Who determines how proceeds from the sale of collateral are applied for an Aunt Millies Bakeries distributorship?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the proceeds from any sale of a distributorship are handled in a specific order. The sale is for the account of the distributor. First, any monies owed to Aunt Millie's are deducted from the proceeds. Next, a reasonable reserve against open accounts is set aside. Then, all reasonable costs and expenses connected with the sale are deducted. These expenses include the cost of removing any off-code or damaged products in the distributor's sales area. Finally, any outstanding debts, liens, security interests, legal fees, and similar expenses are satisfied. After all these deductions, the remaining proceeds are turned over to the distributor.

This process ensures that Aunt Millie's Bakeries recovers any outstanding debts and covers expenses related to the sale before the distributor receives the remaining funds. This is a fairly standard practice in franchising, as it protects the franchisor's financial interests and ensures a smooth transfer of the distributorship.

For a prospective franchisee, this means that if you decide to sell your Aunt Millie's Bakeries distributorship, you will not receive the full sale price. Instead, the proceeds will be used to settle any outstanding obligations to Aunt Millie's and cover the costs associated with the sale. It is important to keep accurate records of all transactions with Aunt Millie's and to understand the potential costs involved in selling the distributorship to accurately estimate the net proceeds you might receive.