What condition must be met for the Nothing Bundt Cakes Rider to be effective and for the franchisee to have development rights?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
This Rider will not be effective, and you will have no development rights, until we receive the total amount listed in this Section 5.
The fees payable hereunder are fully earned by us when we and you sign this Rider
and not refundable under any circumstances, even if you do not comply or attempt to comply with the Schedule and we then terminate this Rider. However, each time you (or your Approved Affiliate) sign a franchise agreement for another Nothing Bundt Cakes® Bakery to be developed within the Development Area, we will apply the deposit related to that Bakery toward the initial franchise fee due for that Bakery.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, the Rider will not be effective, and the franchisee will not have development rights, until Nothing Bundt Cakes receives the total amount due in connection with the execution of the Rider. This amount includes (a) the $45,000 initial franchise fee due under the first Franchise Agreement, plus (b) total deposits equaling an unspecified amount in thousands of dollars for the additional Nothing Bundt Cakes Bakeries the franchisee has committed to construct, develop, and operate under the Rider. These deposits represent 50% of the $45,000 initial franchise fee for each bakery to be developed after the first bakery.
In practical terms, a prospective Nothing Bundt Cakes franchisee seeking development rights must be prepared to pay the initial franchise fee for the first location and a deposit for each additional location they commit to developing. This upfront investment is non-refundable, even if the franchisee fails to meet the development schedule or the Rider is terminated. However, the deposit for each subsequent bakery will be applied toward the initial franchise fee when the franchisee signs the franchise agreement for that specific location.
This requirement highlights the financial commitment involved in securing development rights with Nothing Bundt Cakes. Franchisees should carefully consider their ability to meet the financial obligations and development schedule before entering into a Rider agreement. It is also important to note that the fees are fully earned by Nothing Bundt Cakes upon signing the Rider and are not refundable, emphasizing the need for thorough due diligence before making this investment.