If the Nothing Bundt Cakes franchisee is an individual, who must guarantee the franchisee's monetary obligations?
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, if the franchisee is an individual, their spouse may be required to guarantee the franchisee's obligations if their financials were used to qualify for the franchise. Specifically, Exhibit 6 to the NBC Franchisor LLC Franchise Agreement details the Personal Guaranty, outlining who must guarantee the franchisee's obligations. The individuals who must provide the guaranty include the general partner of the franchisee entity, all shareholders, partners, limited partners, or members in the franchisee, or the spouse of the franchisee or franchisee's owner whose financials were required in order for the franchisee to qualify for a Nothing Bundt Cakes franchised bakery.
This requirement ensures that Nothing Bundt Cakes has recourse to additional assets and income streams should the franchisee default on their financial obligations. It is a common practice in franchising to seek personal guarantees, especially from individuals or small entities, to mitigate the risk of non-payment or non-performance.
The personal guaranty extends to all terms, provisions, and conditions of the Franchise Agreement, as well as any other agreement between the franchisee and Nothing Bundt Cakes or its affiliates. This includes any indebtedness to Nothing Bundt Cakes or its affiliates arising under the Franchise Agreement. Furthermore, the guarantor must obtain written consent from Nothing Bundt Cakes before any change in the ownership percentage of the franchisee. This consent cannot be unreasonably withheld, but may require paying a transfer fee and complying with the transfer provisions in the Franchise Agreement.