What is the 'Distribution Agreement' referenced in the Aunt Millies Bakeries Bill of Sale, and what does it define?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, AUNT MILLIE'S has heretofore executed a certain Bill of Sale pursuant to which AUNT MILLIE'S sold to DISTRIBUTOR certain Distribution Rights (as defined in the Distributor's Agreement referred to below) and certain other personal property used in connection with the exercise of the Distribution Rights (herein the
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the Distribution Agreement is a key document executed alongside the Bill of Sale, outlining the terms and conditions under which a distributor operates. The Bill of Sale transfers the Distribution Rights and other assets from Aunt Millie's to the distributor, while the Distribution Agreement defines the specifics of that relationship.
Specifically, the Distribution Agreement defines key terms such as 'Sales Area,' which is the geographic territory where the distributor has rights, and 'Outlets,' which are the specific locations the distributor is authorized to sell to. It also defines 'Products,' which are the baked goods the distributor is allowed to sell under the Aunt Millie's trademarks, as well as other brands like Sunbeam and Hill-Billy under certain conditions. The agreement also specifies 'Direct Store Delivery,' which is the method of delivering and merchandising products to the outlets.
Furthermore, the Distribution Agreement addresses the transfer of distribution rights, stating that any transfer of a controlling interest in the distributorship is considered a transfer of these rights and is subject to the agreement's terms. In the event of a sale, Aunt Millie's has the right of first refusal and must execute a new Distribution Agreement with the purchaser. The distributor is also responsible for paying a transfer fee to Aunt Millie's, equal to 2% of the sale price.
In essence, the Distribution Agreement defines the scope and limitations of the distributor's rights and responsibilities, including the territory, customers, products, and methods of operation. It also outlines the conditions under which the distribution rights can be transferred and the fees associated with such transfers. A prospective franchisee should carefully review this agreement to fully understand their rights and obligations.