Does a Nothing Bundt Cakes franchisee have exclusive delivery rights within their territory?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
roved Locations at Non-Traditional Sites. Upon renewal of your Franchise Agreement, we
reserve the right to modify and/or reduce the size of your Territory to be consistent with our then-current criteria for determining the size of a franchisee's territory.
You will not receive an exclusive territory. Your limited territorial rights will not be exclusive in terms of marketing rights, delivery, or clientele. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. We have the right to open or license others the right to open a non-traditional site within the Territory, provided however, we will give you a right of first refusal to establish and operate a Bakery at any ROFR Site, which we define as any mall (indoor and outdoor) food courts, food halls, fairs, festivals, and locations or events designed for large gatherings. For this reason, your Territory is not deemed exclusive. (Section 4.7 of the Franchise Agreement).
Until your Bakery opens, we reserve the right to deliver and ship, and allow other system franchisees the right to deliver and ship, Products to customers (sometimes called "Guests") located within your Territory. However, subject to our reserved rights under the franchise agreement and our E-Commerce Program, once your Bakery opens, no franchisee may deliver or ship Products to Guests located in your Territory and all customer account information should be transferred to you upon your request. Your rights described in the preceding sentence will not apply, however, if you refuse or fail to fulfill e-commerce orders, fail to deliver goods or services meeting our standards and specifications, or are otherwise not in material compliance with your obligations under your franchise agreement. In such cases, we may allow a Bakery outside of your Territory to fulfill your orders without any compensation to you, reimburse the Guest for any unfulfilled order, provide gift certificates, or otherwise remedy the situation, and you will be responsible for all of our costs in doing so. You agree to pay us or our designated supplier the then-current E-Commerce Program fees associated with maintaining the Website or other platform and fulfilling Guest orders.
On the other hand, you may deliver and ship Products to Guests located outside of your Territory provided that the Guest is not located within the territory of another open System Bakery. If the Guest is located within a territory subsequently sold to another System franchisee, upon the opening of such Bakery, you must immediately cease delivering or shipping Products to such Guest and transfer all Guest account information upon request of the Bakery owner. Subject to Sections 1.3 and 1.4 of the Franchise Agreement, you cannot, by yourself, through any Guest, courier service, or other agent, knowingly deliver, sell or ship Products within any other open Bakery's territory, or a corporate territory which we or our affiliates own and operate. If you do, you must remit all Net Revenues earned from the sale directly to the franchisee that owns the Bakery whose territory includes the geographic area where the Products were delivered or shipped (or us or our affiliate if it is a corporate territory) and make a $500 contribution to the Production Fund per violation.
You may not advertise or promote your Bakery outside of your Territory without our written consent, which we may withhold or revoke at any time and for any reason.
Source: Item 12 — TERRITORY (FDD pages 52–58)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, franchisees do not receive exclusive territory rights regarding delivery. The FDD states that the limited territorial rights granted to franchisees are not exclusive in terms of marketing rights, delivery, or clientele.
Franchisees may face competition from other franchisees, outlets owned by Nothing Bundt Cakes, other distribution channels, or competitive brands. Nothing Bundt Cakes retains the right to open or license others to open non-traditional sites within a franchisee's territory. However, Nothing Bundt Cakes will offer the franchisee a right of first refusal to establish and operate a bakery at any ROFR (Right of First Refusal) Site, such as malls and food courts.
Until a franchisee's bakery opens, Nothing Bundt Cakes reserves the right to deliver and ship products to customers within the franchisee's territory and allow other franchisees to do the same. Once the bakery is open, other franchisees are generally prohibited from delivering or shipping products to guests within that territory, and customer account information should be transferred to the franchisee upon request. However, this right is contingent on the franchisee fulfilling e-commerce orders and meeting Nothing Bundt Cakes' standards. If a franchisee fails to meet these obligations, Nothing Bundt Cakes may allow a bakery outside the territory to fulfill orders without compensating the franchisee.
Nothing Bundt Cakes also reserves the right to engage third-party delivery service providers to deliver approved products to guests within a franchisee's territory, even if those orders are fulfilled by other bakeries. The selection of the bakery to fulfill the order is determined by the third-party delivery service's algorithms, and franchisees have no right to object to these decisions. Franchisees are obligated to fulfill orders according to the standards set by Nothing Bundt Cakes and the third-party delivery service.