What is the distributor's obligation regarding charge slips for Aunt Millies Bakeries?
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.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the distributor has specific obligations regarding charge slips. Aunt Millie's purchases the distributor's rights and interests in properly filled out and executed charge slips, as well as existing and future accounts from product sales to chains or outlets within the sales area. This transfer is done at face value, net of discounts, and free of liens, except those favored by Aunt Millie's. Aunt Millie's then credits the distributor's account for these charge slips.
The distributor is required to promptly remit all charge slips to Aunt Millie's. If a chain chooses to settle payments based on scan results instead of charge slips, the distributor's credit will be adjusted to reflect any differences between the charge slip and the actual sales data from the scan.
This arrangement continues until the termination of the Distribution Agreement. The distributor can provide written notice to terminate the sale of charge slips to Aunt Millie's, or Aunt Millie's can give notice if a specific account's chain or outlet's credit has not been approved. This process ensures that Aunt Millie's manages the accounts receivable while the distributor focuses on sales and distribution, but it also means the distributor's revenue is directly tied to the accurate and timely submission of charge slips.