delicious cakes (of course, including donuts!).
Or you can start a bakery or donut franchise that focuses on a particular type of baked produce. For instance:
Cinnaholic primarily focuses on gourmet cinnamon rolls
Le Macaron French Pastries specializes and distinguishes their offering by focusing on authentic French macarons
Kolache Factor delivers unique and delightful kolaches (a slightly sweet pastry originating in Czechoslavakia). Kolaches are best served filled with spicy sausage, cheese, or fruit.
So, if you're considering offering a new flavor sensation, look for a donut franchise that specializes in the type of bready product that satisfies your particular creative urge.
Top bakery and donut franchises include Cinnabon, Auntie Anne's, Krispy Kreme Doughnuts, Einstein Bros. Bagels, Great American Cookies, and Wetzel's Pretzels.
Franchising Vs. Independent
You can’t start up a bakery or donut franchise without startup funding. Luckily, franchise businesses are often more likely to attract loans from moneylenders because their business model has already been proven successful, sustainable, and profitable.
Independent companies generally suffer higher interest rates on startup loans because they're going into business without the support of an established partnership and a proven business model.
Due to this, almost half of all independent companies go into receivership within the first three years. They struggle to establish themselves against the competition with more significant (and well-known) brands. Franchises, however, tend to hit the ground running and establish themselves more quickly than independents.
Franchisees benefit from the business acumen and the business expertise of their parent company. They get a significant headstart in the market due to their tangible curb appeal and an established customer base who already recognize and love the brand before the donut franchisee has opened their doors.
Donut and Bakery Franchises
Explore our delicious range of fantastic bakery and donut franchises, and get America enjoying the sweet treats and great coffee that will keep them coming back: time and again.
You can also check out many more Food Franchises here on Franchise Direct, such as: