Under the Personal Guaranty, who is considered 'you' in relation to 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 Nothing Bundt Cakes' 2025 Franchise Disclosure Document, the term "you" in the Personal Guaranty refers to the individuals who are guaranteeing the franchisee's obligations. Specifically, "you" can be one of the following: (a) the general partner of the franchisee entity, (b) all of the shareholders, partners, limited partners, or members in the franchisee, or (c) the spouse of the franchisee or franchisee's owner whose financials were required for the franchisee to qualify for a Nothing Bundt Cakes franchised bakery.
This means that these individuals are personally liable for the franchisee's performance under the franchise agreement. By signing the Personal Guaranty, they agree to be bound by all the terms, provisions, and conditions of the Franchise Agreement and any other agreements between the franchisee and Nothing Bundt Cakes or its affiliates. This includes guaranteeing the franchisee's full and timely performance of all obligations, including any indebtedness to Nothing Bundt Cakes.
The Personal Guaranty also stipulates that the individuals guaranteeing the franchise will not permit any change in the ownership percentage of the franchisee without the prior written consent of Nothing Bundt Cakes. This consent cannot be unreasonably withheld, but it may require the payment of a transfer fee and compliance with the transfer provisions outlined in the Franchise Agreement. This provision ensures that the individuals who initially guaranteed the franchise remain committed to the business unless Nothing Bundt Cakes approves a change in ownership.
For a prospective Nothing Bundt Cakes franchisee, this means that if you are a general partner, shareholder, partner, member, or the spouse of an owner whose financials were used to qualify for the franchise, you will be required to sign a Personal Guaranty. This is a significant commitment, as it puts your personal assets at risk if the franchise fails to meet its obligations. It is crucial to carefully review the Franchise Agreement and understand the full extent of the obligations you are guaranteeing before signing the Personal Guaranty.