House of Bread Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$42,000 - $584,000
Franchise Fee
$5,000
Total US Locations
7
Business Summary
House of Bread Bakery Café is a specialty bread bakery cafe that offers healthy, low-fat, and deliciously baked goods and sandwiches. The business concept focuses on scratch-baked products, breakfast, and lunch items. House of Bread Franchising Inc. also offers optional concepts like House of Bread Junior, a smaller bakery unit focused on baked goods produced at a senior unit, and The Brew House, a small pub area within a House of Bread location offering beers on tap.
Corporate History
House of Bread Bakery Cafe, an affiliate of House of Bread Franchising Inc., began operating a business similar to the one being franchised on November 11, 1996. House of Bread Franchising Inc. itself was incorporated in California on February 26, 1998, and has been offering franchises since 1999.
Financial Overview
Investment Range
$42,000 - $584,000
Franchise Fee (Low)
$5,000
Franchise Fee (High)
$35,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$9,000
Equipment Costs (High)
$496,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
House of Bread Franchising Inc. experienced a net loss in 2021 but achieved positive and growing net income in both 2022 and 2023. The company's cash position has remained stable, and stockholders' equity, which was negative in 2021, became positive and showed growth in 2022 and 2023. The independent auditor's report issued an unqualified opinion on the financial statements, indicating they are presented fairly in all material respects.
Financing Details
House of Bread Franchising Inc. does not offer any direct or indirect financing for its franchisees. It also does not guarantee any franchisee's notes, leases, or other obligations. However, the franchisor offers assistance to franchisees by providing information on SBA-approved lenders, loan packaging services, and sources for equipment and related financing.
Performance Metrics
Total US Locations
7
Franchised Units
5
Corporate Units
2
Avg Square Footage
1,900
Franchising Since
1999
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
House of Bread Franchising Inc. has no litigation cases to report, as stated in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
House of Bread Franchising Inc. has no bankruptcy history to report, as stated in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, House of Bread Franchising Inc. franchisees must be in good standing, ensure all payments to the franchisor and trade creditors are current, execute a new franchise agreement with the then-current terms and conditions, sign a general release of claims against the franchisor, and pay a renewal fee of $5,000. Additionally, franchisees must make capital expenditures to renovate and modernize the outlet to reflect current brand standards, or relocate the outlet if renovation is not feasible.
Training & Support Program
Franchisor Assistance
Before opening, House of Bread Franchising Inc. helps franchisees by designating an exclusive territory, assisting with business site selection within the exclusive territory (including providing a real estate guide and third-party representation if requested), and negotiating leases or purchases for the location. It also furnishes specifications for required equipment, signs, fixtures, inventory, and supplies. Franchisees receive initial training in seven phases, covering site selection, business plan development, financing, working in a company-owned store (7+ days), facility build-out, and specific training for the franchisee and head baker (7 days), including operational ratios, retail, and baking procedures. The franchisor also provides support for grand opening programs. During operation, House of Bread Franchising Inc. develops new products and services, provides information on developments, and loans a Confidential Operating Manual with mandatory procedures and standards. The franchisor contacts franchisees regularly to discuss operations, holds mandatory meetings on sales, training, accounting, and advertising, and provides advertising materials and examples. It also assists in the formation and administration of local advertising cooperatives once three or more franchises are in a local media area. The franchisor provides ongoing support and maintenance for the Toast Point of Sale Information System at no charge.
Initial Training Hours
184
Training Location
San Luis Obispo, California headquarters
Ongoing Support
After opening, House of Bread Franchising Inc. supports franchisees by developing new products, services, and methods, and providing information about these developments. It loans a Confidential Operating Manual containing mandatory and suggested operating procedures, which is updated periodically. The franchisor contacts franchisees regularly via telephone, fax, or email to discuss operational situations. Mandatory meetings are held to discuss sales techniques, personnel training, bookkeeping, accounting, inventory control, performance standards, advertising programs, and merchandising procedures. The franchisor provides examples of advertising materials and marketing resources. Additionally, House of Bread Franchising Inc. provides ongoing support and maintenance for the Toast Point of Sale Information System at no charge throughout the franchise contract.
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
Hands-On
Territory Type
Exclusive
Territory Size Requirements
House of Bread Franchising Inc. grants franchisees an exclusive territory defined by zip codes, with a population range of 20,000 to 80,000 people. Within this territory, the franchisee has the exclusive right to open House of Bread Bakery Cafés, and the franchisor will not operate or grant franchises for similar or competitive businesses.
Staffing Notes
House of Bread Franchising Inc. requires that either the franchisee or a fully trained and qualified operating manager devote full-time to the management and operation of the outlet. The franchisee and the main baker must attend and complete all initial training programs. The franchisor will also provide a bakery trainer to train production staff and assist the franchisee in training their lunch and retail staff prior to opening.