Spotlight: Lender Friendly Franchise Brand– Nothing Bundt Cakes

February 3, 2016

Ron Feldman
Chief Development Officer, FRANdata

Even if you are not a sports fan, most of us have still heard the phrase, “Nothing but net!” at some point in time. If you are a die-hard sports fan like myself though, it immediately conjures up images of a calm, cool and collected NBA star forward nailing a 3-point fade-away shot with less than a second left on the clock, all the while making it look oh-so-easy to do.

What amazes us sports fans about these types of moments, is the level of ease at which players appear to be able to deliver success. But what we sometimes forget is how much they prepare for these situations; the hours of practice, the mental and physical training, all the steps they take to be confident they can make that shot before the game even starts.

In the world of franchising, a brand’s success is inherently linked to the performance of its franchisees. But there are ways franchisors can make sure their franchisees are better prepared before the game starts. Pre-opening training, financing support, on-going support for existing and underperforming units: these are all critical ways a brand gives its franchisees the best chances to succeed.

Much like that star NBA player, Nothing Bundt Cakes is a brand that looks to have prepared for the game.

Founders Dena Tripp and Debra Shwetz opened their first Nothing Bundt Cakes location in 1998 in Las Vegas and their second store started operations in 2002. They formed Nothing Bundt Franchising, Inc. in 2005 to start offering franchises. Since then, they have grown to 151 franchised units and 2 corporate locations spread out over 27 states.

During that time, the brand has shown a Historical Unit Success Rate™ (HSR) of 99.1%. The brand also expects to add another 40+ units and expanding in 2 to 3 new states in this next year. FRANdata expects that Nothing Bundt Cakes will continue to experience a similar Projected Unit Success Rate™ (PSR) in the next two to three years.

The brand employs key criteria during the franchisee selection process. Once selected for onboarding, they offer site selection, as well as pre-opening support and training to ensure franchisees are well-prepared.

Moreover, the on-going support services they offer to franchisees exceed levels of most brands. They have five full time regional field support employees who visit franchised stores at a minimum of once a quarter. The marketing team also works with and supports their bakery owners with local store marketing efforts, and provides comprehensive and ongoing training programs. This involves providing support for the grand opening of the bakery, in addition to performing store evaluations and providing benchmark support to the franchisees.

Also integral to successful brand management is how a franchisor deals with underperforming units. Nothing Bundt Cakes has in-depth systems in place to assist in these situations.

Underperforming stores are identified through P&L and balance sheet review, weekly sales tracking and direct communication with the franchisees. In order to assist underperforming franchisees, the franchisor conducts meetings with them to create a local marketing plan and implement special programs including financial review, best practice recommendations, site visits, weekly check-up calls and allocation of corporate resources to distressed locations.

Just as important is the degree to which they help their franchisees with easier access to financing. In order to streamline the SBA financing process, Nothing Bundt Cakes has had their franchise agreements from 2007 and 2009-2015 approved on the Franchise Registry. In addition, the brand takes part in preparing a Bank Credit Report for lenders to view on the Franchise Registry. This allows lenders to obtain detailed underwriting information about the system that would not otherwise be available.*

On the metaphorical basketball court of franchise lending, no win is ever guaranteed. But like that star forward who has practiced and prepared for the right moment, Nothing Bundt Cakes looks poised to make the shot. “Nothing bundt net,” anyone?

*Lenders can access detailed underwriting tools and SBA approval documentation by visiting www.franchiseregistry.com. There, lenders may purchase a FUND Report on the brand, view their current BCR for free with a signed NDA, and also look forward to an updated BCR coming later this year during the second quarter! For assistance accessing this information, please contact FRANdata’s Lender Support Team by email at franchiseregistry@frandata.com, or call us at 800.485.9570.