Breadsmith
Breadsmith offers premium hearth-baked breads and complementary food products in retail and wholesale formats. Known for high-quality baked goods, it operates in the competitive bakery franchise market.
About Breadsmith
Breadsmith is a Milwaukee, Wisconsin-based bakery franchise organization that specializes in artisan breads, and has over 35 stores in the United States, mostly located in the Upper Midwest.
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Breadsmith franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Breadsmith primary franchise store ranges from $327,210.60 to $503,250. This includes an amount that must be paid to the franchisor or affiliate ranging from $136,000 to $144,000. [p.1]
What is the initial franchise fee?
The initial franchise fee is $30,000 upon signing of the franchise agreement. This fee constitutes remuneration for screening, interviewing, and processing the franchisee, as well as consultation regarding the setup of the business to be operated under the agreement [p.84, p.245].
What are the ongoing royalty and advertising fees?
The FDD does not specify the exact amounts for ongoing royalty and advertising fees. These terms may differ materially upon renewal, as stated on pages [p.91] and [p.166], but new initial fees will not be required in connection with renewal. For detailed financial information, you would need to review the most current franchise agreement provided by BFI at the time of renewal.
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD excerpts discuss renewal terms but do not specify the length of the initial franchise agreement or explicitly state whether you can renew it.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell or transfer your franchise without the prior written consent of the franchisor [p.187]. The franchisor may approve a transfer only if the proposed assignee owns and operates a Primary Store and is in good standing with BFI. Additionally, Franchisee must not transfer or sell substantially all the assets of its franchise business except with the prior written consent of the franchisor [p.187].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.241]. Additionally, the franchisor may terminate the agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure within a reasonable time frame [p.5].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD does not detail specific net worth or liquid capital requirements for franchisees to qualify.
Do I get an exclusive or protected territory?
Yes, you receive an exclusive territory. Once approved and designated, your store will have a 5-mile exclusive territory around it, with some exceptions for regional shopping malls [p.29]. This exclusivity does not depend on achieving specific sales volumes and prevents other BREADSMITH bakeries from operating under the same name in your designated area [p.29]. However, the franchisee does not have options or rights of first refusal to purchase additional locations [p.201].
What training and ongoing support does the franchisor provide?
The franchisor provides initial consultation, assistance, and training, along with the use of an operation manual before the store opens. They also offer ongoing consultation and advice on operating the franchise and using their names, marks, systems, recipes, and trade dress in accordance with the terms of the franchise agreement [p.81].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor is permitted to share actual or potential financial performance information if there is a reasonable basis for it, but this must be included in the disclosure document [p.37]. The franchisor does not make any financial performance representations other than those specified in Item 19 of the FDD, and they do not authorize their employees or representatives to make such representations either orally or in writing [p.39].
What am I restricted to selling, and where must I buy supplies?
You are restricted from buying items from a limited group of suppliers designated by the franchisor, which may be more expensive than other options. Regarding sales, you can sell frozen breads, frozen par-baked bread, frozen dough, frozen pizzas, and other items through supermarkets, department stores, and specialty retail stores, but only if at least eighty percent of the revenues of such stores are generated from products not typically offered in BREADSMITH stores, both inside or outside your Designated Territory. [p.3] [p.165]