Expansion a piece of cake
You might have seen them lurking about the office, irresistible saboteurs of your best intentions.
They’re bundt cakes, baked to a rich finish and drenched in a buttery cream-cheese frosting. And they’ve meant big business for Nothing Bundt Cakes, a 10-year-old company that has sold hundreds of thousands of the treats as gifts for local companies and consumers.
Friends Dena Tripp and Debbie Shwetz launched Nothing Bundt Cakes out of a single location on West Sahara Avenue after the two realized that Tripp’s cakes would pair perfectly with Shwetz’s icing. They hoped early on to reach $500 a week in sales.
“Our expectations were really low,” Shwetz said.
Nothing Bundt Cakes now averages more than $1 million a year at its stores on Sahara and South Eastern Avenue. That success has spurred the first Nothing Bundt Cakes franchises, which opened this year in Dallas; Reno; Scottsdale, Ariz.; and Poway, Calif. The company plans to roll out several more franchises in 2008.
A national expansion wasn’t always assured for Nothing Bundt Cakes. Tripp and Shwetz struggled early on to find a market segment that would fit their business.
The partners initially targeted the nuptials market, pitching their bundts as alternatives to traditional wedding cakes. But the saturated niche proved difficult to enter. So Tripp and Shwetz went instead for a one-stop party shop, supplying paper plates, napkins, cups and tablecloths that matched their cakes. That plan fizzled when the owners saw customers continually hitting up party-supply stores for paper goods, and stopping by Nothing Bundt Cakes afterward to pick up dessert.
Thus came the company’s permutation into the business it is today: a “bundt boutique” specializing in cake-centered gift packages with extras such as balloons, T-shirts, keepsake picture frames, vintage tins and glass cake platters.
“We just felt we would keep it simple and do what we do best, which was focusing on the bundt cakes,” Tripp said. “Plus, it was unique, a one-of-a-kind concept.”
That concept starts with the product. The cakes come in three sizes, ranging from individual “bundtlets” to 10-inch cakes, with prices ranging from $3.99 to $39.50. The chocolate-chocolate chip cake is an especially brisk seller, though the pumpkin spice, white chocolate-raspberry, marble, pecan praline and white-white chocolate varieties are popular as well. Themes run from the simple — a single, giant flower at the cake’s center — to the sophisticated, such as the Mardi Gras bundtlets the bakery made for the Rio and adorned with small feathers and masks.
About half of Nothing Bundt Cakes’ sales volume comes from individual consumers who enjoy serving the cakes on special occasions or giving them to their kids’ teachers.
The remainder consists of corporate business — local companies buying bundt packages to thank employees, vendors and clients. From Thanksgiving to Christmas, Nothing Bundt Cakes will sell around 7,000 bundts to area businesses. Their clients include attorneys, government employees, court reporters, mortgage companies, hotel-casinos and countless service businesses. U.S. Sen. John Ensign has sent the cakes to campaign workers, and Rep. Shelley Berkley orders bundts for her Washington, D.C. office. Cirque du Soleil, Celine Dion and Danny Gans are also customers.
Tripp and Shwetz are planning 15 franchises a year for the next five years, capping out at about 75 franchises. They’ve had no trouble finding franchisees, with requests to license the stores coming from all over the country, but the partners have insisted so far on checking expansion so they can ensure each location is managed and supported properly before it opens.
Terry Hill, a spokesman for the International Franchise Association, said demand is usually high for franchises that bring a new or different product to the marketplace. And Las Vegas’ status as a tourism destination should also help Nothing Bundt Cakes, giving the company exposure to potential customers and franchisees nationwide, he said.
But any new franchise can ruin its long-term growth prospects if it branches out too quickly. Hill said Nothing Bundt Cakes has some factors in its favor: Because it’s established, the company has “probably worked quite a few of the bugs out of its system,” he said. Also, its relatively modest target of 15 stores a year seems manageable.
Nothing Bundt Cakes is readying franchises in Salt Lake City; Seattle; Denver; Pleasanton, Calif.; Thousand Oaks, Calif.; and Tucson, Ariz.; with plans for locations in Albuquerque, N.M., and Rancho Cucamonga, Calif. The company will head toward the Midwest and the East Coast once Tripp and Shwetz are satisfied with their Western presence.
There’s one American city, though, that won’t see any Nothing Bundt Cakes franchises.
“We’re not selling any franchises locally, because this is our market,” Shwetz said. “We worked really hard to get it going, but we would not be where we are today without our customers. The Las Vegas community has been so supportive of us.”
