How does Aunt Millies Bakeries credit the distributor's account for purchased receivables?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §3.5 PURCHASE OF RECEIVABLES: AUNT MILLIE'S shall purchase from DISTRIBUTOR, and the DISTRIBUTOR HEREBY sells, assigns and transfers to AUNT MILLIE'S, all of DISTRIBUTOR'S right, title and interest in and to all of DISTRIBUTOR'S properly filled out and executed charge slips, all existing and future Accounts arising from the sale of Products to Chains or Outlets in the Sales Area and all proceeds thereof from the DISTRIBUTOR, at their face value, net of all discounts, free and clear of all liens, security agreements and encumbrances, other than in favor of, or permitted (in writing) by, AUNT MILLIE'S and its principal lender.
AUNT MILLIE'S shall credit DISTRIBUTOR'S account therefor.
DISTRIBUTOR shall promptly remit all such slips to AUNT MILLIE'S.
If any Chain elects to settle with DISTRIBUTOR on the basis of scan results, rather than charge slips, the credit to DISTRIBUTOR shall be adjusted for any difference between the charge slip and the actual sales reflected by the scan sale data.
The foregoing sale and purchase shall continue until termination of this Distribution Agreement, or until DISTRIBUTOR gives written notice of the termination of the foregoing sale to AUNT MILLIE'S, or, with respect to specific Accounts only, AUNT MILLIE'S gives notice that such Account's Chain's or Outlet's credit has not been approved by AUNT MILLIE'S.
For purposes of this Section 3.5, "Accounts" shall
mean accounts as defined in the Uniform Commercial Code as in effect in the state of organization of Distributor.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, Aunt Millie's Bakeries purchases receivables from the distributor, which includes charge slips and accounts from product sales to chains or outlets within the sales area. Aunt Millie's Bakeries buys these receivables at their face value, after deducting any discounts and ensuring they are free of liens or encumbrances not approved by Aunt Millie's Bakeries. In return for these receivables, Aunt Millie's Bakeries credits the distributor's account.
If a chain settles with the distributor based on scan results instead of charge slips, the credit to the distributor's account will be adjusted to reflect any difference between the charge slip amount and the actual sales data from the scan. This ensures that the distributor is credited accurately based on the final sales figures.
This process continues until the termination of the Distribution Agreement, or if the distributor provides written notice to end the sale of receivables. Aunt Millie's Bakeries can also give notice that it will no longer approve credit for a specific account's chain or outlet. This system allows Aunt Millie's Bakeries to manage accounts receivable while providing the distributor with prompt credit for sales, streamlining the financial transactions between the two parties.