What is considered a 'chronic breach' that allows Aunt Millies Bakeries to terminate the agreement immediately?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
If DISTRIBUTOR fails to cure such breach within said three (3) business day period, AUNT MILLIE'S may thereafter terminate this Agreement and DISTRIBUTOR shall have no further right to cure; provided, further, that the parties agree that repeated violations constitute a chronic breach and threaten significant harm to AUNT MILLIE'S, its trademarks or commercial reputation, and in such event AUNT MILLIE'S shall be entitled to terminate this Agreement pursuant to Section 9.2 and DISTRIBUTOR shall have no further right to cure.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, a 'chronic breach' occurs when repeated violations of the agreement threaten significant harm to Aunt Millie's, its trademarks, or its commercial reputation. In such instances, Aunt Millie's is entitled to terminate the agreement immediately, and the distributor has no further right to cure the breach.
This means that if a distributor repeatedly fails to meet the obligations outlined in the agreement, even if each individual failure might seem minor, Aunt Millie's can terminate the agreement without giving the distributor an opportunity to correct the problem. This is a significant risk for franchisees, as it means that consistent adherence to all terms of the agreement is crucial.
In cases of termination, Aunt Millie's has the right to operate the business for the account of the distributor, deducting reasonable expenses from the revenues generated and delivering the balance, if any, to the distributor. The distributor is required to sell the Distribution Rights, and if a sale is not completed within 90 days of termination, Aunt Millie's is authorized to sell the Distribution Rights on behalf of the distributor.