SALT LAKE CITY, April 15 (UPI) -- When Kelly Clayton was looking for a franchise to purchase in 2019, Nothing Bundt Cakes caught his eye because the company allowed the bakeries to be closed on Sundays. That option sealed the deal for the Utah man and his family.
"We would not have purchased the franchise if we would have had to be open on Sunday," said Clayton, who is a member of The Church of Jesus Christ of Latter-day Saints, formerly known as the Mormon Church. "This really fit our family values, our desire to worship on Sunday and to keep the Sabbath day holy."
The optional Sunday operation also attracted Fawn and Brad Berrett, who have been with the Nothing Bundt Cakes chain for six years. The retired couple are Latter-day Saints who attend church services every week, and they told company officials when they bought a franchise they did not intend to be open on Sundays. The company was good with that, Fawn Berrett said.
But last year, Roark Capital, a private equity firm that acquired Nothing Bundt Cakes in 2021, told franchisees they had to be open at least five hours on Sundays starting in February 2025.
The Clayton family had bought two franchises by then, one in St. George in 2019 and the other in Spanish Fork in 2024. The Berretts bought a franchise in West Bountiful in 2019, then sold it and opened a Salt Lake City franchise in 2023.
After Nothing Bundt Cakes franchise owners discussed the situation with Utah state legislators, Rep. Ken Ivory, R-West Jordan, introduced House Bill 441, the Franchisee Protection Act. The act was unanimously approved by the House of Representatives and passed by the Senate on a 23-2 vote, and Gov. Spencer Cox signed it into law March 17.
Under the law, franchisors cannot require franchise owners to be open on a "religious day" when operating that day conflicts with a sincerely held religious belief unless the mandate was part of the existing agreement.
In addition, a franchisor cannot mandate that a franchisee accept a religious day operation requirement as part of an amendment to an existing agreement or refuse to renew a franchise agreement based on the franchisee's decision to not comply with a religious day operation mandate.
The law does not apply when the original franchise agreement "conspicuously provides" a religious day operation requirement, the franchisee agrees to the requirement through a renewal or an amendment to the agreement or the franchisor and franchisee enter an agreement expanding the number of the franchisee's locations that have a religious day operation.
Civil penalties against a franchisor for violating the law are up to $10,000 for a first violation, $25,000 for a second violation within three years after the franchisee filed the complaint for the first violation and $50,000 for a third violation within five years after the first complaint was filed.
In a written statement, the company said, "Nothing Bundt Cakes is committed to following all federal, state and local laws in the communities we serve. Guests can check with their local bakeries for hours of operation, and we look forward to being part of Utahns' celebrations and everyday moments for years to come."
Nothing Bundt Cakes was founded in Las Vegas in 1997 by friends Dena Tripp and Debbie Shwetz. The company was sold in 2016 to Levine Leichtman Capital Partners, a private equity firm, and then sold five years later to Roark. The specialty cake company, which is based in Addison, Texas, operates in more than 600 locations.
Fawn Berrett said company officials told her and her husband they could make more money if they opened their bakery on Sunday.
"We said we don't care if we make $20,000 more a week just because we open on Sundays," she said. "It's literally not worth any amount of money."
The company said it was just a suggestion, but six months later the Sunday mandate was issued, Berrett said.
"Roark Capital is all about making money," she said. "They don't care about individual owners."
Ivory said some franchise owners invested their life savings and left corporate jobs based on representations that Nothing Bundt Cakes was a family-friendly and religion-friendly organization that would allow them to be off Sundays. Now, prospective franchisees are negotiating with their eyes open, he said.
"The issue is there were promises made and there were disclosures made and not made," Ivory said. "In Utah, we want to make sure that both franchisors and franchisees have full and fair disclosure when they're making business decisions, particularly about having time with family and having the opportunity to worship on the days of their choice.
"It's just good, fair, open, transparent business and that's really all this bill is about."
The law applies to all days of worship, Ivory said. A franchisor, for example, cannot tell franchisees after they buy a kosher deli under the expectation of being closed on Saturdays that they must begin opening that day, he said.
The law applies only to Utah, but it can serve as a model to other states, Ivory said. He pointed out that Sunday is a legal holiday under Utah state code,.
"There's been a great deal of attention to the bill nationally, internationally even, and the people that were being burdened and oppressed by franchisors that were frankly, in my opinion, just trying to be bullies," Ivory said.
He added, "I'm just gratified to be part of the process where at the state level, when people see things that concern their life and liberty and their property, they can make changes."
Clayton said his original franchise contract made Sunday operation optional and protects that option when the agreement comes up for renewal.
"It was a very, very tenuous time for us and the other Utah bakeries, as well as those across the country watching what was going on, who were also fighting to stay closed on Sunday for their own religious reasons and some for financial reasons," he said.
Clayton described the dispute over operating times as almost a David-and-Goliath situation.
"It just was not right to try to crush the small guy," he said. "It's not only our franchise. There are other franchises that are closed on Sunday and it will protect them going forward and also create a situation where companies actually have to be explicit about what you're signing on for.
"We love the Nothing Bundt Cakes brand and are grateful to be a part of such a wonderful franchise."
