Utah law now allows religious franchise owners to remain closed on Sundays
Complaints from owners of Nothing Bundt Cakes stores led to this new law
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A new Utah law will allow restaurant franchisees to close on Sundays without any punishment from the parent company. It’s the result of backlash after several owners of Nothing Bundt Cakes stores balked at a new contract requiring them to be open on their holy day.
You may recall that Chick-fil-A is famously closed on Sundays because the parent company’s owners are evangelical Christians and they decided to make it a rule for all their stores. Even though the company and its franchisees could make a lot of money by being open on a weekend—including in a stadium that hosts NFL games—this happens to be a quirk that makes many of their customers like them even more.
That’s not the case for Nothing Bundt Cakes.
The decades-old chain, which made over $741 million in revenue last year with over 600 locations, has its own rules for franchisees about how often they need to be open. None of those rules were a problem for the owners of nine of those stores in Utah when they signed their contracts.
But last year, those owners got a letter from corporate offices requiring everyone to make an adjustment: All of the stores would have to remain open on Sundays beginning in February of 2025. That was a change from their original contracts, which mandated no such thing.
A spokesperson for Nothing Bundt Cakes issued the following statement on behalf of corporate: “We communicated to our full franchise system that all bakeries would operate seven days a week and gave our franchisees more than a year to prepare. This new schedule will allow us to better meet the needs of our guests and is consistent with our franchise agreements.”
That last line is corporate-speak for “we can make more money if we force stores to be open when most people aren’t working.” Specifically, the company said franchisees had to be open 62 hours a week, and at least five of those hours had to be on Sunday.
Kelsey Hunt, who owns two of those Utah stores, asked if she could just extend hours the other days of the week to hit the 62-hour requirement while keeping her locations closed on Sunday, but the request was rejected.
It’s not just a religious issue for the owners, though.
“Because Sunday is a day of worship for so many people in our state, most stores choose to close Sundays and there is very little customer traffic on those days,” [franchisee Brad Berrett] said. “The business we’ll get on Sundays would barely cover the costs of keeping ours stores open.
“It makes very little sense to force us to remain open on Sundays,” Berrett continued, “but they’ve made it very clear that this is what they want. Why? Because they get 10 percent of every dollar you make, that’s why.”
He’s not wrong about the capitalistic desire. But he may be wrong about the limited customer traffic. While Mormons are supposed to rest on the Sabbath, Utah is drawing more non-Mormon families and businesses in recent years, and they may be eager to go out and get food on Sundays. But the company didn’t budge. They said the stores had to fall in line by March 6 or lose their businesses.
That’s when Republican Rep. Ken Ivory saw an opportunity to weaponize religion while claiming a moral victory. He proposed a bill, HB 441, that prohibited companies from forcing their franchisees to remain open if it violates their religious faith. The bill also bars companies from altering contracts to make franchisees stay open on those holy days and also prohibits companies from punishing owners who take those days off.
(The bill makes clear that these rules do not apply if the franchisees’ original contract said they would be open on those days or agrees to an amended contract that says the same thing.)
If a franchisor violates those rules, they can be fined anywhere from $10,000 to $50,000.
Ivory’s proposed legislation “will ensure that franchisees have the assurance that their religious rights and convictions are not infringed in being mandated to operate on Sundays unless such a stipulation was expressly negotiated and included in the initial franchise agreement,” according to a news release.
Gov. Spencer Cox signed the bill into law on Friday. So far, Nothing Bundt Cakes hasn’t said it would challenge the law, though there may be legal reasons they could do it since states aren’t allowed to pass laws that alter existing contracts.
But a bigger issue may be that this is very clearly a gift to Christian business owners who want Sundays off. In fact, Ivory himself has said in public posts that his bill “simply protects franchisees who bought into the franchise on the specific promise they would have Sundays off to be with, and worship with, their families.”
While the bill isn’t that specific—it uses the phrase “religious day”—you have to wonder what will happen if other religious business owners want to take more lucrative days off, as the Franchise Times suggests:
[The bill] doesn’t specify whether the legislation would offer similar religious freedom protections for Friday, the Sabbath for Muslims, or Saturday, the principal worship day for Seventh-day Adventists and followers of Judaism.
If a chain restaurant wanted to close on Fridays, perhaps the busiest day of the week, and all the owner has to do is cite religion, at what point can the parent company override the decision? What happens when people expect to be able to eat at a store, only to see that it’s closed, leading to negative reviews and a deterioration of the company’s brand?
Furthermore, the bill only creates an exemption for religious days. What happens if an non-theistic business owner has a personal reason for wanting to remain closed on a specific day of the week? Right now, that person wouldn’t be protected by this law, which gives far more power to religious business owners.
Utah’s law may have solved the problem of a few franchise owners, but it could create unexpected new ones.
I really don't care how the courts rule on franchise vs. franchisee business rights, but the law should be consistent. If the franchisee has a right to close on Sundays against the wishes of the franchise, then other franchisees should have the right to open on Sundays against the wishes of the franchise.
Put another way, if a religious store owner has the right to say no to some nonreligious franchise owner, then a nonreligious store owner should have the right to say no to some religious franchise owner. To do otherwise is to carve out a special legal privilege for religious store and franchise owners that nonreligious owners don't get.
The more I learn as a Christian, the more I admire my atheist friends. The laws needs to be fair and equal for everyone. Period!