Breadsmith Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$30,000
Investment required
$330,000 - $506,000
Royalty fee
5% to 7%

Breadsmith: A Pioneer in Artisan Bread Baking

Breadsmith, a cherished artisan bakery, was established in 1993 by Dan Sterling. His enthusiasm for European-style breads blossomed during his time studying in Norway, which inspired him to open the first Breadsmith bakery in Milwaukee, Wisconsin. From its inception, Breadsmith has been dedicated to crafting breads from scratch, using traditional baking methods.

The bakery's focus on quality and simplicity is evident in its diverse range of breads, made from essential ingredients like flour, water, salt, and yeast. These are often complemented by natural additions such as grains, fruits, nuts, and spices.

Seeing an opportunity for expansion, Breadsmith started franchising in 1994, merely a year after opening its doors. This decision was pivotal in spreading the bakery's love for authentic, high-quality bread to more communities throughout the United States.

Breadsmith's central operations are based in Whitefish Bay, Wisconsin. The headquarters directs the brand's mission to deliver exceptional breads and baked goods. Tim Malouf, who has been part of Breadsmith since its early days, now leads the company, ensuring it remains true to its original values while also pursuing innovation and growth in the bakery sector.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Type of Expenditure Amount
Initial Franchise Development Fee $49,000 ($46,000 for veterans)
Equipment and small wares $57,960.60 - $170,000
Leasehold Improvements and Fixtures $192,000 - $215,000
Opening Inventory $4,000 - $7,500
Signage $5,000 - $8,000
Security Deposits $3,000 - $6,000
Promotion $500 - $4,000
Pre-Opening Training $5,000 - $7,500
Non-Owner Management Fee $0 - $5,000
Miscellaneous (legal, insurance, permits, office supplies, tools, etc.) $9,750 - $10,250
Additional Funds (6 months) $4,000 - $24,000
TOTAL $330,210.60 - $506,250 ($327,210.60 - $503,250 for veterans)

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Number of units

2024
Franchised units

31

30

27

Company-owned units

2

4

4

Total units

33

34

31

Franchise Disclosure Document

Training 

Breadsmith offers thorough training to franchisees to guarantee successful operations. The training encompasses:

Initial Training Program

Breadsmith hosts an initial training program for the franchisee and a chosen employee at a Breadsmith location, typically in Milwaukee, Wisconsin, or another designated site. This program lasts around three weeks and is scheduled to coincide closely with the store's opening. It may be conducted in a group setting with other franchisees and covers all essential aspects of running a Breadsmith bakery, including product preparation, store management, customer service, and financial management. Franchisees are responsible for their own travel, lodging, and meal expenses during the training.

On-Site Assistance

Additional on-site assistance may be provided by Breadsmith after the initial training period, especially during the store's launch phase. This includes further training and operational support to ensure a seamless start. Franchisees must cover the costs associated with this extra support, including any per diem charges incurred by Breadsmith's personnel.

Manager Training

If the franchisee is not involved in daily operations or reduces their involvement, a designated manager must be appointed to oversee the store. This manager is required to complete a training program provided by Breadsmith to ensure they are fully prepared to manage the bakery. The franchisee is responsible for all costs related to the manager's training, including a one-time Non-Owner Manager Fee of $5,000 prior to the start of the training.

Requesting Additional Training

Franchisees can request extra training for themselves or their staff. While Breadsmith may choose to offer this additional training, it is not obligated to do so. Franchisees must cover the expenses for additional training, including transportation, meals, lodging, and any fees for the services of Breadsmith's representative.

Territory Protection

Breadsmith provides franchisees with a "designated territory," generally defined as the area within a 5-mile radius from the store. This distance is measured based on the routes an automobile would travel from the parking space closest to the store's front door. If the franchise is located within a regional shopping mall that has at least 500,000 square feet of space and at least two department stores as anchor tenants, the designated territory is defined by the physical boundaries of the mall itself.

However, Breadsmith reserves the right to sell franchises or open company-owned stores outside of this designated territory. Additionally, the franchisor may solicit, establish, and service bulk and wholesale accounts outside the franchisee's designated territory.

For franchisees operating a satellite store, Breadsmith agrees not to grant franchises or operate bakeries selling hearth-baked products under any name within a 5-mile radius of the satellite store. The same provisions apply regarding the physical boundaries of a regional shopping mall, if applicable.

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