H & R Bakery Owners Continue Search for Next Owner of Beloved Salem Business

When you think of H & R Bakery, you might just think of it as a small town establishment. However, it truly goes above and beyond small town expectations, and has become one of the most renowned bakeries in the Midwest.

H & R Bakery began its residency in Salem under a slightly different name: Warren’s Sweet Shop. Established in 1946, it was owned and operated by Warren and Miriam Mahuron until Warren was called to serve in the Korean War. In 1950, Warren’s Sweet Shop was purchased by Harry and Rowena Misamore, and the name was then changed to H & R Bakery (H for Harry and R for Rowena). Harry and Rowena eventually passed the business down to their son Robert and his wife Lula until January of 2000 when it was acquired by Dwayne and Juanita Daugherty. For the last 25 years, the couple have made tremendous improvements to the business, but they have come to the conclusion that they have grown too old to keep running the bakery for much longer. So, they have decided to sell the business.

“There were some tears when we decided we needed to sell the bakery, and it’s still emotional today. It’s rough,” said Dwayne Daugherty. “Salem means a lot to us, and our customers do as well. We weren’t fortunate enough to have children, so our employees and the business itself have been our family. It’s been a very hard decision. A lot of people in life just want to retire, but not when you’ve really dedicated your life to something. In a sense, I kind of feel lost. I know that I need to get it sold because I want it to continue on and I’m too old to do so, but it’s very emotional.”

The Daughertys explained that it was quite an uphill battle for the first year after they acquired the bakery. Everything ranging from broken down equipment to a dilapidated building proved to be hurdles in the beginning, but they were able to persevere and build H & R Bakery into something bigger and better.

“[The bakery] was on its last leg,” said Juanita.

“It really was. We knew they had a good product, but as far as the building goes, it was in really bad shape,” added Dwayne. “As a matter of fact, [Robert Misamore] fell into bad health, which we didn’t know about at the time, but it was right around the time when we began to negotiate a price to take over the bakery… I guess you could say we kind of duct taped it along until we could get some new equipment. The first year or so was quite a challenge.”

Not long after the Daughertys purchased the bakery, the original building underwent a complete remodel, and things such as heating and air conditioning, cooking ventilation, and equipment replacement were a main focus in getting the business back on its feet and beginning to grow. Their success eventually allowed them to open a second location in Mitchell, Indiana under the name Huckleberry’s Bakery in 2010. Just five short years later, the Daughertys purchased the Murphy’s department store building on the Salem Square. After nearly four years of renovation, the new location was ready to open in 2019 as the H & R Bakery that Salem currently knows and loves.

It is not only Washington County residents that hold H & R near and dear to their hearts, but the bakery has fans all across the country as well. The Daughertys even found a fan in one of the most unlikely of places.

“We have people that come all the way from Chicago, Indianapolis, and Louisville,” Dwayne said. “And that's very flattering, but it’s also a lot of responsibility because we’re getting ready to retire but want to see it continue. And not just for us, but for the community. I’ve always said we’re the caretakers, and I really believe that. Years ago, we went on a vacation to Essex, Montana just to kind of get away from everything. At that time, it had a population of like 54 people. We were in a restaurant, and a gentleman and I struck up a conversation. He was curious about what we did for a living, and I told him we owned a bakery in Indiana. He said, ‘Where in Indiana?’ and I told him Salem. He said, ‘Would it happen to be H & R Bakery?’ That just totally blew me away. Here I am out in the middle of nowhere, and this guy knows H & R Bakery.”

A large part of that nationwide recognition simply comes down to the quality of the items they provide to the community.

“Something that I feel sets us apart from other bakeries is the quality of our product,” said Juanita.

“Yes, that’s a really big part of it,” added Dwayne. “We still do things the way we were taught by the previous owners, and the way they were taught by their parents. There are so many shortcuts you can take now with technology, but at the end of the day, the technology still has not caught up with our ultimate quality in the end. Doing things from scratch still is ahead of the game. That’s not to say technology isn’t getting better. There are some frozen items that are very good, but I think that’s a big thing.”

If there is one thing that cannot go unnoticed when you step foot into H & R, it is the vast collection of model trains and similar decor. As it turns out, model trains have always been a passion of Dwayne’s.

“Model trains are just something I have enjoyed all my life ever since I was a little kid,” said Dwayne. “As a matter of fact, the very first model train that my mom and dad got me is displayed here in the bakery. I got that train the Christmas of 1968, and that’s when it all got started. It’s my addiction I guess you could say, and I just love them.”

The Daughertys are now looking to sell the bakery and enjoy retirement life, and they concluded with a few words of encouragement and spoke about how the bakery has given them a good life.

“The bakery has made us a good living,” said Juanita.

“Yes, that’s a great way of putting it,” chimed Dwayne. “We’ve been able to have a good life and do things we weren’t able to do at one point. If I would like to have a steak dinner, I can go and have a steak dinner and not think much about it. There was a point in my life, especially early on, where there were a lot of things we just couldn’t do. We grew up very poor, but this bakery does provide you with a good living. It’s like raising a child. That child could turn out to be really good or really bad. It’s all in what you want to invest in it, and how much time you want to put into it.

“If there is anybody out there, don’t be afraid to approach us and leave your name and number if you have a real interest in the bakery,” he continued. “We’re willing to think outside the box in terms of selling it for someone to take over. I think sometimes people become afraid because – and I don’t want to toot my own horn – but what we’ve built is pretty impressive. You’re probably not going to find a bakery on this level in Southern Indiana or Northern Kentucky, so it can kind of become intimidating. It does take some financial investment, there’s really no way around that, but a lot of it is how dedicated they are. And they’re the only ones that are really going to know that. Are they willing to sacrifice and work hard? I do have the fear that people may be afraid to approach us because it all may seem insurmountable. But yes, we are willing to think outside the box for the simple reason that we do want to see it go on. If I have a nightmare at night, it consists of me driving around the square looking into H & R Bakery, and it’s dark inside. Everything is closed up, chairs are on top of the tables, and it’s shut. That scares the hell out of me just thinking about that.”

“We had an analysis done by our accountant,” added Dwayne. “The actual value of the bakery comes out to $1.5 – $1.75 million. What we have found is that it’s still a pretty big mountain to climb for the average person. So, what we have done is lately we’ve been coming up with ways to lower that price. For example, we had an automated line that we haven’t used since COVID, so I sold that. And we’re looking at some other options to be able to bring that cost down to make it more possible for people. What we’re getting ready to ask is $950,000. So, we’ve brought it down drastically. We’re hoping that people will come and at least sit down at the table. We’ve got a couple potential buyers that we’re in talks with, and I think that could make a big difference. And of course, we’re still willing to negotiate that price.”