Bakery London - State of the Market in London

09/09/2018 15:00 | Start a business

Bakery london

London is one of the biggest baked goods markets in the UK and home to some incredible independent and franchised bakeries. If you're looking to open up a baked goods franchise in the capital, there are several franchises to choose from, all of which occupy their own niche. Here, we take a look at the state of the industry in general, what's happening in London, and which bakery franchises offer the best value for money on your investment.

The bakery industry

The UK bakery industry constitutes one of the largest markets in the food industry. While the bread market alone is worth around £3.6 billion, the entire bakery goods market generates annual revenue of £8 billion. Employing approximately 80,000 people and having grown at a rate of 2% each year for the last five years, it can be considered a stable industry that plays a vital role in the UK economy. Concerns about health and the rising levels of obesity in society have resulted in innovative product development and ensure bakeries will have to continue adapting to survive.

Bakeries in London

In London, the industry encompasses a wide variety of stores and types of retailer. Traditional bakeries play an essential role in many areas, while the supermarkets have also snapped up a significant market share. Franchises often focus on speciality goods, such as doughnuts and waffles. While small, independent bakeries and patisseries are particularly popular when it comes to fresh bread and pastries, the big name brands are popular as an all-day snack or an alternative to meals. These businesses are spread throughout the capital, with their distribution heavily influenced by the socio-economic demographics of the city. When it comes to bakery London is a diverse and exciting city with plenty of opportunities.

Independents vs franchises

One of the most significant divisions in the baked goods industry is the split between independents and franchises. However, the two types of store aren't in as direct competition as it seems. The independent category tends to include artisanal stores that specialise in baked goods - sold at a relatively high price - and are often influenced by continental bakeries. On the other hand, franchises tend to specialise in a single type of good and are likely to be an import from the US or other important international markets.


Cinnabon was established in 1985, as a father and son business that aimed to make the greatest cinnamon roll on the market. The first store was opened in Seattle, and the business soon spread across the US, finding particular success in shopping centres and as part of larger retail spaces. It has now expanded internationally and is looking for suitable franchisees to open new locations in the UK.

Prospective franchisees will need to raise a total of £139,200 if they want to open their own unit. There are two franchising options available to investors the in-line store or the takeaway kiosk. Cinnabon looks for individuals with expertise in the real estate market, as well as business management and marketing.

In return for your investment, franchisees will be provided with high-quality training and supported throughout the setup process. The central franchising team at Cinnabon are one of the most experienced in the baked goods industry and will be able to provide excellent guidance and assistance from your first moment as a franchisee to your last.


Though the original Wafflemeister business was founded in 1999, the waffle recipe it uses can trace its origins back 50 years, to the founders secret family recipe. Since 2000, the business has focused on bringing its famous Belgian waffles to customers around the world, with a particular emphasis on European and the UK markets.

To become a Wafflemeister franchisee, youll need to raise anywhere between £100,000 and £220,000. Wafflemeister offers franchisees the opportunity to open either a kiosk or in-line store, with the cost varying depending on the size and style of the store. The franchise charges a 5% +VAT management service fee, as well as 1.5% +VAT marketing fee.

In return for your investment, youll receive assistance with shop construction and fitting, recruitment, and marketing. Franchisees will be trained to meet the standards expected by the central franchisor and will have access to a dedicated franchise liaison executive.

Dunkin Donuts

Finally, Dunkin' Donuts is one of the most reputable big name brands in the baked goods industry. Specialising in fresh coffee and glazed doughnuts, it's built a cult following for its products and has opened shops in a large number of international markets. Founded in 1950, by William Rosenberg, the business quickly expanded beyond its home state of Massachusetts and set up stores around the US. Today, it's a truly global franchise.

To become a Dunkin' Donuts franchisee, you'll need access to liquid assets worth around £1,200,000 and a net worth of roughly £2,300,000. While this may seem like a particularly substantial investment, the Dunkin' Donuts brand is so well known that their franchise stores can easily command such a price.

In return for your investment, franchisees receive help creating their Dunkin Donuts stores, as well as marketing, management, and operations guidance. All franchisees are put through an extensive training regime and fully prepared for their future role. The majority of training is delivered via classroom lectures and e-learning resources, though there are also some residential courses to attend.

Other franchises

Though we've only focused on three of the largest baked goods franchises operating in London, there are many other franchises to consider. These include Bagel Corner and Baguette Express, amongst others. However, both of these franchises could also be considered sandwich franchises and have more diverse interests than those bakery franchises we've chosen to take a look at here.

The UK capital is home to a large number of bakeries and a variety of franchising opportunities. The three franchises we've examined here are all high-performing businesses with excellent brand reach. If you're considering opening a franchise in the sector, they should be the first franchises you take a look at.

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