What is the dependency between the Development Rights Rider and building the first Nothing Bundt Cakes Bakery?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
tables above are non-refundable. We do not finance any portion of your initial investment.
Explanatory Notes
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- Initial Franchise Fee. We describe the initial franchise fee and development fees in Item 5. No separate initial investment is required when you sign the Development Rights Rider, although you must build the first Bakery at a cost estimated to range as described in the chart above.
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- Rent and Security Deposit. Our Bakery prototype will occupy approximately 1,600 sq. ft. to 1,800 sq. ft., although you may opt to lease a larger space. Your rent will depend on geographic location, the Bakery's size, local rental rates, businesses in the area, site profile and desirability, and other factors.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 30–36)
What This Means (2025 FDD)
According to Nothing Bundt Cakes's 2025 Franchise Disclosure Document, signing a Development Rights Rider does not require a separate initial investment. However, it does require the franchisee to build the first Nothing Bundt Cakes bakery. The cost to build the first bakery is estimated to range between $667,100 and $906,500, which includes the $45,000 initial franchise fee.
When signing the Development Rights Rider, the franchisee must pay Nothing Bundt Cakes $45,000 for the first bakery and 50% of the initial franchise fee of $45,000 for each additional bakery to be developed under the rider. The balance of the initial franchise fee will be paid when the franchisee signs a franchise agreement for each additional bakery to be developed.
An estimated initial investment will be incurred for each bakery established under a Development Rights Rider. This means that while there's no immediate, separate fee just for signing the rider, the agreement mandates building at least one bakery, incurring significant initial investment costs. This is a crucial consideration for prospective franchisees evaluating the financial commitment associated with expanding through development rights.