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With new criteria are they legit now ?
If the bakery is not a generic one based on a company with multiple stores and acts like a local hotspot, bakeries are eligeble. But even if they are, they are pretty hard to get through the review. They normally get rejected cause of generic business. I personally would not upgrade such nominations^^
how to proof they are local business ?
Maybe via weblinks (if existing)?
Try it and you will know it, I guess
What about a local bakery that has 3 or 4 stores... All in the same town...
Will having more than one location make it ineligible?
3-4 in the same town I would say you may get 1 approved most likely the original location but you wont get them all.