How will Nothing Bundt Cakes use the contributions to the Production Fund?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
fying, or discontinuing any Proprietary Recipe or Product, and developing Proprietary Products for sale through the Bakery. (Section 5.7 of the Franchise Agreement).
Advertising
Marketing Production Fund ("Production Fund")
As discussed in Item 6, the Production Fund has been established to, from time to time, develop, formulate, produce, and conduct marketing, advertising, and promotional programs in the form and media as we determine. You are obligated to contribute to the Production Fund in an amount set forth below, which contributions are due and payable at the same time and in the same manner as the royalty payments due under the Franchise Agreement or in such other manner as we may periodically specify. You agree to participate in all marketing, advertising, and promotional programs as we determine to be appropriate for the benefit of the System.
We will use Production Fund contributions, in our sole discretion, to develop, produce, and distribute national, regional and/or local advertising and to create advertising materials and public relations programs, which promote, in our sole judgment, the services offered by System franchisees. We reserve the right, in our sole discretion, to determine the composition of all geographic territories and market or trade areas where such marketing, advertising, and promotional programs are implemented. We have the sole right to determine contributions to and expenditures from the Production Fund, or any other advertising programs, and the sole authority to determine, without limitation, the selection of the advertising materials and programs, in a manner which we deem to be in the general best interests of the System, without any obligation to obtain your approval or the approval of any other franchisee (Section 11.2 of the Franchise Agreement).
We will use the Production Fund contributions to develop and prepare advertising materials which we will distribute to franchisees for their placement in the local media or place such advertisements directly ourselves. The advertising will be prepared by us and by outside sources. If we do not spend all Fund contributions by the end of each fiscal year, the funds will be carried forward into the next fiscal year. You must contribute to the Fund regardless of the amounts due from other System franchisees. There is no requirement that the Fund be audited. Upon your written request, we will provide you with an unaudited accounting of Fund expenditures within 120 days after the end of each fiscal year. We have the right to incorporate the Fund as a separate business entity. (Section 11.2 of the Franchise Agreement).
We may use the Production Fund to satisfy the costs of maintaining, administering, directing, preparing, producing, and tracking advertising, including, without limitation the cost of: (i) preparing and producing marketing programs and advertising materials; (ii) reputation management; (iii) public relations activities and advertising agencies; (iv) developing and maintaining an Internet website and a gift card program; (v) developing Guest loyalty programs; (vi) personnel and other departmental costs for maintaining, administering, directing, preparing, producing, and tracking advertising and marketing; and (vii) development of business intelligence tools that report information on your Bakery.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 42–52)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, the Production Fund is used to develop, formulate, produce, and conduct marketing, advertising, and promotional programs. These programs will be in the form and media that Nothing Bundt Cakes determines. Nothing Bundt Cakes will use contributions to develop, produce, and distribute national, regional, and/or local advertising, create advertising materials, and public relations programs. These efforts are intended to promote the services offered by Nothing Bundt Cakes franchisees. The franchisor has the sole right to determine contributions to and expenditures from the Production Fund, and the selection of advertising materials and programs. These decisions are made in a manner that Nothing Bundt Cakes deems to be in the general best interests of the System, without needing approval from franchisees.
Nothing Bundt Cakes may use the Production Fund to cover the costs of maintaining, administering, directing, preparing, producing, and tracking advertising. This includes preparing and producing marketing programs and advertising materials, reputation management, public relations activities and advertising agencies, developing and maintaining an Internet website and a gift card program, developing Guest loyalty programs, personnel and other departmental costs for maintaining, administering, directing, preparing, producing, and tracking advertising and marketing, and development of business intelligence tools that report information on your Bakery.
Notably, Nothing Bundt Cakes does not guarantee that all franchisees will directly or proportionally benefit from these expenditures. While the franchisor does not anticipate using Production Fund contributions for advertising that primarily solicits franchisees, they reserve the right to use the fund for public relations, brand recognition, website maintenance (a portion of which may explain the franchise offering and solicit potential franchisees), and to include a notation in any advertisement indicating "Franchises Available."
During Nothing Bundt Cakes' fiscal year ended December 29, 2024, contributions to the Funds were expended as follows: 71.7% to Paid Media, 17.7% to Production, and 10.6% to Administration. This provides some insight into how the funds have been allocated historically, although the franchisor retains the right to change these allocations.