Is a Personal Guaranty required by Nothing Bundt Cakes as part of its Franchise Agreement?
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 22 — CONTRACTS (FDD page 93)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, a Personal Guaranty is required as part of the Franchise Agreement. Specifically, Exhibit 6 of the Franchise Agreement outlines the Personal Guaranty, indicating that certain individuals must guarantee the franchisee's obligations.
The individuals required to provide this guaranty include the general partner of the franchisee entity, all shareholders/partners/members in the franchisee, or the spouse of the franchisee or franchisee's owner whose financials were required to qualify for the Nothing Bundt Cakes franchise. By signing the guaranty, these individuals agree to be bound by all terms of the Franchise Agreement and any other agreements between the franchisee and Nothing Bundt Cakes or its affiliates.
This guaranty ensures the full and timely performance of all obligations of the franchisee, including any indebtedness to Nothing Bundt Cakes. Furthermore, the guarantors must obtain written consent from Nothing Bundt Cakes before any change in the ownership percentage of the franchisee, and they must also comply with the transfer provisions outlined in the Franchise Agreement, including paying any applicable transfer fees. This requirement is a standard practice in franchising, designed to protect the franchisor's interests by ensuring that the franchisee's obligations are met and that any transfer of ownership is properly managed and approved.