Dempsey Bakery Finds New Owners, Plans for Franchising Under Fowler Family

Chris Fowler, Paula Dempsey, Jamie Fowler and Lexi Fowler at Dempsey Bakery. The Fowlers bought the gluten-free bakery in October with plans to franchise it nationwide. [Steve Lewis]

Family, food and franchising were core ingredients in the recent sale of Dempsey Bakery, Little Rock’s specialist in “allergy-friendly” foods.

Paula Dempsey opened the bakery in 2011 after she and her husband, Demp Dempsey, developed health issues and went gluten-free. She collected recipes and gathered equipment, then started baking in a building they owned at 323 S. Cross St. downtown.

“There was a need out there that I felt like somebody needed to fill, so I guess it was me,” she told Arkansas Business last week.

On the buying side was the Fowler family of Jonesboro: a daughter with nut allergies and a father who spent decades as a highly successful KFC franchisee.

Chris Fowler, now 62, started his career as a teenager at the KFC restaurant his father owned in Jonesboro.

He built up the business over the years and sold Fowler Foods’ stake in 90 KFC stores in December 2021. Similar sales and industry trends at the time suggested that the deal was worth north of $100 million.

Fowler’s youngest daughter, Lexi, seized the recent chance to get her family back in the food business. She discovered Dempsey Bakery as a little girl with a tree-nut allergy. And after college, she discovered that Paula Dempsey was looking into franchising.

Lexi took an idea to Dad. Could she run her own specialty bakery?

‘You Ought to Do It’

“She called me to ask what I thought,” Chris Fowler said in a telephone interview. “And I thought, you absolutely have a passion for people with allergies. I support you 100%. You ought to do it.”

Paula Dempsey offered an alternative. “Paula said, well, instead of franchising, why don’t you just buy it off?” Fowler said. “She had already done some legwork on the franchising, so we worked out a deal and that’s our plan.” The Fowlers plan to put Dempsey Bakery locations in markets across the country.

The financial terms are confidential, but Dempsey said the sale included her approximately 15,000-SF building and all the bakery’s recipes and equipment, as well as the franchising opportunities. The current bakery occupies about 10,000 SF of the downtown building and includes two large walk-in style rotating ovens, big Hobart mixers, spacious work tables and a huge adapted freezer.

Dempsey called the site’s elbow room rare and valuable, with significant potential for expansion and increased commercial production. Beyond individual customers, Dempsey Bakery sells to Performance Food Group, Sysco, Tankersley Foodservice and various local restaurants.

The menu ranges far beyond breads and cakes. There’s a daily lunch menu of soups and sandwiches, as well as desserts, cupcakes, cookies, sweet breads and even mixes for baking at home. Products are gluten-free, soy-free and peanut- and tree-nut-free. Some products are egg- and dairy-free.

Chris Fowler said the proof was in the tasting, and Dempsey’s flavors sealed the deal. “We tried her food,” he said. “My daughter’s been eating it for 12 years, but I hadn’t really had that much. But tasting the bread and the other products the bakery produces, we were blown away with how great-tasting it was.”

Dempsey to Consult

The deal calls for Dempsey to stay on as a consultant for three years.

“We wanted to keep her on a part-time basis to help with some recipe innovation or to answer any questions we might have,” Fowler said. “She poured her heart and soul into this bakery over the years.”

Plans call for retaining staff members who want to stay, Fowler said, including two longtime managers and two bakers. Baking talent is especially important in a specialty operation like Dempsey’s, she said.

“I developed [the bakery’s menu] with a baker, and I created some of the recipes myself at home,” Dempsey said. “But I’m not a baker. Amping it up to a level where we might make 16 to 25 loaves of bread at a time, I don’t know how to do that. But I hired good people. … The bakers have only been with us a year, but they plan on staying on.”

Lexi Fowler has been working at the bakery daily since the sale, learning every job.

“There’s a pretty big learning curve, because it’s not like a normal bakery,” Dempsey said. “But it can be taught, and we’ve got it down to a very specific science. They bought all the recipes, but you have to learn the techniques to use with the recipes.”

The Fowlers hired a chief operating officer, Melissa Johnson, to learn the intricacies and help franchise the bakery.

“She was a 33-year veteran with KFC Corp. and had worked on both the company operation side and the franchise side,” Chris Fowler said. “She has a wealth of knowledge and a wealth of experience, and she’s already on board with us and absolutely loving it.”

Lexi Fowler will be the first franchisee, somewhere in northwest Arkansas, her father said. She plans to keep working in the Little Rock bakery until she has her own location.

“We’re working on getting all the paperwork, to get well acquainted with the operation, so that we can present it to people in a franchise model,” Chris Fowler said. “That’s our goal, in six to nine months, to be in a position to start franchising. We will be in northwest Arkansas with the first one.”

The starting plan is regional, he said, “but we truly hope to go nationwide within the first three to five years.”

It’s an aggressive approach, Fowler admits. “But once people taste the food and we show them a good business model for them,” they will want on board, he said. “It tastes great, it provides a service for people, and it’s just an incredible business. After 47 years in the franchising business on the franchisee side, it’s going to be very interesting to be on the franchisor side.”

Third Generation

Lexi Fowler will be the third generation of her family in Arkansas food franchising. Chris Fowler’s father, Wallace, built a single KFC franchise into a fleet, and then extended his success into banking. The Fowlers owned stakes in seven Arkansas banking companies, including Liberty Bank of Arkansas and Liberty Bancshares. In 2013, the family was involved in a $300 million deal to merge Liberty Bank with Home Bancshares of Conway.

Wallace Fowler, an Arkansas Business Hall of Fame inductee, died in 2022, just two weeks after the death of his wife of 65 years, Jama.

Lexi is “very excited” to extend the Fowlers’ long history in food franchising.

After graduating from Oklahoma City University in December 2023, she moved to Fayetteville and took a few months off to find her direction. She’d been consuming goods from Dempsey since she was about 10 years old, she said. “There was not much gluten free or especially nut-free up in northwest Arkansas, so I wanted to open up a bakery. I started talking to Miss Paula, and the opportunity to buy it came up.”

At 23, she said she doesn’t know what the future holds, but Lexi hopes Dempsey Bakery grows far and wide. “We want to make sure that everyone has access to food they can eat. That starts with going to northwest Arkansas and hopefully being able to expand past that.”