What condition must the final installment meet for the Aunt Millies Bakeries loan?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
I further understand that the authorization to deduct for the loans and lease is a condition of Lenders' and Lessor's consents to make the loans and lease and may not be terminated, but that the authorization to deduct for bookkeeping and insurance payments is optional and may be terminated at any time on 30 days written notice.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
Based on the 2025 FDD, the authorization to deduct loan payments is a condition of the lender's consent to make the loan for an Aunt Millies Bakeries distributorship. The document specifies that this authorization to deduct loan payments cannot be terminated by the distributor. However, the authorization to deduct for bookkeeping and insurance payments is optional and can be terminated with 30 days written notice.
This condition means that as a franchisee, you are obligated to allow Aunt Millies Bakeries to deduct loan payments directly. This ensures the lender that payments will be consistently made, reducing their risk. However, it also means that you lose some control over those funds, as they are automatically deducted before you receive them.
The FDD excerpt does not specify what happens if the franchisee fails to maintain this authorization. It is important to note that this mandatory deduction applies specifically to loan and lease payments, while deductions for bookkeeping and insurance are optional and can be terminated with a 30-day written notice. Prospective franchisees should clarify with Aunt Millies Bakeries the implications of failing to maintain the mandatory deduction authorization for the loan and lease payments.