Under what condition are transfer fees collectable for a Nothing Bundt Cakes franchise?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
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, transfer fees are payable to the franchisor, NBC Franchisor LLC, if a franchisee intends to change the percentage of ownership in their Nothing Bundt Cakes franchise. This condition applies when the franchisee seeks to transfer ownership, either directly or indirectly, to another party.
Specifically, before any such transfer can occur, the franchisee must first obtain written consent from Nothing Bundt Cakes. This consent will not be unreasonably withheld. Additionally, the franchisee is obligated to pay the transfer fee as stipulated in the Franchise Agreement. This requirement ensures that Nothing Bundt Cakes maintains control over who operates its franchises and that the brand's standards are upheld by any new owners.
This policy is typical in franchising, as franchisors want to approve any new controlling parties. For a prospective Nothing Bundt Cakes franchisee, this means understanding that any future changes in ownership will require both the franchisor's approval and the payment of a transfer fee, the amount of which will be specified in the Franchise Agreement. It is important to review the Franchise Agreement carefully to understand the specific terms and conditions related to transfers and associated fees.