Does the Nothing Bundt Cakes Franchise Agreement outline specific provisions for termination?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY | |
|---|---|---|---|
| FRANCHISE OR OTHER AGREEMENT | The failure to comply with any of the aforementioned conditions may result in our disapproval of the transfer at any time. | ||
| n. | Our right of first refusal to acquire your business | 17.7 of Franchise Agreement | We can match any offer for the franchised business. We will notify you within ten (10) business days after receiving notice from you whether we wish to exercise our right to purchase your business. |
| o. | Our option to purchase your business | 15.2 of Franchise Agreement | Upon termination or expiration of your agreement, for whatever reason, we have the option to purchase the assets of your business at book value. |
| p. | Your death or disability | 17.5 of Franchise Agreement | Upon your death or disability, your rights under the Franchise Agreement may pass to your heirs or legatees, provided that, within 90 days of your death or disability, they agree to assume your obligations under the Franchise Agreement, successfully complete our initial training program, and otherwise meet our satisfaction. |
| q. | Non-competition covenants during the term of the franchise | 16.1 of Franchise Agreement | During the term of the Franchise Agreement, neither you, nor any member of your immediate family or the immediate family of your Owners who work at the business may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation: (i) own, maintain, engage in, be employed by, lend money to, extend credit to or have any interest in any other business which operates or licenses the sale of businesses which offer and sell cakes, baked goods, gift packages, novelty items, or any other goods or services authorized or offered for sale by System franchisees, provided this restriction does not apply to any other Bakery; or (ii) solicit the Bakery's Guests, any National Account or contact our suppliers or vendors for any competitive purpose. The Franchise Agreement provides a list of brands which sell cakes, cookies, baked goods, etc. which we designate as being competitive brands. |
| r. | Non-competition covenants after the franchise is terminated or expires | 16.2 of Franchise Agreement | For a period of 2 years after the expiration and nonrenewal, transfer or termination of the Franchise Agreement, regardless of the cause, neither you, your Owners, nor any member of your immediate family or the immediate family of your Owners who work at the business may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, (i) enter into any business competing in whole or in part with us in granting franchises or licenses to operate businesses which offer and sell cakes, baked goods, gift packages, |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 64–71)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, Item 17 addresses various provisions related to the franchise agreement, including those pertaining to termination. While the provided excerpts do not explicitly detail the specific causes or procedures for termination, they do reference sections within the Franchise Agreement that would address termination-related issues..
Specifically, the document mentions Nothing Bundt Cakes' option to purchase the franchisee's business upon termination or expiration of the agreement, referencing Section 15.2 of the Franchise Agreement. This indicates that the agreement does contain provisions that are triggered by termination. Additionally, the document outlines post-termination non-competition covenants in Section 16.2 of the Franchise Agreement, which further suggests that termination is addressed within the agreement.
Furthermore, the document details Nothing Bundt Cakes' right of first refusal to acquire the franchisee's business, as stated in Section 17.7 of the Franchise Agreement. This right can be exercised upon transfer, which could be related to termination scenarios. The document also mentions conditions for approval of transfer in Section 17.4 of the Franchise Agreement, implying that the transfer process, potentially linked to termination, is governed by specific requirements, including payment of accrued obligations, curing defaults, and payment of a transfer fee ($10,000 for a Bakery transfer or $5,000 for ownership interest transfer).
Prospective Nothing Bundt Cakes franchisees should carefully review the full Franchise Agreement, including Sections 15.2, 16.2, and 17.7, to fully understand the circumstances under which the franchise can be terminated, the procedures involved, and the franchisee's rights and obligations upon termination. Understanding these provisions is crucial for making an informed decision about investing in a Nothing Bundt Cakes franchise.