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Would you buy into custom cake franchise?

post #1 of 16
7/29/11 at 6:19am
Thread Starter 
If yes, why do you think it's a good idea?

If no, why not?

If maybe, what would sway you to a yes?

Just wondering if I should take this business proposal seriously and would love to get outside opinions.

Thanks
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post #2 of 16
7/29/11 at 7:27am
Thread Starter 
Anyone? Any ideas?
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post #3 of 16
7/29/11 at 7:48am
I would ask yourself this...if you're able to buy into a franchise, are you also able to start your own business. What would your limitations be in buying into a franchise? Would you be bound to use the ingredients and designs 'they' prescribe?
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post #4 of 16
7/29/11 at 7:53am
What does the franchise offer, and what would it cost you to develop similar capabilities?
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post #5 of 16
7/29/11 at 7:59am
What kind of franchise is it?

About 20+ years ago I was approached to join a cake delivery franchise...the idea was that someone could order a cake by calling and 800 number, then the closest franchise bakery would do the cake and deliver it. Kinda like ordering flowers thru Tele-Flora or FTD.

Well, I was only in it for a short time. I was apparently the only bakery on the list in the area for an order in a town an hour away! I did the cake (a 'last-minute' order, no less), refrigerated it overnight because of the fillings I used, delivered it an hour away first thing in the morning. Told the customer that it had been in the frig overnight and it would be best to let it sit out before serving it.

I never got paid for my trouble. Customer called the franchise to complain that I had delivered a 'frozen' cake! what??? Obviously they just wanted a free cake and never intended to pay for it. I immediately terminated my membership with them.

The idea is, perhaps, not a bad one. It's just with today's computer searches available, a customer can just google a bakery within the delivery area and use a cc!

Give us some more info so we know how to advise you.
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post #6 of 16
7/29/11 at 8:09am
Thread Starter 
Quote:
Originally Posted by jason_kraft

What does the franchise offer, and what would it cost you to develop similar capabilities?



The franchise requires only an $8-12K investment plus 4% royalty fees. It's my responsibility to pay the rental/lease fees. However, they help me find a space with the correct specifications. (It's a small space, 800 -1000 square feet.) They will do the marketing, advertising campaigns and set certain specials and deals to drive people to the company.

It is primarily bake and delivery. While the franchisee is required to use the parent company's recipes and ingredients and certain designs that are being advertised, the sky is the limit as far as my decorative creativity goes. Meaning I can make a cake as tall or as wide and decorate them how I want with the exception of porn cakes. (They are not allowed, but that wouldn't affect me.)

I can choose from a small list of moderately priced suppliers or buy direct from the franchisor.

Can't think of anything else. Feel free to ask away.
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post #7 of 16
7/29/11 at 8:13am
Thread Starter 
Quote:
Originally Posted by cakedout

What kind of franchise is it?

About 20+ years ago I was approached to join a cake delivery franchise...the idea was that someone could order a cake by calling and 800 number, then the closest franchise bakery would do the cake and deliver it. Kinda like ordering flowers thru Tele-Flora or FTD.

Well, I was only in it for a short time. I was apparently the only bakery on the list in the area for an order in a town an hour away! I did the cake (a 'last-minute' order, no less), refrigerated it overnight because of the fillings I used, delivered it an hour away first thing in the morning. Told the customer that it had been in the frig overnight and it would be best to let it sit out before serving it.

I never got paid for my trouble. Customer called the franchise to complain that I had delivered a 'frozen' cake! what??? Obviously they just wanted a free cake and never intended to pay for it. I immediately terminated my membership with them.

The idea is, perhaps, not a bad one. It's just with today's computer searches available, a customer can just google a bakery within the delivery area and use a cc!

Give us some more info so we know how to advise you.



In this case, the franchisee is contacted directly and not through an 800 number. It's kind of like a Ms. Field's but for custom cake delivery.
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post #8 of 16
7/29/11 at 8:25am
I wouldn't do it.

If you can afford to rent space and spend 8 to 12K, then why not open your own shop, with your own recipes and designs? Build up your own business name instead of paying to use theirs.

Besides, even with the same recipes and designs, there's a lot of room for error. Say they sell six franchises and of those, four don't know what they're doing and make crappy cakes. Their customers then complain online everywhere they can, and any time someone googles your bakery, they find those bad reviews and you lose out on business.
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post #9 of 16
7/29/11 at 9:38am
Quote:
Originally Posted by sweetlayers

The franchise requires only an $8-12K investment plus 4% royalty fees. It's my responsibility to pay the rental/lease fees. However, they help me find a space with the correct specifications. (It's a small space, 800 -1000 square feet.) They will do the marketing, advertising campaigns and set certain specials and deals to drive people to the company.


Is the 4% off gross or net? Did they give you any specifics about the advertising campaigns they will run, and what remedies do you have if they fail to hold up their end of the bargain? What kind of "specials" and "deals" will they be offering, and will you be reimbursed for them? Will they provide you with a POS system and accounting support?

Quote:
Quote:

I can choose from a small list of moderately priced suppliers or buy direct from the franchisor.


Can you see a price list up-front? This is where franchisors can make a lot of money off franchisees, if they get a cut of supplier sales or offer supplies at inflated prices.

What's the name of the franchise? You may want to do a quick search to see if anyone else has bought this franchise and posted their experience online.
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post #10 of 16
7/29/11 at 9:53am
Custom cakes seems like a nearly impossible thing to franchise.... One (if not the ONLY) benefit of owning a franchise is instant brand recognition and the national or regional marketing that they would be doing for you. Have you heard of this company before? I have never heard of one, but that may be my area. If you are going to have a business that no one has heard of before, it might as well be yours to do with what you like. It's not like they are going to give you the hard stuff like an skill (not saying you don't have it, haven't looked at photos), skilled employees, and an accountant.
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post #11 of 16
7/29/11 at 10:41am
Quote:
Originally Posted by KoryAK

Custom cakes seems like a nearly impossible thing to franchise.... One (if not the ONLY) benefit of owning a franchise is instant brand recognition and the national or regional marketing that they would be doing for you.


I would say having support on the business operations side is another important benefit of owning a franchise. Of course that benefit is only as good as the business talent offered by the franchisor, but if they know what they are doing it can be much cheaper than hiring your own business manager.

Now that I think about it, this would be an interesting business opportunity in states that have recently passed cottage food laws -- a franchise could offer turnkey business support to home bakers so they can focus on making cakes instead of marketing, pricing, procurement, accounting, etc.
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post #12 of 16
7/29/11 at 11:09am
Not trying to be doom and gloom but......Just be advised that when you buy into a franchise, you do it their way and only their way. Corporate America at it best. Everything by the Corporation Manual or you could have to forfeit your investment or be very unhappy with what you are doing.
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post #13 of 16
7/29/11 at 7:14pm
Thread Starter 
Thanks for all your opinions. I have a great deal to consider and you all have helped me begin to lay it all out!
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post #14 of 16
7/31/11 at 11:57am
If youhave that kind of $ to buy a franchise, you can open your own shop and create some fab marketing campaigns.

I signed up with the 800# order a cake place too. Very bad idea. I got paid for some, not paid for others.
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post #15 of 16
7/31/11 at 12:13pm
While being part of a franchise does have its advantages, I agree with what others posted. If you have the $ why not start your own business that way you can make all of the decisions. As for advertising, etc., while it is important for a business, I've found that the food speaks for itself. If you have a reputation of having amazing cakes that taste great as well, people will spread the word about you and you will get alot of business without spending all the $.
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