Is a transfer fee required when transferring ownership of a Nothing Bundt Cakes franchise?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
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, a transfer fee is required when transferring ownership of a franchise. Specifically, the personal guarantors of the franchise agreement must ensure that if there is any change in the ownership percentage of the franchisee, they must first obtain written consent from Nothing Bundt Cakes and pay the transfer fee outlined in the Franchise Agreement, if applicable. This consent cannot be unreasonably withheld, and compliance with all transfer provisions in the Franchise Agreement is mandatory.
This requirement ensures that Nothing Bundt Cakes maintains control over who operates its franchises and that the brand standards are upheld by any new owners. The transfer fee compensates Nothing Bundt Cakes for the administrative and legal costs associated with reviewing and approving the transfer, as well as for the potential impact on the brand's reputation and performance. It is common practice in franchising to have transfer fees to ensure the franchisor can properly vet and train new franchisees.
For a prospective Nothing Bundt Cakes franchisee, this means that if they decide to sell their franchise in the future, they will need to factor in the cost of the transfer fee. The exact amount of the transfer fee is not specified in this excerpt but is referenced as being 'provided for in said Franchise Agreement'. It would be prudent for potential franchisees to carefully review the Franchise Agreement to understand the specific amount and conditions related to the transfer fee to avoid any surprises during a potential sale.