Under what condition is it unlawful for Nothing Bundt Cakes to repurchase a franchisee's business?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT J TO THE DISCLOSURE DOCUMENT FRANCHISEE DISCLOSURE ACKNOWLEDGMENT STATEMENT
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE OFFER OR SALE OF THE FRANCHISE IS SUBJECT TO THE STATE FRANCHISE DISCLOSURE LAWS IN THE STATES OF CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE FRANCHISE IS TO BE OPERATED IN, OR IF YOU ARE A RESIDENT OF, CALIFORNIA OR MARYLAND.
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.
In the event that you are intending to purchase an existing "Nothing Bundt Cakes" Bakery from an existing Franchisee, you may have received information from the transferring Franchisee, who are not employees or representatives of Franchisor. The questions below do not apply to any communications that you had with the transferring Franchisee. Please review each of the following questions and statements carefully and provide honest and complete responses to each.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Exhibit J outlines specific states where a certain acknowledgement is not applicable. This acknowledgement relates to confirming that the franchisee isn't relying on unauthorized or misleading statements during the franchise purchase.
Specifically, if the offer or sale of the Nothing Bundt Cakes 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, this acknowledgement does not apply. Additionally, the acknowledgement is not applicable if the franchise is to be operated in, or if the franchisee is a resident of, California or Maryland.
In these listed states, the standard acknowledgement process is bypassed, likely due to stricter state-level regulations governing franchise sales and disclosures. This suggests that Nothing Bundt Cakes must adhere to these states' specific franchise laws, which may provide additional protections or require different disclosures to potential franchisees. Prospective franchisees in these states should be particularly aware of their state's franchise laws and ensure they fully understand their rights and obligations.