Cobs Vs Franchised
Figure 1 and 2 sheds light on the reasons behind Bakers Delights decision to offload unprofitable Company Owned Bakeries (COBs) after 2004. A large number of these failing businesses were on sold to franchisees, most bankrupted today from purchasing COBs bakeries. This course of action has the added benefit of buying back the businesses from the bankrupted franchisee at a bargain price and onselling for a massive profit. A new franchisee buys the doomed business and the cycle is repeated. As Bakers Delight saturates the market and profits decline this is has proved to be a very lucrative strategy of returning profits to Bakers Delight shareholder
Figure 1
Figure 2
Information source from the IBIS World report on Bakers Delight Holdings
