How To's
The Actual Paris Baguette Franchise Cost
Opening a new bakery-café can be a hit or miss. Since there are established and recognized bakery-cafés, it may pose challenges in getting new customers and meeting financial goals. That’s why franchising one can become the next best option. One bakery-café chain presents such an opportunity— Paris Baguette. But how much does a Paris Baguette franchise cost?
In this article, learn more about the Paris Baguette franchise, plus other information in starting one.
Paris Baguette Franchise Overview
Before it became Paris Baguette, its origins were traced back to 1945 in South Korea. Then, it was called Sangmidang. That helped launch several companies that would eventually open the first Paris Baguette store in 1988.
Besides South Korea and the U.S., Paris Baguette also has stores in Canada, Singapore, France, Vietnam, and China. Presently, the bakery-café franchise has 4,000 units in the world. As for their menu, Paris Baguette sells cakes, bread, pastries, beverages, sandwiches, and salads.
As a bakery-café chain, it faces stiff competition against Panera Bread, Au Bon Pain, Corner Bakery Cafe.
The franchising process starts by applying on their website. After this, Paris Baguette representatives will contact you to discuss your business plan and proceed with your application. But before we discuss the Paris Baguette franchise cost, know what else is in store when you decide to franchise the bakery-café.
Training
Paris Baguette Family, Inc. (the franchisor) requires an Operating Principal, four food production staff, and, if applicable, a store manager to attend the required training program. There are two types of training: classroom training and on-the-job experience.
For classroom training, it’s held online. Meanwhile, for the on-the-job experience, the franchisor will conduct it in their designated training location.
The number of hours depends on the role. For instance, managers and operators must complete 312 hours of both classroom and on-the-job training programs. As for the bakers and cake decorators, it’s 218 hours. Lastly, for the sandwich makers, it’s 36 hours for both programs.
The franchisor will hold more training workshops within the year and requires the franchisees to attend. It’s an update about new developments. They may also conduct seminars, where a franchisee may not be required to attend.
Territory and Obligations
The franchisor will not set an exclusive territory, but they do grant a limited protected area. However, franchisees should expect that other stores and outlets might be present nearby. However, upon signing the Franchise Agreement (FA), other Paris Baguette stores may not be allowed to operate in the Protected Area set in the FA. In some instances, though, some Paris Baguette stores won’t even have a Protected Area.
As indicated in the Paris Baguette franchise website, they require franchisees to have a site with the following requirements:
- At least 1,800 to 2,500 sq.ft. (patio, preferred)
- Daytime population
- Heavy foot traffic
- Visibility and access to parking
- Recognized area
- Appropriate neighboring stores
Once the FA has been signed, the franchisee must delegate the role of “Operating Principal.” This person should complete the required training program and is responsible for managing and overseeing the store. The franchisor expects the Operating Principal to dedicate their time to their role and have no other business engagements.
In terms of items sold, the franchisor allows approved products for selling. Plus, franchisees must also observe standards that the franchisor has set.
The first franchise term lasts for 10 years. Then, if the franchisee decides to renew, the franchisor may grant two additional five-year periods. It should be noted that the franchisee should have met the requirements in getting those terms.
Paris Baguette Franchise Cost
The bakery-café franchise estimates that the Paris Baguette franchise cost would range from $709,183 to $1,386,292. You also have to note other fees such as royalty fees, marketing fees, and training fees, to name a few.
The franchisor does not in any way provide any financial assistance to any franchisee.
