When does Nothing Bundt Cakes recognize franchise fees as revenue?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
The fees payable hereunder are fully earned by us when we and you sign this Rider
and not refundable under any circumstances, even if you do not comply or attempt to comply with the Schedule and we then terminate this Rider. However, each time you (or your Approved Affiliate) sign a franchise agreement for another Nothing Bundt Cakes® Bakery to be developed within the Development Area, we will apply the deposit related to that Bakery toward the initial franchise fee due for that Bakery.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, the initial franchise fees are considered fully earned when the Rider agreement is signed by both Nothing Bundt Cakes and the franchisee. This means Nothing Bundt Cakes recognizes the revenue at this point. The initial franchise fee is Forty-Five Thousand Dollars ($45,000). These fees are non-refundable, regardless of whether the franchisee fulfills the development schedule or if the Rider is terminated due to non-compliance.
However, the deposit related to each bakery will be applied toward the initial franchise fee due for that bakery each time the franchisee (or their Approved Affiliate) signs a franchise agreement for another Nothing Bundt Cakes Bakery to be developed within the Development Area.
This policy is important for prospective franchisees to understand, as it clarifies when Nothing Bundt Cakes recognizes the franchise fee as revenue and under what conditions the franchisee might not receive a refund. Franchisees should be aware of the implications of signing the Rider agreement and the non-refundable nature of the fees, even if they are unable to proceed with opening all committed locations.