Risk Score
Pending analysis
Investment Range
$327,210 - $506,250
Franchise Fee
$46,000
Total US Locations
29
Business Summary
Breadsmith Franchising, Inc. offers franchises for retail and wholesale businesses specializing in a wide assortment of premium quality hearth baked breads, hearth baked products, food products, and complementary items. Breadsmith bakeries operate with an efficient open-kitchen concept and offer a generous sampling program. The business serves both direct retail customers, primarily middle and upper-income consumers, and wholesale markets including grocery stores, restaurants, and country clubs, utilizing Breadsmith's confidential recipes and baking techniques.
Corporate History
Breadsmith Franchising, Inc. was incorporated on September 21, 1993, and has been offering franchises since September 1993 under the name BREADSMITH. Initially, Breadsmith focused on establishing and operating retail stores. In 1999, the company shifted its strategy to become a 'bread company' that includes retail stores and also develops and services bulk and wholesale accounts. This involved building national and regional wholesale relationships for its stores to service. In 2009, Breadsmith began offering opportunities for existing primary store franchisees to open satellite locations, which receive most products from the primary store with minimal on-site baking. Breadsmith Franchising, Inc. does not operate its own stores, but an affiliated company, Breadsmith Inc., operates two company-owned stores and two satellite stores, which serve as training and research and development facilities. The first of these affiliated stores opened in June 1993.
Financial Overview
Investment Range
$327,210 - $506,250
Franchise Fee (Low)
$46,000
Franchise Fee (High)
$49,000
Royalty %
5%
Equipment Costs (Low)
$249,961
Equipment Costs (High)
$385,000
Working Capital
$14,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Breadsmith Franchising, Inc.'s financial statements for the years ended December 31, 2023, and 2022, received an unqualified opinion from independent auditors, Ritz Holman LLP, indicating that the financial statements are presented fairly in all material respects. The company maintains positive working capital, with current assets of $232,608 and current liabilities of $67,076 in 2023, and $334,588 in current assets and $91,061 in current liabilities in 2022. Net income was $37,783 in 2023 and $180,415 in 2022. The company's retained earnings were $142,092 in 2023 and $229,309 in 2022. No going concern issues or other material financial difficulties were noted by the auditors.
Financing Details
Breadsmith Franchising, Inc. does not offer any direct or indirect financing to its franchisees. Additionally, Breadsmith Franchising, Inc. does not guarantee any notes or other financial obligations that a franchisee might incur.
Performance Metrics
Total US Locations
29
Franchised Units
25
Corporate Units
4
Avg Square Footage
1,750
Franchising Since
1993
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Breadsmith Franchising, Inc. has no litigation cases that are required to be disclosed in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Breadsmith Franchising, Inc. has no bankruptcy history that is required to be disclosed in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew their franchise, Breadsmith Franchising, Inc. franchisees must provide at least 240 days' written notice before their agreement expires. They must be in substantial compliance with all terms of their current agreement and any other agreements with the franchisor or its affiliates. Franchisees must sign the franchisor's then-current franchise agreement, which may have materially different terms, including royalty fees, advertising contributions, and territory revisions. They are also required to sign a general release of all claims against Breadsmith Franchising, Inc. and its affiliates. Franchisees must maintain possession and continue to operate at least one franchise location, remodel it to meet current brand standards (including equipment and software), and successfully complete any prescribed retraining programs. Finally, a renewal fee of $3,000 is required.
Training & Support Program
Franchisor Assistance
Before opening, Breadsmith Franchising, Inc. designates an operating area, provides a sample layout and core specifications, and consults on bakery construction and equipping. Breadsmith also provides lists of approved suppliers, sells ovens and initial equipment, and offers an initial three-week training program in the Milwaukee, Wisconsin metropolitan area at no cost for tuition. On-site assistance for approximately 12 days is also provided around the opening date. Franchisees are loaned recipe books and confidential manuals. After opening, Breadsmith Franchising, Inc. provides guidelines for bulk and wholesale accounts, develops new baked goods and products with their standards, conducts periodic store inspections, and evaluates new suppliers. They also provide institutional public relations, advertising, and promotional campaigns. Breadsmith Franchising, Inc. develops standardized reporting forms and offers 1-3 weeks of manager training for a fee if the owner is not full-time. They may also recommend product prices and require participation in an Ordering and Loyalty Program.
Initial Training Hours
142
Training Location
Whitefish Bay, WI
Ongoing Support
After opening, Breadsmith Franchising, Inc. offers various ongoing support services. They provide guidelines for soliciting bulk and wholesale accounts and develop new baked goods and other food products, along with preparation standards. The franchisor conducts periodic store inspections to maintain uniformity and quality control. They evaluate alternative suppliers for franchisees and send institutional public relations, advertising, and promotional campaigns. Breadsmith Franchising, Inc. develops standardized reporting forms and offers additional manager training (1-3 weeks) for a fee if the owner does not manage the store full-time. They may also recommend prices for products. Franchisees are required to participate in Breadsmith's Ordering and Loyalty Program. An annual preventative maintenance visit for ovens and mixers is provided, with repair services available for a fee covering labor, parts, materials, and travel costs. Franchisees must also comply with and use specified computer systems, Point of Sale (POS) systems like Revel iPad Register System, credit card processing through Heartland Payment Systems, and maintain security cameras with remote access.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
exclusive
Territory Size Requirements
Breadsmith Franchising, Inc. designates an exclusive territory of five miles surrounding each primary store, measured by roads an automobile would travel. If a store is located in a regional shopping mall of at least 500,000 square feet with two anchor tenants, the exclusive territory is limited to the physical boundaries of that mall.
Staffing Notes
Breadsmith Franchising, Inc. recommends that the franchisee or a designated principal owner devote full-time effort to supervising the business. If the franchisee does not manage the store at least 40 hours per week, they must appoint a full-time manager who completes a three-week training program, for which a one-time Non-Owner Manager Fee of $5,000 is required. Managers are also required to be personally involved in all bulk and wholesale accounts. All personnel, particularly those in managerial or supervisory roles or with access to confidential information, must sign confidentiality, non-competition, and non-solicitation agreements. Breadsmith also sets standards for the sanitation, cleanliness, and demeanor of all personnel. While initial training for new employees is mentioned in the estimated initial investment, no specific staff count is provided.