What are the consequences if Aunt Millies Bakeries fails to maintain the insurance required in Article 3?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
§4.4 NON-COMPLIANCE: Failure to carry out the obligations listed in this Article or elsewhere in this Agreement shall be considered a breach of this Agreement and shall entitle AUNT MILLIE'S to terminate this Agreement as more specifically set forth in Article 9 hereof, except that DISTRIBUTOR shall not be responsible for failures caused by Force Majeure; provided, however, that an event of Force Majeure shall not excuse DISTRIBUTOR from any obligations to pay for Products pursuant to Article 3.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
Based on the 2025 FDD, the document outlines the distributor's obligations, and states that failure to meet the requirements listed in Article 4 or elsewhere in the agreement is considered a breach. According to the FDD, Aunt Millies Bakeries is entitled to terminate the agreement if the distributor does not fulfill their obligations. However, the distributor is not held responsible for failures caused by Force Majeure, except for the obligation to pay for products as stated in Article 3.
Article 9 of the Aunt Millies Bakeries FDD further elaborates on termination conditions. If a distributor breaches the agreement, Aunt Millies Bakeries will provide a three-day written notice to allow the distributor to resolve the breach. If the distributor fails to address the breach within this period, Aunt Millies Bakeries has the right to terminate the agreement. However, in cases of repeated violations that significantly harm Aunt Millies Bakeries' trademarks or commercial reputation, Aunt Millies Bakeries can terminate the agreement immediately without providing an opportunity to cure the breach.
Upon termination, Aunt Millies Bakeries is entitled to operate the distribution business on behalf of the distributor, deducting reasonable expenses from the revenues generated and remitting the balance, if any, to the distributor. The distributor is required to sell the distribution rights, and if a sale to a qualified purchaser is not completed within 90 days of termination, Aunt Millies Bakeries is authorized to sell the distribution rights at the best obtainable price after providing proper notice and advertisement. The sale proceeds will be for the distributor's account, subject to the provisions outlined in Sections 7.3, 7.4, and 7.5 of the agreement.