If a Cooperative is established for a Nothing Bundt Cakes Bakery, is participation mandatory?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to designate any geographical area for purposes of establishing a regional advertising and promotional cooperative ("Cooperative"), and to determine whether a Cooperative is applicable to your Bakery. If a Cooperative is established applicable to your Bakery, you must participate in and contribute to the Cooperative. Each Cooperative will be organized for the exclusive purpose of administering regional advertising programs and developing, subject to our approval, standardized advertising materials for use by the members in local advertising. No promotional or advertising plans or materials may be used by a Cooperative or furnished to its members without our prior written approval. All such plans and materials will be submitted to us for approval. Cooperative contributions will be credited towards either your Production Fund contributions and/or your Media Fund contributions, as we shall decide. We may grant to any franchisee, in our sole discretion, an exemption for any length of time from the requirement of membership in a Cooperative, upon written request of such franchisee stating reasons supporting such exemption. Our decision concerning such request for an exemption will be final. Upon the request of a franchisee in the Cooperative, the Cooperative will provide that franchisee a copy of the bill for advertising that the Cooperative received. Neither we nor the Cooperative will prepare an annual accounting of these funds. (Section 11.5 of the Franchise Agreement).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 42–52)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, if the franchisor establishes a regional advertising and promotional cooperative applicable to a franchisee's bakery, participation is mandatory. The cooperative is organized to administer regional advertising programs and develop standardized advertising materials, subject to the franchisor's approval, for use by members in local advertising. The franchisor retains control over the cooperative's plans and materials, requiring prior written approval before use. Contributions to the cooperative will be credited towards the franchisee's Production Fund and/or Media Fund contributions, as determined by Nothing Bundt Cakes.
However, Nothing Bundt Cakes may grant a franchisee an exemption from the cooperative membership requirement for any length of time, upon written request from the franchisee stating reasons for the exemption. The franchisor's decision regarding the exemption request is final. The cooperative will provide a franchisee with a copy of the advertising bill upon request. Neither Nothing Bundt Cakes nor the cooperative will prepare an annual accounting of these funds.
This mandatory participation, unless an exemption is granted, ensures a consistent regional advertising strategy. It also allows Nothing Bundt Cakes to maintain control over marketing efforts and how funds are spent. While franchisees must contribute to the cooperative if it is established, their contributions are credited towards other advertising fund obligations. The lack of an annual accounting of cooperative funds could be a concern for some franchisees, as it limits transparency regarding how the funds are managed and spent.