What business risks does Nothing Bundt Cakes acknowledge are associated with purchasing a franchise?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
VE FRANCHISEE**
| Signature: | Date: | |
|---|---|---|
| Name: |
EXHIBIT J TO THE DISCLOSURE DOCUMENT FRANCHISEE DISCLOSURE ACKNOWLEDGMENT STATEMENT
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE OFFER OR SALE OF THE FRANCHISE IS SUBJECT TO THE STATE FRANCHISE DISCLOSURE LAWS IN THE STATES OF CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE FRANCHISE IS TO BE OPERATED IN, OR IF YOU ARE A RESIDENT OF, CALIFORNIA OR MARYLAND.
As you know, NBC Franchisor LLC (the "Franchisor") and you are preparing to enter into a Franchise Agreement for the establishment and operation of a "Nothing Bundt Cakes" Bakery. The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor ("Broker"), that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, the franchisor acknowledges that purchasing a franchise involves inherent business risks. Specifically, the document includes an acknowledgment statement that the franchisor uses to confirm the prospective franchisee understands that buying a franchise is a business decision with associated risks. This acknowledgment aims to ensure that franchisees are not relying on unauthorized or misleading statements made during negotiations.
This disclosure serves to protect Nothing Bundt Cakes by ensuring franchisees recognize the potential for business risks. It also encourages prospective franchisees to conduct thorough due diligence and rely on the official disclosures in the Franchise Disclosure Document rather than on informal promises or representations. This is a common practice in franchising, as it sets clear expectations and reduces the potential for future disputes based on misunderstandings or unfulfilled promises.
Furthermore, the document emphasizes that estimated expenses and investment requirements outlined in Items 6 and 7 of the FDD may increase over time. Future Nothing Bundt Cakes bakeries are likely to require greater initial investment and operating capital than what is initially stated in the FDD. Franchisees must still open all locations in compliance with the schedule, regardless of the requirement of a greater investment, the financial condition or performance of previous Nothing Bundt Cakes bakeries, or any other circumstances, financial or otherwise.