Paris Baguette Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$727,440 - $1,825,100
Franchise Fee
$40,000
Total US Locations
197
Business Summary
Paris Baguette Family Inc. operates Paris Baguette Cafes, which are establishments offering a variety of French-inspired high-quality breads, pastries, cakes, and other artfully-displayed desserts. These cafes also serve handcrafted sandwiches, soups, salads, and both hot and cold beverages. Traditional Paris Baguette Cafes typically feature an inviting area for in-cafe dining and are located in free-standing buildings or strip malls, usually with a footprint of 3,000 square feet or more. Paris Baguette also offers franchises for non-traditional locations like grocery stores, airports, hospitals, or stadiums, which may have a smaller format.
Corporate History
Paris Baguette Family Inc. was incorporated in Delaware on October 27, 2014, and operates under its corporate name and the brand "Paris Baguette." The company began offering new franchises on March 1, 2015, although two affiliated-owned Cafes were converted to franchises on the same day it was formed. Paris Baguette Family Inc.'s main business is selling Paris Baguette Cafe franchises and providing related products and services to its franchisees. The company itself does not directly operate Paris Baguette Cafes, but its affiliate, Paris Baguette America, Inc. (PBA), owns and runs 11 such Cafes in the United States. Before Paris Baguette Family Inc., its predecessor, Paris Baguette USA, Inc. (PBUSA), offered two Paris Baguette Cafe franchises from January 2011 to January 2012, which were later transferred to Paris Baguette Family Inc. The brand is part of a larger international group, with Paris Croissant Co., Ltd., a Korean company formed in 1986, holding the trademark and patents, which it licenses to Paris Baguette Family Inc. through another affiliate, Paris Baguette Bon Doux, Inc. (PBBD). PBBD also has a majority stake in Zinc Enterprises, Inc., which runs Zinc Cafes.
Financial Overview
Investment Range
$727,440 - $1,825,100
Franchise Fee (Low)
$40,000
Franchise Fee (High)
$50,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$533,456
Equipment Costs (High)
$1,384,500
Working Capital
$65,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Paris Baguette Family Inc.'s financial statements reveal a negative stockholders' deficiency (meaning liabilities exceed assets) for both 2023 and 2024. While the company reported a net income in 2024, it experienced a net loss in 2023. A risk factor in the FDD specifically states that Paris Baguette Family Inc.'s financial condition "calls into question the Franchisor's financial ability to provide services and support to you." Additionally, management has provided full valuation allowances for deferred tax assets, indicating uncertainty about the realization of future taxable income.
Financing Details
Paris Baguette does not offer any direct or indirect financing to franchisees, nor does it guarantee any notes, leases, or other obligations for them.
Performance Metrics
Total US Locations
197
Franchised Units
186
Corporate Units
11
Avg Square Footage
3,500
Franchising Since
2015
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Paris Baguette Family Inc. has disclosed two litigation matters. The first involved Paris Baguette's affiliate, Paris Croissant, and other related SPC Affiliates. In October 2020, they received an order and administrative surcharge from the Korea Fair Trade Commission (KFTC) for allegedly engaging in unfair assisting by purchasing raw materials from an affiliate at inflated prices. The SPC Affiliates appealed this decision, and in January 2024, the Seoul High Court nullified most of the KFTC's remedial orders and the entire administrative surcharge. Both sides appealed to the Supreme Court of Korea, which in June 2024, affirmed the High Court's decision, upholding only one remedial order related to flour bulk procurement and nullifying the administrative surcharge, which was then refunded. A review is pending to determine if a surcharge will be assessed for the single upheld order. The second matter is a pending action from April 2024, where Paris Baguette's Chairman, Young-in Hur, was charged by the Seoul Central District Prosecutors' Office. He is accused of violating the Trade Union and Labor Relations Adjustment Act by allegedly forcing bakers at South Korean Paris Baguette locations to withdraw from one union and join another between 2019 and 2022. Mr. Hur denies all charges, and the matter is currently being tried in Seoul Central District Court.
Bankruptcy History
Paris Baguette has no bankruptcy history to disclose.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Paris Baguette franchise, franchisees must provide 6 to 9 months' prior written notice. They must also complete all required refurbishment, maintenance, and upgrades to their Cafe to meet Paris Baguette's then-current System standards, including conducting a grand re-opening. Franchisees must be in good standing, without default under their franchise agreement or any other agreements with Paris Baguette or its affiliates. All monetary obligations to Paris Baguette, its affiliates, and approved suppliers must be satisfied. Franchisees must maintain possession of their Cafe's leased premises and execute Paris Baguette's then-current form of renewal franchise agreement, which may have different terms, potentially including higher royalty and marketing fees or a modified protected area. A renewal fee equal to 50% of the then-current standard Initial Franchise Fee must be paid. Additionally, franchisees and their principals must sign a general release of claims against Paris Baguette and its affiliates, and meet current qualification and training requirements.
