Bakers Delight franchise: How much it costs and how to buy one

Established as a single bakery in Melbourne in 1980, Bakers Delight is now the largest Australian-owned bakery franchise, with over 700 bakeries around the world.

Find out how a Bakers Delight franchise works and how to apply as well as compare your finance options below.

How does a Bakers Delight franchise work?

Bakers Delight operates on a franchise model, meaning potential business owners can purchase a bakery from the franchisor or another franchisee. The new owners will then need to manage the business day to day.

You are given extensive training and you'll benefit from the existing Bakers Delight brand awareness and business infrastructure. You will also receive ongoing operational and marketing support in return for paying compulsory franchise fees. You do not need to be a qualified baker to become a franchisee, but you are expected to manage the business on a full-time basis.

How much does a Bakers Delight franchise cost?

Initial costs

The initial cost to establish a new Bakers Delight bakery is between $450,000 and $550,000 on average, depending on the size and location of the proposed new franchise.

Alternatively, you have the option of purchasing an existing Bakers Delight bakery. The cost to purchase an existing bakery will generally be higher than starting a new bakery and could cost up to $1.2 million. The cost will always depend on the location, the size and the past financial performance of the franchise as well as on the length of the lease and the franchise agreement term.

In addition to the initial set-up and establishment costs, you are liable to pay $50,000 plus GST to secure a 10-year franchise agreement. You are also expected to have between $10,000 and $15,000 of unencumbered cash as working capital.

Ongoing costs

You will also need to pay ongoing weekly royalties of 6.5% plus GST of net sales, as well as a 2% advertising contribution fee per week.

This is in addition to the standard costs of running a retail business, such as rent, wages, insurance and the cost of goods sold.

Profitability

When it comes to retail bakeries, Bakers Delight is considered to be relatively low risk and a good overall investment. Bakers Delight is accredited with the Franchise Council of Australia and has won its Franchise of the Year award twice.

Unlike many franchises, Bakers Delight is upfront about how much its franchisees make and the benefits on offer, such as the following:

>$140k average operating profit
>$900k average bakery sales
>10 years franchise tenure
40% of their franchisees are multi-site operators
60-70% bank accredited business model

For Bakers Delight franchises to be successful, they may generally need to be in high foot-traffic areas, such as the food court of a busy shopping centre. Businesses in prime locations may bring in more than $10,000 in weekly sales, but will have correspondingly higher rental costs and potentially increased wages for the prime location and increased foot traffic.

How do I apply to become a Bakers Delights franchisee?

To apply to become a Bakers Delight franchisee, there is a step-by-step application process:

Successful franchisees will be enrolled on a 16-week intensive training program before they begin running their own Bakers Delight, so no experience is necessary to apply.

How to finance a Bakers Delight franchise

Given its length of time in the Australian bakery industry and its market share when it comes to bakeries and bread products, Bakers Delight is an approved franchise with several major lenders in Australia.

This makes obtaining finance easier for potential Bakers Delight franchisees, with many major banks looking favourably upon loan applications to purchase a new or existing franchise.

Bakers Delight also has accreditation with a number of Australian banks, which may lend up to 60% of the value of the purchase price of the franchise. You will then need to fund the remaining 40% using your own capital or by using the equity you have in other assets.

How to get approved for finance

Applying for finance to purchase a Bakers Delight bakery is similar to attending a job interview. Not only must the lender be satisfied that the proposed business is a good investment and that you have the financial backing and security necessary to service the loan, the lender must also be satisfied that you, as the prospective business owner, have the ability to run a successful, profitable business and service your ongoing loan repayments.

When attending your appointment with your prospective lender, plan ahead and bring as much detailed, professionally prepared information and documentation as possible. Prior preparedness will show the lender that, not only are you being open and honest about your financial situation, but you have the ability to plan ahead and take a professional approach to your new business venture.

At a minimum, prepare and bring the following documents:

Your updated resume, highlighting relevant business experience, qualifications, education, skills and training.
The proposed franchise agreement.
A detailed business plan, including at least 12 months of profit and loss and cash flow projections.
Your personal tax returns for at least the last two years.
If you own or run a business, full audited financial statements for the business for at least the last two years.
Full bank statements for all bank accounts, loan accounts and credit card accounts in your name.

Name	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee
Banjo Business Loans	$20,000	$1,000,000	6 months to 3 years	up to 3% for the 36 month loan term	Available for businesses that are at least two years old and has an annual turnover of $500,000.	Go to site More Info	Compare	loading Fetching your data...
Lumi Unsecured Business Loan	$5,000	$300,000	3 months to 3 years	2.5% establishment fee	Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day. Note: Loans settled by 30 June 2022 are eligible for a no repayment period for the first 6 weeks of the loan.	Go to site More Info	Compare	loading Fetching your data...
Valiant Finance Business Loan Broker	$5,000	$1,000,000	3 months to 5 years	$0 application fee	A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.	Enquire now	Compare	loading Fetching your data...
Moula Business Loan	$5,000	$250,000	1 to 2 years	2% Establishment fee	A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.	Go to site More Info	Compare	loading Fetching your data...
Max Funding Unsecured Business Loan	$3,000	$30,000	1 month to 1 year	$0 application fee	An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
OnDeck Business Loans	$10,000	$250,000	6 months to 2 years	3% of loan amount	Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.	Go to site More Info	Compare	loading Fetching your data...
Heritage Bank Equipment Loan	$20,000	$500,000	Up to 5 years	$450	This business loan is designed to buy new or used equipment and has borrowing amounts between $20,000 and $500,000. No monthly fees and the loan is secured against the assets purchased.	Go to site More Info	Compare	loading Fetching your data...
NAB Business Recovery Loan	$20,000	$5,000,000	Up to 10 years	No approval or administrative fees	An Australian government backed loan with competitive rates to assist businesses after lockdowns. Borrow up to $5,000,000. Variable rates from 4.5% p.a. up to 3.95% p.a.	Enquire now	Compare	loading Fetching your data...
Prospa Business Loan	$5,000	$500,000	3 months to 3 years	3% origination fee	Small business loans are available from $5,000 - $500,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $5,000 is necessary. Note: Loans approved by 30 June 2022 are eligible for no repayments for the first 8 weeks of their term.	Go to site More Info	Compare	loading Fetching your data...
Octet Trade Finance	$100,000	$12,000,000	1 month to 2 years	Transaction fee 2.5%	Access a line of credit to pay suppliers in over 65 countries. Borrow from $100,000 up to $12,000,000.	Go to site More Info	Compare	loading Fetching your data...
CommBank SME Restarter Loan	$10,000	$5,000,000	Up to 10 years	No approval or administrative fees	This loan only applies to businesses eligible under the SME Recovery Loan Scheme. Borrow up to $5,000,000 with a special, low rate loan supported by the Australian government to help businesses recover from lockdowns. Variable rates range from 2.6% p.a. to 3.75% p.a.	Enquire now	Compare	loading Fetching your data...
Earlypay Equipment Finance	$20,000	$1,500,000	2 to 5 years	$750 - Establishment fee	Upgrade or expand your business's equipment with equipment finance from Earlypay. Borrow from $20,000 to $1,500,000.	Go to site More Info	Compare	loading Fetching your data...

How to buy a Bakers Delight franchise

If your franchise application is successful you will need to complete a 16-week intensive training program.

How does a Bakers Delight franchise work?