Dive Brief:
- Nothing Bundt Cakes has opened its 600th location in Tampa Bay, Florida, the company said Tuesday.
- The sweet shop opened 84 bakeries last year and 41 so far this year, adding that it is on track to become “one of the highest-growth companies in the industry over the next few years,” according to a press release.
- The bundt cake chain plans to reach 1,000 locations by 2027 and continues to seek franchisees across the country.
Dive Insight:
The bakery chain expects to more than triple its annual growth rate, CEO Dolf Berle said in an email to Restaurant Dive. The company anticipates opening over 120 units this year and is on track to achieve an annual unit growth of over 150 units per year, according to Berle. As of December 2023, Nothing Bundt Cakes had about 60 commitments for new units signed, but not yet opened, according to the chain’s 2024 franchise disclosure document.
“With the great desire guests have to show care and kindness to their loved ones and colleagues, coupled with the rising trend of Gen Z enjoying 'little sweet treats' and the snackification of the American diet, Nothing Bundt Cakes is growing faster than ever," Berle said in the press release.
Dessert shops are the fastest growing restaurant concepts in the U.S. with a 52% increase in openings from March 2023 to April 2024, according to Yelp.
Nothing Bundt Cakes has attracted both single-unit and multi-unit operators. Its multi-unit franchisees are a combination of pre-existing bakery owners and new multi-unit operators, Berle said in a statement emailed to Restaurant Dive.
“We are seeking franchisees who have a passion for their communities and are willing to muster relationship-building sales activities to expand the brand in their territory,” Berle said.
Most of the growth it is seeing today is in the Northeast and Northwest, but all regions have whitespace for growth for the brand, Berle said. Nothing Bundt Cakes is 98% franchised and will continue to focus on franchised-owned bakeries, Berle said. It currently has 17 company-owned units which tend to be used for research and testing, he said.
Nothing Bundt Cakes has an initial franchise fee of $35,000 with total initial investment ranging from $483,600 to $699,700, according to its franchising website. Its royalty and marketing fees are 6% and 5%, respectively. Franchisees need to have liquid capital of $250,000 and have a net worth of at least $750,000.
Average square footage was just over 2,000, according to its FDD. Bakeries have an average net revenue of over over $950,000 in their first year increasing to over $1.4 million in their fifth year. The top third of its system have sales volumes of around $2 million.
