What is the purpose of the 'Provision' column in the Nothing Bundt Cakes FDD table?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | SECTION IN | SUMMARY | |
| ---- | ------------------------------------------------------------------------------------ | ------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| FRANCHISE OR OTHER AGREEMENT | The failure to comply with any of the aforementioned conditions may result in our disapproval of the transfer at any time. | ||
| n. | Our right of first refusal to acquire your business | 17.7 of Franchise Agreement | We can match any offer for the franchised business. We will notify you within ten (10) business days after receiving notice from you whether we wish to exercise our right to purchase your business. |
| o. | Our option to purchase your business | 15.2 of Franchise Agreement | Upon termination or expiration of your agreement, for whatever reason, we have the option to purchase the assets of your business at book value. |
| p. | Your death or disability | 17.5 of Franchise Agreement | Upon your death or disability, your rights under the Franchise Agreement may pass to your heirs or legatees, provided that, within 90 days of your death or disability, they agree to assume your obligations under the Franchise Agreement, successfully complete our initial training program, and otherwise meet our satisfaction. |
| q. | Non-competition covenants during the term of the franchise | 16.1 of Franchise Agreement | During the term of the Franchise Agreement, neither you, nor any member of your immediate family or the immediate family of your Owners who work at the business may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation: (i) own, maintain, engage in, be employed by, lend money to, extend credit to or have any interest in any other business which operates or licenses the sale of businesses which offer and sell cakes, baked goods, gift packages, novelty items, or any other goods or services authorized or offered for sale by System franchisees, provided this restriction does not apply to any other Bakery; or (ii) solicit the Bakery's Guests, any National Account or contact our suppliers or vendors for any competitive purpose. The Franchise Agreement provides a list of brands which sell cakes, cookies, baked goods, etc. which we designate as being competitive brands. |
| r. | Non-competition covenants after the franchise is terminated or expires | 16.2 of Franchise Agreement | For a period of 2 years after the expiration and nonrenewal, transfer or termination of the Franchise Agreement, regardless of the cause, neither you, your Owners, nor any member of your immediate family or the immediate family of your Owners who work at the business may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, (i) enter into any business competing in whole or in part with us in granting franchises or licenses to operate businesses which offer and sell cakes, baked goods, gift packages, |
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, the 'Provision' column in Item 17, which covers renewal, termination, transfer, and dispute resolution, outlines specific elements related to the franchise agreement. These provisions detail various scenarios and stipulations regarding the franchisee's rights and obligations, as well as Nothing Bundt Cakes's rights, in areas such as transfer of ownership, conditions for approval, and non-competition covenants.
The 'Provision' column essentially acts as a quick reference guide, identifying key aspects of the franchise agreement that are further elaborated upon in the 'Summary' column. For example, it highlights topics like "Our approval of transfer by franchisee," "Conditions for our approval of transfer," and "Non-competition covenants during the term of the franchise." This allows prospective franchisees to quickly locate and understand the specific terms related to these critical areas of the franchise relationship.
For a potential Nothing Bundt Cakes franchisee, understanding the provisions is crucial because it clarifies the circumstances under which they can transfer their franchise, what conditions must be met for such a transfer to be approved, and what restrictions they face both during and after the franchise term in terms of competitive activities. The provisions also cover scenarios like death or disability of the franchisee and Nothing Bundt Cakes's rights to purchase the business under certain conditions.
In essence, the 'Provision' column serves as an index to the more detailed summaries, enabling franchisees to efficiently navigate the complex legal terms of the franchise agreement and understand their rights and responsibilities within the Nothing Bundt Cakes franchise system.