How does Aunt Millies Bakeries handle the retirement or sale of assets?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- iii. receipt by AUNT MILLIE'S of the Offeror's and Offeror's controlling shareholder's current financial statements and such additional information as is relevant concerning the Offeror's and Offeror's controlling shareholder's financial condition, health, credit, driving record, and other matters reasonably appropriate to AUNT MILLIE'S' determination. If the contemplated sale or transfer is not a bona fide transfer for value, the price to be paid by AUNT MILLIE'S shall be the fair market value of the Distribution Rights at the time of receipt of such notice of intent. If AUNT MILLIE'S right of approval and right of first refusal expire as provided above DISTRIBUTOR may consummate the transfer to the Offeror on the terms of the Offer.
- §7.2 SALE OF STOCK: The transfer of a controlling interest in Distributor shall be deemed a transfer of the Distribution Rights and shall be subject to all of the terms and conditions of this Article 7.
- §7.3 PROCEEDS: Any sale shall be for the account of DISTRIBUTOR, and the proceeds of the sale, after deducting therefrom any monies owed by DISTRIBUTOR to AUNT MILLIE'S, a reasonable reserve against open accounts, all reasonable costs and expenses in connection with the sale (including without limitation the cost of removing any off code or damaged Products in DISTRIBUTOR'S Sales Area) and the satisfying of any outstanding debts, liens, security interests, legal fees and similar expenses, shall be turned over to DISTRIBUTOR.
- §7.4 TRANSFER DOCUMENTS: In the event of a sale or transfer by or for the account of DISTRIBUTOR as described in this Article 7, DISTRIBUTOR shall execute an appropriate bill of sale to the purchaser, and a general release terminating, canceling and surrendering DISTRIBUTOR'S rights under this Agreement and releasing any and all claims against AUNT MILLIE'S and its officers, directors, shareholders, employees, successors and assigns arising under or out of this Agreement, and AUNT
- MILLIE'S shall execute a new Distribution Agreement with the purchaser in the form of agreement then being used by AUNT MILLIE'S.
- §7.5 PAYMENT OF FEE: In the event of a sale or transfer by DISTRIBUTOR, or by AUNT MILLIE'S for the account of DISTRIBUTOR, of all or any portion of the Distribution Rights, DISTRIBUTOR shall pay a Transfer Fee to AUNT MILLIE'S in an amount equal to TWO PERCENT (2%) of the sales price, in full consideration for the administrative activities undertaken by AUNT MILLIE'S in connection therewith.
- §7.6 EQUITY PAYMENT SCHEDULE: In the event of a sale or transfer by DISTRIBUTOR, where DISTRIBUTOR has equity in its Distribution Rights (where the value of DISTRIBUTOR's Distribution Rights and/or DISTRIBUTOR's routes sold or transferred exceeds the balance due from DISTRIBUTOR under any promissory notes to AUNT MILLIE's or to any third party), the equity will be paid to DISTRIBUTOR according to the payment schedule set forth on Schedule "D."
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the sale of distribution rights is considered a transfer of assets. If a distributor wishes to sell their distribution rights, Aunt Millies Bakeries has certain rights and requirements. Aunt Millies Bakeries must receive the offeror's financial statements and other relevant information to determine their financial condition, health, credit, and driving record. If the sale is not a bona fide transfer for value, Aunt Millies Bakeries will pay the fair market value for the distribution rights.
When a distributor sells their rights, the proceeds from the sale are first used to cover any outstanding debts to Aunt Millies Bakeries, a reasonable reserve against open accounts, costs associated with the sale (including removing damaged products), and any outstanding debts, liens, legal fees, and similar expenses. After these deductions, the remaining proceeds are given to the distributor. The distributor must also execute a bill of sale to the purchaser and a general release, which terminates their rights under the Distribution Agreement and releases any claims against Aunt Millies Bakeries.
In the event of a sale or transfer by the distributor, Aunt Millies Bakeries charges a transfer fee equal to 2% of the sales price to cover their administrative activities. If the distributor has equity in their distribution rights (i.e., the value of the rights exceeds any outstanding debts), the equity will be paid to the distributor according to a payment schedule outlined in Schedule "D." This process ensures that Aunt Millies Bakeries maintains control over who enters into a distribution agreement and that any financial obligations are settled during the transfer of assets.