Is class action mediation permitted for disputes involving Nothing Bundt Cakes?

According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, class action mediation is not permitted. The FDD explicitly states, "There will be no class action mediation." This means that franchisees are prohibited from participating in or initiating any mediation that involves a class or group of franchisees against Nothing Bundt Cakes.

This restriction has significant implications for prospective franchisees. It means that each franchisee must pursue any dispute with Nothing Bundt Cakes individually, bearing their own costs of mediation and potentially litigation. This can be a disadvantage, as individual franchisees may lack the resources or bargaining power to effectively challenge the franchisor.

However, there are exceptions to the mediation requirement. Nothing Bundt Cakes is not required to mediate claims regarding intellectual property rights, warranty claims, restrictive covenants, or collection of past due amounts. These types of disputes may proceed directly to arbitration or litigation. Additionally, the obligation to mediate or arbitrate does not apply to disputes that a federal statute expressly states cannot be subject to pre-dispute mediation or arbitration.

Nothing Bundt Cakes' officers, directors, shareholders, agents, and employees are considered third-party beneficiaries of the franchise agreement and the mediation provisions, allowing them to enforce the right to mediate and arbitrate claims asserted against them by the franchisee. This further clarifies the scope and enforcement of the mediation agreement within the franchise system.