Nothing Bundt Cakes opened its 600th location last week in Tampa, Florida.
At 600 units, Nothing Bundt Cakes has seen tremendous growth since Roark Capital bought the brand three years ago. The cake franchise added more than 200 units since the deal.
That 54 percent three-year growth rate, while high, is sustainable, CEO Dolf Berle said. Nothing Bundt Cakes hired Berle last July. Since then, its growth rate grew “dramatically.” Previously the brand opened 40 to 50 bakeries a year.
“Our goal is to at least triple and, ideally, quadruple that growth rate,” Berle said.
Nothing Bundt Cakes opened its 600th store last week in Tampa, Florida. In May 2021 when Roark acquired the company, Nothing Bundt Cakes had 390 locations and $470 million in systemwide sales. In 2022, the brand’s global sales were $617 million for its then-unit count of 475. All but five of the brand’s stores are located in the United States; the others are in Canada.
Maintaining a high growth rate requires three prongs, Berle said: keeping the brand relevant, pursuing ideal real estate and growing with existing and new owners.
“We’re doing that by continuing to innovate with new products, meaning a higher number of new flavors coming out across the year,” he said. (Its summer limited-time offer flavor is key lime.) The brand is “also improving the marketing efforts in terms of the channels by which they’re growing.”
Nothing Bundt Cakes CEO Dolf Berle
Installing that growth mindset in the corporate team has proved a challenge, but that’s not because of the staff’s resistance. Adding so many units at a quick pace equals changed accountabilities and responsibilities for staff, Berle said. Franchisees, though, are nothing but excited.
North American growth is Berle’s priority, at least for the next few years.
“There’s plenty of opportunity and very exciting real estate and bakery owner enthusiasm about growing our existing footprint,” he said. “However, there will come a point where the ongoing growth of the company will diversify.”
That diversity will come by way of international expansion and new bakery prototypes. Berle sees the eventual opportunity to put Nothing Bundt Cakes in stadiums, airports and other heavy foot traffic areas.
Levin Leichtman Capital Partners invested in the company in 2016, with co-founder Dena Tripp investing her share of the profits back into the business. LLCP upgraded the brand’s C-suite team and grew revenue by four times. Roark paid “over seven times” what LLCP bought Nothing Bundt Cakes for, LLCP managing partner Matthew Frankel said.
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The initial investment required to open a Nothing Bundt Cakes franchise ranges from $585,015 to $1.1 million, according to its franchise disclosure document. Average unit volume in 2023 was $1.5 million, with a ticket average of $27.03 per guest. About one third of orders come from online channels.
The overall sales range was $534,497 to $3.8 million. In 2023, Nothing Bundt Cakes opened 84 units, one of which is corporate-owned. The company partnered with third-party delivery outlets last year as another revenue channel.
“It turns out that there’s quite a number of people who enjoy having cake delivered to their workplace or their home,” Berle said.
His favorite? “My go-to cake is gluten-free chocolate chip,” he said. “Having said that, red velvet is the nation’s most popular, and I would never turn down a slice of red velvet.”