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Sprinkles Cupcake
Sprinkles Cupcakes franchises bakeries that feature handcrafted cupcakes, cookies, brownies, and other premium baked goods prepared according to proprietary recipes, system standards, and procedures. Franchisees operate either Production Bakeries, which produce proprietary mixes, or Pantry Bakeries, which source mixes from approved Production Bakeries, and must provide delivery services. The business model involves selling these desserts to the general public in a competitive market with other local, regional, and national bakeries.
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Franchise Costs
5% royalty + 2% brand fund + $300/mo web platform fee
Financial Performance
Item 19 Financial Performance
Data Based On: Data based on 18 affiliate-operated Sprinkles Cupcakes Bakeries ('Covered Bakeries') open for the full 2023 Fiscal Year. Gross Sales are for all 18. Gross Profit, Controllable Profit, and EBITDAR are weighted averages from 8 of these 18 bakeries (4 Stand-Alone and 4 Texas Tandem).
* Weighted average gross revenue calculated from 3 tiers of 6 bakeries each: (6 units × $2,512,665 + 6 units × $1,798,454 + 6 units × $1,277,550) / 18 total units = $1,862,890 Median gross revenue taken as the median of the middle third segment: $1,795,788 Revenue top quartile taken as the average of the top third segment: $2,512,665 Revenue bottom quartile taken as the average of the bottom third segment: $1,277,550 Weighted average gross profit calculated from 4 Stand-Alone Bakeries and 4 Texas Tandem Bakeries: (4 units × $1,437,163 + 4 units × $1,500,744) / 8 total units = $1,468,954 Weighted average net profit (Controllable Profit) calculated from 4 Stand-Alone Bakeries and 4 Texas Tandem Bakeries: (4 units × $587,485 + 4 units × $601,515) / 8 total units = $594,500 Weighted average EBITDAR calculated from 4 Stand-Alone Bakeries and 4 Texas Tandem Bakeries: (4 units × $403,777 + 4 units × $403,307) / 8 total units = $403,542 EBITDAR margin calculated as weighted average EBITDAR ($403,542) / weighted average gross sales for the 8 bakeries ($1,887,393) = 0.214 Estimated profit range using the overall average gross revenue of $1,862,890 and the range of EBITDAR margins (20.6% to 22.2%) from the Stand-Alone and Texas Tandem Bakeries. Low estimate: $1,862,890 * 20.6% = $383,755. High estimate: $1,862,890 * 22.2% = $413,562.
Extracted Item 19 Section
Avg. Revenue: $1,862,890
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Unlock financial performance dataSprinkles Cupcake Franchise Analysis
Sprinkles Cupcakes entered franchising just three years ago with a proven corporate model of premium baked goods, but its franchise side remains a speck amid fierce bakery competition. Item 19 financial disclosures reveal standout revenue performance across scant units, countered by a puzzling zero EBITDA margin that screams deeper operational scrutiny. Can this high-end dessert brand deliver profits worth the steep entry, or is rapid growth masking thin margins—unlock to see the full story.
Item 7 in the 2024 FDD pegs total initial investment at $725,000-$1,310,000, including a $40,000 franchise fee, driven by buildout for either Production Bakeries (making mixes) or Pantry Bakeries (sourcing them) plus mandatory delivery setups. Ongoing fees hit 5% royalty, 2% brand/ad fund, and a $300/month web platform charge—standard for food but the web add-on nibbles extra. Item 19 shines with average gross revenue of $1,862,890 and median $1,795,788 across four units, yet average EBITDA margin clocks at 0%, while estimated owner profits range $383,755-$413,562 (implying ~22% after expenses/owner salary). These figures suggest top-line strength from premium pricing, but razor-thin profitability flags high costs in labor, ingredients, or delivery—critical for food franchises where margins often squeeze below 15%.
System health shows promise with 300% franchise growth (1 unit in 2022 to 4 in 2023) backed by 20 corporate stores, signaling brand viability since 2021. However, the minuscule franchise base (just 4 vs. category norms of dozens for maturing systems) amplifies risk—no broad validation of scalability. One SBA loan on record at $1,080,000 average hints at capital intensity but low default flags. For investors, high revenues tempt, but zero EBITDA and newness demand caution: prioritize delivery logistics and mix production model in due diligence, as contraction in bakery trends could stall this Austin-based contender.
Analysis based on the 2024 Franchise Disclosure Document. All figures should be independently verified before making investment decisions.
How Sprinkles Cupcake Compares
Key Insights
- Higher investment than 82% of Coffee & Bakery franchises
| Franchise | Investment | Fee | Royalty | Locations |
|---|---|---|---|---|
Sprinkles Cupcake Current | $725K – $1.3M | $40K | 5.0% | 4 |
| PANERA BREAD BAKERY-CAFÉ | $633K – $4.9M | $35K | 5.0% | 1,112 |
| SCOOTER'S COFFEE | $1.2M – $1.3M | $40K | 6.0% | 882 |
| NOTHING BUNDT CAKES | $667K – $1.0M | $45K | 6.0% | 643 |
| GREAT AMERICAN COOKIES | $341K – $463K | $25K | 6.0% | 395 |
| 7 BREW | $894K – $2.2M | $35K | 4.5% | 297 |
Coffee & Bakery Average 39 franchises | $489K – $1.1M | $39K | 5.5% | – |
* Comparison based on latest FDD filings. Investment ranges from Item 7, fees from Item 5. Showing top 5 of 39 Coffee & Bakery franchises by location count.
Locations & Growth
Outlet Growth Over Time
Total outlets at end of each year
Geographic Distribution (2023)
Outlets by state across the United States
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Unlock location growth dataSBA Loan History
Historical SBA 7(a) loan data for Sprinkles Cupcake franchisees (2024 – 2024)
Loans by Year
SBA 7(a) loan activity over time
* Data sourced from SBA 7(a) FOIA loan records. Default rate calculated from charged-off loans.
1 SBA loans on record
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Unlock SBA loan historyFranchisee Contacts
5 franchisee contacts on file from official FDD filings.
5 Contacts Available
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Unlock contactsDue Diligence
Litigation (Item 3)
Bankruptcy (Item 4)
System Health (Item 20)
Franchise system changes reported in the most recent fiscal year
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Unlock due diligence reportsFrequently Asked Questions
The total initial investment to open a Sprinkles Cupcake franchise ranges from $725,000 to $1,310,000. This includes a franchise fee of $40,000. Ongoing royalty fees are 5.0% of gross sales.
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