Does the Nothing Bundt Cakes Franchise Agreement have a section dedicated to the franchisee's right to transfer?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
| j. | Assignment of | 17.1 of Franchise | No restrictions on our right to assign or transfer. | | | contract by us | Agreement | | | k. | | | A sale, transfer or assignment requiring our prior written consent | | | | | occurs: (i) if you are a corporation, upon any assignment, sale, |
| PROVISION | SECTION IN | SUMMARY | |
|---|---|---|---|
| FRANCHISE OR OTHER AGREEMENT | |||
| "Transfer" by you – definition | 17.2 and 17.3 of Franchise Agreement | pledge or transfer of any fractional portion of your voting stock, or any increase in the number of outstanding shares of your voting stock which results in a change in ownership; (ii) if you are a partnership, upon the assignment, sale, pledge or transfer of any fractional partnership ownership interest; or (iii) if you are a limited liability company, upon any assignment, sale, pledge or transfer of any fractional portion of any interest in the limited liability company. | |
| l. | Our approval of transfer by franchisee | 17.2 and 17.4 of Franchise Agreement and 9 of Development Rights Rider | You may not transfer any rights in the franchise without our prior written consent. We have the right to condition our approval of any sale, transfer, assignment or encumbrance as described below. Your development rights under Development Rights Rider are not assignable. |
| m. | Conditions for our approval of transfer | 17.4 of Franchise Agreement | We will approve a proposed transfer if: (i) all of your accrued monetary obligations to us, our affiliates, and our approved and designated suppliers have been paid; (ii) all existing defaults under the Franchise Agreement have been cured; (iii) you execute a general release in favor of us and our affiliates; (iv) you provide us a copy of the executed purchase agreement; (v) the transferee meets our qualifications; (vi) the transferee executes our then-current Franchise Agreement for the remaining unexpired term of the Franchise Agreement; (vii) you pay us a $10,000 transfer fee in the event of a transfer of the Bakery or $5,000 in the event of a transfer of the ownership interests in franchisee; (viii) the transferee satisfactorily completes our training program; (ix) you comply with the post term provisions of the Franchise Agreement; (x) the transferee obtains all necessary licenses and permits required to operate the Bakery; (xi) to the extent required by the terms of any leases or other agreements, the lessors or other parties must have consented to the proposed transfer; (xii) the transfer is made in compliance with all applicable laws; (xiii) the purchase price and terms of the proposed transfer are not so burdensome to the prospective transferee as to impair or materially threaten its future operation of the Bakery and performance under its Franchise Agreement; (xiv) you must request that we provide the prospective transferee with our current form of disclosure document and we shall not be liable for any representations not included in the disclosure document; (xv) our approval of the transfer shall not constitute a waiver of any claims we may have against the transferring party; (xvi) we shall have the right to disclose to any prospective transferee such revenue reports and other financial information concerning you and your Bakery as you have supplied us; and (xvii) we may withhold or condition our consent to any transfer as we deem appropriate based on the circumstances of the transfer or otherwise. |
| PROVISION |
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 outlines the provisions for transfer of the franchise. Specifically, Sections 17.2 and 17.3 of the Franchise Agreement define what constitutes a "transfer" by the franchisee. This includes scenarios such as the transfer of voting stock, partnership ownership interest, or interest in a limited liability company.
The FDD states that a franchisee cannot transfer any rights in the Nothing Bundt Cakes franchise without prior written consent from Nothing Bundt Cakes. Section 17.4 of the Franchise Agreement details the conditions for approval of a transfer.
Nothing Bundt Cakes will approve a proposed transfer if certain conditions are met. These conditions include paying all accrued monetary obligations, curing existing defaults, executing a general release, providing a copy of the executed purchase agreement, and ensuring the transferee meets Nothing Bundt Cakes' qualifications and completes the training program. Additionally, the transferee must execute the then-current Franchise Agreement, obtain necessary licenses and permits, and comply with all applicable laws. A transfer fee of $10,000 is required for a transfer of the Bakery, or $5,000 for a transfer of ownership interests in the franchisee. Nothing Bundt Cakes also retains the right to withhold or condition consent to any transfer based on the circumstances.