A30/100FDD 2025
Nothing Bundt Cakes — Litigation & Risk
Food & Beverage - Bakery · FDD Items 3, 4 & 5
Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
30 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
283
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$138.5M
Avg loan size
$489K
Participating lenders
72
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 30/100 rating
Risk Score Breakdown
- 01MEDMaryland Securities Commissioner consent order (2021) indicates regulatory compliance failure in franchise sales disclosure
- 02HIGHParent company litigation pattern across multiple brands (Arby's, Dunkin') suggests systemic governance issues with no-poaching and data security
- 03MINORItem 19 (Financial Performance) absent — average revenue of $1.48M and net income of $316.6K cannot be independently verified
- 04MINORHigh initial investment range ($667K–$1.03M) with 6% royalty creates breakeven pressure if unit underperforms system average
- 05MINORRapid unit growth (18.6% YoY) to 660 units may signal recruitment-driven expansion rather than mature, profitable unit sustainability
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.