Is the Nothing Bundt Cakes Franchise Agreement binding upon the heirs and beneficiaries of both parties?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT 6 TO THE NBC FRANCHISOR LLC FRANCHISE AGREEMENT PERSONAL GUARANTY
(see attached)
ARTICLE I PERSONAL GUARANTY
The undersigned persons (individually and collectively "you") hereby represent to NBC Franchisor LLC ("Franchisor") that you are either: (a) the general partner of [insert here the name of the franchisee entity] ("Franchisee"); (b) all of the shareholders, partners, limited partners, or members in the Franchisee; or (c) the spouse of Franchisee or Franchisee's owner whose financials were required in order for Franchisee to qualify for a Nothing Bundt Cakes® franchised bakery (a "Bakery"). In consideration of the grant by Franchisor to the Franchisee of a franchise pursuant to the franchise agreement to which this Personal Guaranty is attached (the "Franchise Agreement"), each of you hereby agree, in consideration of benefits received and to be received by each of you, jointly and severally, and for yourselves, your heirs, legal representatives and assigns, to be firmly bound by all of the terms, provisions and conditions of the foregoing Franchise Agreement, and any other agreement between Franchisee and Franchisor and/or its affiliates, and do hereby unconditionally guarantee the full and timely performance by Franchisee of each and every obligation of Franchisee under the aforesaid Franchise Agreement or other agreement between Franchisor and Franchisee, including, without limitation, any indebtedness to Franchisor or its affiliates of Franchisee arising under or by virtue of the aforesaid Franchise Agreement and that you (jointly and individually) will not permit or cause any change in the percentage of Franchisee owned, directly or indirectly, by any person, without first obtaining the written consent of Franchisor prior to said proposed transfer, which consent must not be unreasonably withheld, and without first paying or causing to be paid to Franchisor the transfer fee provided for in said Franchise Agreement, if applicable, and without otherwise complying with the transfer provisions of the foregoing Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, the Personal Guaranty agreement attached as Exhibit 6 to the franchise agreement states that the undersigned persons (guarantors) agree to be bound by the terms of the Franchise Agreement, along with their "heirs, legal representatives and assigns". This indicates that the obligations under the franchise agreement, specifically those guaranteed by the personal guarantors, extend to their heirs, legal representatives, and assigns.
This clause is significant because it ensures that the obligations of the franchise agreement do not simply disappear upon the death or incapacitation of the franchisee or guarantor. Instead, these obligations can be enforced against their estate or beneficiaries. For a prospective Nothing Bundt Cakes franchisee, this means that if they are asked to sign a personal guarantee, their heirs could be responsible for the franchise's financial or operational obligations if the franchisee fails to meet them.
It is important to note that this excerpt refers specifically to the personal guaranty and its impact on the heirs of the guarantor. The document does not explicitly state whether the entire franchise agreement is binding upon the heirs and beneficiaries of both parties (franchisor and franchisee). A prospective franchisee should seek legal counsel to fully understand the implications of the franchise agreement and personal guaranty, particularly concerning their estate and potential liabilities.