Does Nothing Bundt Cakes require franchisees to acknowledge their willingness to undertake business risks?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
As you know, NBC Franchisor LLC (the "Franchisor") and you are preparing to enter into a Franchise Agreement for the establishment and operation of a "Nothing Bundt Cakes" Bakery. The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor ("Broker"), that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes Franchise Disclosure Document, prospective franchisees must acknowledge that purchasing a franchise involves business risks. Specifically, the Franchisee Disclosure Acknowledgment Statement includes a section to confirm that the franchisee understands the purchase of a Nothing Bundt Cakes franchise is a business decision with associated risks. This acknowledgment is part of ensuring that franchisees are aware of the realities of business ownership.
However, this acknowledgement is not required in certain states with franchise disclosure laws. The FDD states that the Franchisee Disclosure Acknowledgment Statement does not apply if the offer or sale of the franchise is subject to state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. Additionally, the acknowledgement is not required if the franchise is to be operated in, or if the franchisee is a resident of, California or Maryland.
This requirement ensures that Nothing Bundt Cakes franchisees are entering the agreement with a clear understanding of the potential risks involved. By acknowledging these risks, franchisees demonstrate they are not relying on unauthorized promises or representations, but rather on their own informed business judgment. This is a common practice in franchising, as it protects both the franchisor and franchisee by ensuring a mutual understanding of the investment and its potential challenges.