Check the tables below to know how much your initial investment would be and other costs that you’ll have to shell out.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $50,000 | $50,000 |
| Real Estate or Advance Rent and Security Deposit and Other Prepaid Expenses and Costs | $10,000 | $60,000 |
| Building Costs/Leasehold Improvements | $322,026 | $750,000 |
| Equipment and Fixtures | $165,156 | $208,438 |
| Signs | $9,505 | $29,886 |
| Smallwares | $20,570 | $25,000 |
| Point of Sale System, Software and Surveillance Equipment | $13,827 | $19,738 |
| Opening Inventory | $36,000 | $40,000 |
| Grand Opening Promotion | $10,000 | $10,000 |
| Licenses, Permits, Fees and Deposits | $4,510 | $18,710 |
| Miscellaneous Opening Expenses | $11,159 | $12,130 |
| Insurance | $3,405 | $4,890 |
| Attorneys’ Fees and Business Consultants | $3,035 | $7,500 |
| Travel and Living Expenses While Training | $20,000 | $50,000 |
| Additional Funds for First 3 Months of Operation | $30,000 | $100,000 |
| ESTIMATED TOTAL | $709,193 | $1,386,292 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty Fee(s) | 3% of gross sales for the initial 52 weeks of operations; 5% of gross sales for each month thereafter. |
| Marketing Fund Fee | Currently 1% of gross sales. |
| Local Marketing Requirement | Currently 1% of gross sales. |
| Grand Opening Advertising | $10,000 minimum. |
| Additional Site Evaluation Fee | The then-current fee plus the franchisor’s out-of-pocket costs and expenses. |
| Software Fee | $250 to $380 per month. |
| Technology Fee | Currently $50 per month. |
| Late Fees | Lesser of (i) 18% per year or (ii) the maximum lawful rate. |
| Insufficient Funds Fee | $100 per occurrence. |
| Additional Training | The then-current fee plus the franchisee’s costs and expenses. |
| Remedial Training Fee | The then-current fee plus all costs and expenses. |
| Annual Meeting and Conference | There may be a fee not exceeding the franchisor’s actual cost per person incurred in holding the annual conference. |
| Technology Costs | Varied. |
| Transfer Fee | $30,000 flat fee per transfer. Franchisees must also pay the franchisor’s costs and expenses associated with the transfer including training costs, legal and accounting fees. |
| Securities Offering Fee | $3,000 plus the franchisor’s reasonable costs and expenses associated with the reviewing the proposed offering documents. |
| Renewal Fee | 50% of the then-current initial franchise fee. |
| Relocation Fee | 25% of the then-current initial franchise fee plus the franchisor’s costs and expenses associated with the relocation. |
| Management Fee | 10% of gross sales, plus expenses. |
| Product or Supplier Evaluation Costs | Cost of inspection and cost of test plus the franchisor’s administrative costs. |
| Indemnification | Varies per loss. |
| Audit Fee | Cost of audit (including legal and accounting fees) and understated amounts plus interest. |
| Insurance Fee | The franchisor’s actual costs and expenses. |
| Enforcement Costs | Varies. |
| Reimbursement of Costs and Expenses | Varies. |
| Liquated Damages | If the franchisor terminates the FA for cause, or if franchisees terminate it without cause, franchisees agree to pay the franchisor liquidated damages equal to the monthly average royalty fees owed to the franchisor during the 12 months of operation preceding the effective date of termination multiplied by 24. This being the number of months in two full years. Or the number of months remaining in the term of the FA had it not been terminated, whichever is less. |
Did You Know?
- The bakery-café has its own app for customers. Customers can sign up for a Paris Baguette account on their website or app. For every dollar spent, customers will get rewards plus discounts and more! They can then claim their rewards at any Paris Baguette store.
- Paris Baguette also handles catering. They can order online or contact their catering email to process their orders.
- To qualify as a Paris Baguette franchisee, your net worth should be $1 million and have liquid assets amounting to $400,000. You will also have an advantage if you have experience in business, food service, or marketing.
- Paris Baguette observes the “PARIS Culture” mindset. PARIS stands for Passion, Attention, Remember, Important, and Service with a smile. This allows them to provide the best customer experience.
- The Paris Baguette team handling franchising will help franchisees in every step of the way. They have a solid support system and assist in launching a new store. Not only that, they guide new franchisees in marketing and advertising and provide tools and resources as well.