How Profitable is a Bakery? Data From 12,900+ US Bakeries

As of 2024, there were approximately 31,000 bakeries in the United States, representing a total market size of $33 billion. But how profitable are bakery businesses? How much investment is required to start one? And what is the average turnover for a bakery?

In this study, we analyze the financial data from over 12,900 real bakeries in the United States to provide you with accurate, up-to-date answers to these questions.

The data, sourced from 2024, includes revenue, costs, and profit data from the largest 20 bakery franchises in the US, representing a total of 12,900 bakeries.

Whether you’re considering starting your own bakery business or seeking to understand the financial dynamics of the industry, this article offers a detailed look at the key factors that influence profitability and return on investment.

We’ll be exploring several key questions:

  • How Much Revenue Does a Bakery Make?
  • How Profitable are Bakery Businesses?
  • How Much Does It Cost To Run a Bakery?

How Much Revenue Does a Bakery Make?

Looking at the real data from 12,900 bakery businesses, we found that bakery businesses make $944,084 per year on average.

Whilst some bakeries make on average about $116,000 in yearly revenue, some franchises reach up to $2,202,000 in yearly revenue:

FranchiseNumber of LocationsAverage Yearly Revenue
Krispy Kreme368$819,000
Great American Cookies354$525,000
Pretzelmaker144$453,000
Einstein Bros. Bagels379$1,020,000
Hurts Donut Company20$946,000
Nothing Bundt Cakes443$1,338,000
Rocky Mountain Chocolate Factory157$525,000
Schlotzsky’s Bakery Café323$994,000
Randy’s Donuts13$1,387,000
Duck Donuts111$570,000
La Madeleine87$2,202,000
Tous les Jours86$1,355,000
Le Macaron French Pastries55$119,000
Dirty Dough Cookies13$189,000
DonutNV17$116,000
Dunkin’ Donuts8,118$1,079,000
Weighted Average12,884$944,084

The factors impacting revenue

The differences in average revenue among bakery franchises can be attributed to the following main factors:

Location and Market Demand:

  • High-Traffic Areas: Bakeries in busy city centers, shopping malls, and tourist attractions generate higher revenues due to increased foot traffic.
  • Local Market Demand: Areas with higher demand for bakery products or a strong bakery culture lead to higher sales.

Brand Recognition and Customer Loyalty:

  • Established Brands: Well-known brands with strong customer loyalty see higher revenues as customers choose familiar and trusted names.
  • Marketing and Promotions: Effective marketing strategies and promotions significantly boost a bakery’s revenue.

Product Range and Quality:

  • Variety of Offerings: Bakeries with a wide range of high-quality products, including specialty items and seasonal treats, attract more customers and encourage repeat business.
  • Customization and Special Orders: Offering customized cakes, pastries, and baked goods for special occasions increases average revenue per sale.

Pricing Strategy:

  • Competitive Pricing: Setting prices that reflect product quality while remaining competitive attracts a larger customer base.
  • Premium Pricing: Some bakeries adopt a premium pricing strategy for gourmet or specialty items, contributing to higher revenues.

How Profitable are Bakery Businesses?

Looking at the data from the 9,600 bakery franchised businesses that do report cost and profit metrics, bakeries report on average a 14.6% operating profit margin.

Operating profit margin indicates the profitability after accounting for all operating expenses but before taxes and interest.

This table presents the key profit metrics for the selected bakery franchises:

FranchiseCOGS %Gross Margin %Staff %EBITDA Margin %
Great American Cookies25.3%74.7%26.7%
Pretzelmaker21.8%78.2%28.3%
Einstein Bros. Bagels26.7%73.3%27.6%15.1%
Nothing Bundt Cakes25.1%74.9%26.7%22.2%
Duck Donuts23.2%76.8%23.5%
La Madeleine29.0%71.0%29.4%6.4%
Dunkin’ Donuts25.3%74.7%24.5%
Average25.2%74.8%26.7%14.6%

Bakery Operating Costs

We’ve seen that on average a bakery has a ~15% profit margin, but what are the different operating costs associated with running a bakery?

Here is a simple table detailed on average how much you would spend as a percentage of revenue for each main operating expense:

Cost CategoryPercentage of Revenue
COGS25.2%
Staff26.7%
Rent10.0%
Utilities5.0%
Marketing5.0%
Other Operating Costs13.1%
Profit Margin15.0%
  • COGS (Cost of Goods Sold): This includes the cost of raw materials, ingredients, and packaging used in producing baked goods. It also encompasses any waste or spoilage.
  • Staff costs: Salaries, wages, and benefits for employees, including bakers, sales staff, and administrative personnel. This also covers payroll taxes and any staff training expenses.
  • Rent: The cost of leasing retail and kitchen space for the bakery. This can vary greatly depending on the location and size of the premises.
  • Utilities: Expenses for electricity, gas, water, and other utilities necessary to operate the bakery. This includes costs for heating, cooling, and powering equipment.
  • Marketing: Costs associated with advertising and promotions to attract customers. This includes online marketing, print ads, promotional events, and loyalty programs.
  • Other Operating Costs: Miscellaneous expenses such as insurance, maintenance, supplies, and equipment repairs. This also covers administrative expenses and any other overhead costs not classified under other categories.

Example of the Profit-and-Loss of a Bakery

Here is the profit-and-loss of Einstein Bros. Bagels company-owned bakeries earning about $600,000 to $1,230,000 in yearly revenue on average, and reaching 16.4% to 20.9% of operating profits as a percentage of revenue:

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