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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.
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.
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.
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.
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:
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.
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.
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.
Consider which of these finance options may best suit your circumstances:
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.
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:
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