Training & Support Program
Franchisor Assistance
Before a Paris Baguette Cafe opens, the franchisor assists with designating the area, providing up to three site visits for site evaluation and construction consultation (additional visits may incur fees), and offering access to standard architectural and design plans. Paris Baguette reviews and approves franchisee architectural plans, grants access to its manuals, and reviews/approves lease or real estate purchase agreements. It also provides a list of approved suppliers and specifications for necessary inventory and equipment, selling initial inventory, bakery equipment, chairs, and smallwares to the franchisee. Paris Baguette conducts initial training for the Operating Principal, Cafe Manager, and 8-10 food production personnel, and provides in-Cafe assistance for a prescribed period around the opening date with two operations personnel and three food production personnel. The franchisor also approves initial advertising and helps facilitate grand opening campaigns. After the Cafe opens, Paris Baguette conducts periodic evaluations and quality control inspections, administers the Marketing Fund, and provides advertising and promotional materials. It offers advice and written materials on managing and operating the Cafe, including updates to manuals, and may set maximum or minimum pricing for certain items. Paris Baguette makes merchandise available for resale, maintains updated lists of approved items and suppliers, and acts as the sole supplier for specific core ingredients and branded items. It also provides additional training programs, access to proprietary software, and may design, update, and host a website (potentially including a webpage for the franchisee's Cafe). Additionally, Paris Baguette periodically amends and enforces System Standards and provides operational and methodological advice.
Initial Training Hours
240
Training Location
Moonachie, New Jersey, Santa Clara or Costa Mesa, California training Centers, and/or online
Ongoing Support
After a Paris Baguette Cafe opens, the franchisor conducts periodic evaluations and quality control inspections. It administers the Marketing Fund and provides advertising and promotional materials. Paris Baguette may offer advice and written materials on managing and operating the Cafe, including new developments and updates to its manuals, and reserves the right to set maximum or minimum pricing for certain items. It makes merchandise available for resale and maintains updated lists of approved items and suppliers. Paris Baguette is the sole supplier for items such as dough, pastry, produce, dairy, proteins, cake sheets, dry groceries, dry goods, paper products bearing the Paris Baguette Mark, bakery equipment, chairs, and packaging. The franchisor also provides additional training programs and seminars at a designated training center. Franchisees receive access to proprietary software programs and may be included in a website designed, updated, and hosted by Paris Baguette. The franchisor periodically amends and enforces System Standards and provides ongoing advice concerning operations, new techniques, or operating methods for the Cafe.
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
Protected
Staff Count
11
Territory Size Requirements
The Paris Baguette franchise generally does not grant an exclusive territory, but a Protected Area may be designated in the Franchise Agreement. The actual size and shape of this Protected Area are determined by Paris Baguette Family Inc. in its sole discretion, based on factors such as traffic patterns, population density, income level, and the number of households and businesses in the area. In some cases, a Paris Baguette Cafe may not receive a Protected Area. For franchisees who sign an Area Development Agreement, a Development Area is granted, which is determined by Paris Baguette Family Inc. before signing the agreement based on market and economic factors like market demographics, market penetration, site availability, and growth trends. This Development Area can be all or a portion of a city, a single or multi-county area, or another geographically identifiable area.
Staffing Notes
Paris Baguette requires franchisees to designate an Operating Principal who must dedicate reasonable and adequate time to supervising the Cafe's operations. For single-unit franchisees, the Operating Principal can directly supervise the Cafe or, with Paris Baguette's written consent, appoint a Cafe Manager. If a franchisee operates multiple Cafes as an Area Developer, they must appoint a Cafe Manager for each location to handle day-to-day operations, while the Operating Principal oversees these Cafe Managers and the general development and operations of all Cafes. Both Operating Principals and Cafe Managers must meet Paris Baguette's training and operational standards. Franchisees are responsible for recruiting, training, and developing all employees, independent contractors, and other personnel to properly operate the Cafe. During all operating hours, either the Operating Principal, Cafe Manager, or another qualified manager must be on duty. Initial training includes the Operating Principal, Cafe Manager, and 8-10 food production personnel, with additional training possibly required if a Cafe opens more than a month after initial training. Franchisees are responsible for their personnel's payroll, travel, lodging, and meal expenses related to training.