BackWerk is Germany’s leading franchise system in the self-service bakery and quick service food market. The company has over 340 stores in the European German speaking region and all are franchises owned and operated by over 250 franchise partners.
The company was founded in 2003 by Dr. Hans-Christian Limmer and Dr. Dirk Schneider who pioneered in the business concept of self-service discount bakeries in Germany. The two founders remain significant shareholders in BackWerk alongside EQT.
The original business model has been transformed from a pure discount bakery concept to a convenience food offering and today the stores carry a range of bakery products, beverages, sandwiches and hot and cold snacks for immediate consumption in the store, at the office or on the move and additional bakery products for the at-home market.
In 2016, system sales amounted to EUR 209 million. BackWerk’s primary focus is Germany and Austria, but the company is also active in other markets such as Switzerland, Netherlands, United Kingdom and Central and Eastern Europe.
Market trends and drivers
Self service bakery stores account for only around 2% of total number of bakery stores in Germany. The coffee shop and bakery segment is expected to be the fastest growing out-of-home segment in the next few years. Drivers for the out-of-home market include increased commuting, an increasing share of single person households and changing consumption patterns with a lower frequency of at-home breakfasts and a higher frequency of out-of-home consumption during the week as well as during weekends.
The key reasons for EQT’s investment in BackWerk were the attractive market development and BackWerk’ leading market position in the self-service bakery segment. The business model is flexible with outsourced product supplies, which allows for a quick adjustment to changing consumer trends. The brand is also very strong and attractive to potential franchise partners.