Nothing Bundt Cakes

The Nothing Bundt Cakes franchise fee is $45,000 for a standard new bakery, reduced to $22,500 for additional units if you sign a Development Rights Rider. There are no refunds.

Total investment for the prototype format (1,600–1,800 sq ft) runs $667K to $907K. The biggest line items are leasehold improvements ($275K–$350K) and fixtures and equipment ($200K–$275K) — you're fitting out a commercial baking operation, and those specialty ovens and display cases add up. Add $25K in initial inventory, $12K–$25K in opening advertising, $7.8K–$12.5K for the POS system, and $75K in three-month working capital reserves.

For a larger bakery (over 1,800 sq ft), investment rises to $747K–$1.03M. That upper end is significant for a single-product bakery concept.

The ongoing fee structure is where Nothing Bundt Cakes stands out — and not favorably. The royalty is 6% of net revenues weekly. The advertising contribution is another 5% (split between a Production Fund and Paid Media Fund as the franchisor directs). Together that's 11% of every dollar you make leaving the business before you cover labor, rent, or COGS. The brand's average COGS is 23.5% and average labor is 27.6%, which means at median revenue, your operating margin before rent and other overhead is already compressed.

Additional recurring costs include: POS support at $279/month, online ordering at $100/month, VoIP at $100/month, digital menu boards at $35/month, and a refrigeration monitoring system running $520–$640/month all-in. These add roughly $1,100–$1,200/month in mandatory technology overhead.

The renewal fee is 50% of the then-current franchise fee — currently $22,500 — which is a real cost of long-term ownership.

Nothing Bundt Cakes discloses strong Item 19 data from 459 qualifying franchised bakeries (those open at least two full years as of end of 2024).

FY 2024 full system (459 bakeries): - Average gross revenue: $1,480,010 - Median gross revenue: $1,354,939 - 40% of reporting bakeries met or exceeded the average

By tier: - Top third (153 bakeries): Average $2.08M, median $1.94M, high $3.68M - Middle third (153 bakeries): Average $1.37M, median $1.35M - Bottom third (153 bakeries): Average $985K, median $1.02M, low $502K

Profitability data (297 bakeries with P&L submissions): - Average 4-wall EBITDA: $316,591 (21.6% margin) - Median 4-wall EBITDA: $286,974

At the median EBITDA of $287K on a $787K midpoint investment, the implied payback is roughly 2.7 years before financing costs. That's genuinely strong for a brick-and-mortar food concept. But the 4-wall EBITDA figure does not include debt service on your initial investment, and the 297-bakery P&L sample excludes newer and potentially weaker performers.

Year 1 new bakeries (2018–2023 openings, 310 stores): average $962K, suggesting solid ramp-up economics for well-located units. Mature market locations (market density 76+ bakeries) average $1,026K in Year 1 vs $644K for early-market locations — brand awareness compounds.

Nothing Bundt Cakes has been one of the fastest-growing franchise systems in the U.S. over the past three years: 408 franchised units at the start of 2022, 459 by year-end, then 542, then 643 — plus 17 company-owned. That's 235 net new franchised units in three years, roughly 19% compounding annual growth.

The 2024 surge of 101 net new units in a single year is the figure to scrutinize. That growth rate can dilute territorial exclusivity, strain franchisor support capacity, and introduce newer, less-tested operators into the system. The system now has 660 total units.

On the positive side, closure rates are not disclosed separately in Item 20, and the system's reported net change figures suggest very low attrition. The brand continues to expand and shows no signs of systemic closures. The 17 company-owned stores suggest the franchisor is willing to put its own capital into the concept.

The rapid expansion does create a real territory saturation risk in major metro areas. If you're buying a territory today, confirm there are no existing bakeries within the exclusivity radius before committing.

The 11% combined royalty and ad fund is the single biggest flag. For a food concept, where COGS averages 23.5% and labor averages 27.6%, that leaves roughly 38% of revenue to cover rent, utilities, debt service, and owner compensation. At the median $1.35M revenue, that's about $513K in gross margin — which sounds fine until you model a below-average location at $985K average revenue, where the margin compresses to roughly $370K before rent and financing.

The advertising fund split is franchisor-controlled. You contribute 5% of revenue, but NBC Franchisor LLC decides how it's allocated between Production and Paid Media Funds. You have no vote on how your advertising dollars are spent.

The renewal fee (50% of current franchise fee, likely $22,500 at today's rates) is an above-average renewal cost — plan for it as a real expense at year 10.

Delivery vehicle requirements ($500–$35,000 range) are worth flagging: corporate catering and delivery is apparently part of the model, adding operational complexity beyond a pure retail bakery.

The rapid 19% annual unit growth means the Item 19 data is increasingly populated by newer, potentially higher-volume locations in dense markets. Your territory may not match those economics if you're opening in a secondary market or a market already well-penetrated by the brand.