The Franchisee Protection Act passed the Utah Senate and House of Representatives by a unanimous vote and includes a “franchisee religious exemption” in which franchisors may not ask franchisees to operate on a religious day or refuse to renew a franchise agreement over their refusal to open on religious worship days.
Nothing Bundt Cakes franchisees in Utah who fought a corporate mandate to open their stores on Sundays celebrated the passage of a state law that protects their religious freedoms and right to close on days of worship.
The Franchisee Protection Act passed the Utah Senate and House of Representatives by a unanimous vote March 6 and was signed into law by Gov. Spencer Cox on March 17. It includes restrictions against a “religious day operation requirement” requiring franchisees to operate on a religious day, unless the requirement was already in place when the franchise agreement was signed. It also prohibits denying renewal of an agreement over a franchisee’s refusal to open on religious worship days.
It also requires any schedule changes outside of their original franchise agreements to be part of an amendment to the contract.
Rep. Ken Ivory, a Republican from Utah’s 39th District, sponsored the bill after a number of Nothing Bundt Cakes franchisees in Utah objected to the company’s new demand that stores be open on Sundays. Previously franchisees could remain closed on Sunday, per their franchise agreements.
Franchisees in Utah said the Texas-based bakery brand gave them a deadline of March 6 to comply with their mandate or risk being terminated.
The new law is notable in Utah, with a large population of members of the Church of Jesus Christ of Latter-day Saints, a religion in which shopping and working on Sunday is discouraged.
Rep. Ken Ivory, a Republican from Utah’s 39th District
“I’m very gratified for the passage of this bill, but mainly for these people that are being threatened with losing their livelihood and their investment,” Ivory said. “It’s gratifying to be able to take steps to help protect people that are being threatened and bullied by these franchise companies, and it’s also nice to stand up for the underdog.”
Following Utah’s passage of the law, a Nothing Bundt Cakes spokesperson issued the following statement: “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 Utah’s celebrations and everyday moments for years to come.”
Key provisions of the Franchisee Protection Act in Utah include:
- Protection against unilateral mandates: Franchisors are barred from requiring franchisees to open on a day that conflicts with their sincerely held religious beliefs which was a primary reason for investing in the franchise business, unless such a requirement was explicitly included in the original franchise agreement.
- Clear disclosure requirements: The law merely mandates that any religious day operation requirements must be clearly disclosed in the franchise agreement from the outset. This ensures that franchisees can make fully informed decisions before committing to a franchise investment.
- Legal remedies and penalties: In cases where a franchisor violates these protections, franchisees are entitled to seek actual damages, attorney fees, and other appropriate remedies. Civil penalties of up to $10,000 for a first violation, $25,000 for a second and $50,000 for subsequent violations provide a strong deterrent against noncompliance.
“A strong relationship between franchisor and franchisee is critical to any healthy franchise relationship and the long-term success of the brand and the franchisees behind it. The final legislation passed by the Utah legislature ensures that the legislation remains focused on protecting the religious liberties of franchisees, while also being narrowly tailored to ensure the law only applies in very specific circumstances and does not subject the broader franchise business model to unnecessary government interference,” said Jeff Hanscom, senior vice president of state and local government relations for the International Franchise Association.
Hanscom said he worked with Utah legislators on making amendments to Ivory’s bill.
Kelsey Hunt, who owns two Nothing Bundt Cakes stores in Utah, said she was overcome with joy with the passage of the new law. She has always closed her St. George store, which she opened six years ago, on Sundays so she can observe the day of worship.
She said she plans to submit a variance of her latest contract with corporate later this year that will allow her to close her Spanish Forks location, which she opened in December, on Sundays.
Nothing Bundt Cakes franchisee Kelsey Hunt was among the owners who pushed back on a corporate mandate to open stores on Sundays.
Hunt was one of seven franchisees in Utah who signed a letter addressed to the Nothing Bundt Cakes leadership team earlier this year that outlined their dissatisfaction with new mandate to open their businesses on Sunday. They also stated their support of Ivory’s proposed bill in the letter.
Hunt said the signatures on that letter represented nine of 10 Nothing Bundt Cakes locations in Utah.
“It’s been very humbling experience watching this bill go through the House and Senate,” Hunt said. “We’re extremely grateful for all of the work of Rep. Ivory and his team and the Senate did for making this happens for not only for our business but also our community, our employees. We are overjoyed that we will continue to be able to operate our St. George location according to our original terms that we agreed upon and continue to be able to be a part of this great brand.”
This story was updated to add a quote from IFA’s Jeff Hanscom.
