Does the Aunt Millies Bakeries agreement specify who the Distribution Rights are purchased from?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- MILLIE'S shall execute a new Distribution Agreement with the purchaser in the form of agreement then being used by AUNT MILLIE'S.
- §7.5 PAYMENT OF FEE: In the event of a sale or transfer by DISTRIBUTOR, or by AUNT MILLIE'S for the account of DISTRIBUTOR, of all or any portion of the Distribution Rights, DISTRIBUTOR shall pay a Transfer Fee to AUNT MILLIE'S in an amount equal to TWO PERCENT (2%) of the sales price, in full consideration for the administrative activities undertaken by AUNT MILLIE'S in connection therewith.
- §7.6 EQUITY PAYMENT SCHEDULE: In the event of a sale or transfer by DISTRIBUTOR, where DISTRIBUTOR has equity in its Distribution Rights (where the value of DISTRIBUTOR's Distribution Rights and/or DISTRIBUTOR's routes sold or transferred exceeds the balance due from DISTRIBUTOR under any promissory notes to AUNT MILLIE's or to any third party), the equity will be paid to DISTRIBUTOR according to the payment schedule set forth on Schedule "D."
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to the 2025 Aunt Millies Bakeries FDD, the Distribution Rights can be purchased either from the existing distributor or from Aunt Millie's Bakeries itself under certain conditions.
The FDD states that Aunt Millie's recognizes the distributor's ownership of the distribution rights, which continues until the rights are sold or transferred. If a distributor wants to sell or transfer their distribution rights, they must pay Aunt Millie's Bakeries a transfer fee equal to 2% of the sales price. The sale is for the account of the distributor, who receives the proceeds after deductions for monies owed to Aunt Millie's, a reserve against open accounts, sale expenses, and satisfaction of outstanding debts.
Aunt Millie's Bakeries may also sell the distribution rights for the account of the distributor, particularly if the agreement is terminated due to a breach by the distributor and the distributor fails to sell the rights within 90 days of termination. In such cases, Aunt Millie's is authorized to sell the distribution rights to a qualified purchaser at the best price obtainable after providing proper notice and advertisement. The proceeds from this sale are also for the account of the distributor, subject to similar deductions as in a sale initiated by the distributor.
Therefore, a prospective Aunt Millies Bakeries franchisee could potentially purchase distribution rights either directly from Aunt Millie's Bakeries or from an existing distributor, depending on the circumstances and the terms of the Distribution Agreement.