My friends have started a cupcake company across the country, and have presented mm brother and I the opportunity to expand and sell their cupcakes in california. I dont bake, but the cupcakes are unique and I think this would be an awesome opportunity. In order to do so, I need to find a bakery that would be willing to make our specialized cupcakes. I was wondering if anyone had any advice for me as I am looking for a bakery that can make specialized cupcakes or what precautions I should take. Anything would help and thanks in advance!
I believe your friends offered you and your brother the chance to open a franchise-model shop because they want you to bake their recipes and sell by their model. They are offering "franchises" to the friends that they trust to NOT screw them in the open market.
They are giving you a $200,000-$500,000 leg up by not requiring that normal franchise fee. They will NOT accept a third party baking their recipes because there is no protection against that bakery selling these special recipes under their own name.
You could learn to bake and decorate cupcakes in a 6 month community college continuing education plan. That gives you baking skills without the full 9 yards of bread-pies-etc. Your friends should be the ones to teach you the store management skills.
If somebody made me this kind of offer I would move across the country to take it.
If you don't have business experience, this will be hard for you even if you bake yourself. Even under the best of circumstances, a model will be hard pressed to support a middle man. This is why I questioned experience.
A franchise of one store across the US will not carry enough clout in the new area to overcome these costs.
You could hire a baker for less than a subcontractor.
Are you sure you know what you are doing? Have you done a business plan that supports this? Have you done one at all?
Also, be prepared for at least $100K in cash (I'm sure that number is double, triple, quadruple, in CA), no loans available, for buildout. With these staggering costs, I don't get it.
I'm sorry if I sound like I'm raining on your parade, but from your post, I'm not sure there is a completed plan. Looking for a subcontractor is what you do after you do the business plan, completely, and know that the business can support it. A business plan for this type of model will take months to complete.
I wholesale to a company and if this was it's only source of income, the relationship would not be viable. They have other income-producing products and mine is just part. A good baker is going to make a very good profit, even on wholesale, leaving little but enough to support the square footage used by the cupcakes. Cupcakes, cake balls, cookies, and other retail counter items are usually impulse buys or marketing bait to get more customers into the establishment.
If the products are specialized or unique, a premium wholesale price would likely be encountered, causing the model to lack viability.
Also, in big cities, be prepared for a good thing or unique style or flavor, to be duplicated, and probably better, by a competitor, almost immediately. You will need to know that the investment can handle that.
I realize how exciting this sounds. But I suggest you begin by working with them in their shop. The daily reality will teach you a lot about business and if this is the right move for you.
Also, how long have they been in business? Do they have prior business experience? The key word here is Business not Cupcakes. I hope you think about this before making any decisions. Best of luck to you!