Is class action mediation permitted for Nothing Bundt Cakes disputes?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
There will be no class action mediation.
a) The parties will not be required to first attempt to mediate a controversy, dispute, or claim through mediation as set forth in this Section 4 if such controversy, dispute, or claim concerns an allegation that a party has violated (or threatens to violate, or poses an imminent risk of violating):
(1) Any federally protected intellectual property rights in the Marks, the System, Proprietary Materials, Proprietary Software, or in any Confidential Information;
(2) Any claims arising out of or pertaining to any warranty issued;
(3) Any of the restrictive covenants contained in this Personal Guaranty; or
(4) Any claims to collect past due amounts owed to Franchisor or its affiliates.
Notwithstanding the foregoing, the obligation to undertake mediation and/or arbitration according to this Section 4.4 shall not apply to any dispute that an applicable federal statute expressly states cannot be subject to a pre-dispute mediation or arbitration.
Section 4.5 Third-Party Beneficiaries. Franchisor's officers, directors, shareholders, agents and/or employees are express third-party beneficiaries of the Franchise Agreement and this Personal Guaranty, and the mediation provisions contained herein, each having authority to specifically enforce the right to mediate and arbitrate claims asserted against such person(s) by you.
Section 4.6 Injunctive Relief. Nothing contained in this Personal Guaranty will prevent Franchisor from applying to or obtaining from any court having jurisdiction, without bond, a writ of attachment, temporary injunction, preliminary injunction and/or other emergency relief available to safeguard and protect Franchisor's interest prior to the filing of any mediation proceeding or pending the trial or handing down of a decision or award pursuant to any mediation or judicial proceeding conducted hereunder.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, class action mediation is not permitted. The FDD states explicitly, "There will be no class action mediation." This means that franchisees are prohibited from participating in or initiating a mediation as a group against Nothing Bundt Cakes.
However, the agreement to mediate at Nothing Bundt Cakes's option will survive the termination or expiration of the Franchise Agreement. Each party will bear its own cost of mediation, and the parties will share the cost of the mediator.
There are exceptions to the mediation requirement. The parties are not required to attempt mediation if the dispute concerns allegations of violations or imminent risks of violations related to federally protected intellectual property rights, claims arising from warranties, restrictive covenants in the Personal Guaranty, or claims to collect past due amounts owed to Nothing Bundt Cakes or its affiliates. Additionally, the obligation to mediate or arbitrate does not apply to disputes that an applicable federal statute expressly states cannot be subject to pre-dispute mediation or arbitration.