Who fixes the receiver's remuneration in the Aunt Millies Bakeries agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
The profit margins on the Products sold by DISTRIBUTOR will be established by AUNT MILLIE's and are subject to change at any time..
DISTRIBUTOR agrees that Non-Recurring Charges noted on Form IO13 attached to this Agreement as Schedule "C" will be assessed and deducted from the weekly settlement, whether or not DISTRIBUTOR signs said form.
DISTRIBUTOR acknowledges and agrees that the charges on Schedule C" (Form IO13) are subject to change by AUNT MILLIE's at any time.
- §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 the 2025 Aunt Millies Bakeries FDD, Aunt Millie's Bakeries purchases receivables from the distributor. Aunt Millie's Bakeries purchases all of the distributor's rights, titles, and interests in properly filled out and executed charge slips, existing and future Accounts arising from the sale of Products to Chains or Outlets in the Sales Area, and all proceeds thereof. These purchases are made at face value, net of all discounts, free and clear of all liens, security agreements, and encumbrances, other than those in favor of Aunt Millie's Bakeries. Aunt Millie's Bakeries then credits the distributor's account accordingly.
If any Chain chooses to settle with the distributor based on scan results instead of charge slips, the credit to the distributor will be adjusted for any difference between the charge slip and the actual sales reflected by the scan sale data. This sale and purchase arrangement continues until the termination of the Distribution Agreement, or until the distributor provides written notice of termination to Aunt Millie's Bakeries. Aunt Millie's Bakeries can also give notice that a specific Account Chain's or Outlet's credit has not been approved by them, which would terminate the arrangement for that specific account.
For a prospective Aunt Millies Bakeries franchisee, this means that Aunt Millie's Bakeries controls the purchase of receivables and sets the terms. The franchisee is obligated to sell their receivables to Aunt Millie's Bakeries under the conditions outlined in the agreement, giving Aunt Millie's Bakeries significant control over the franchisee's cash flow related to sales to Chains or Outlets.