What happens to the agreement with Aunt Millies Bakeries if the Distribution Agreement between the parties is terminated?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §2.2 TERMINATION OF THIS AGREEMENT: The parties agree that the Distribution Rights must be exercised in compliance with the terms of this Agreement, and that any termination of this Agreement requires DISTRIBUTOR, or AUNT MILLIE'S for the account of DISTRIBUTOR, to sell such Distribution Rights as provided herein.
- §9.4 ACTIONS FOLLOWING TERMINATION: Termination under either Section 9.2 or Section 9.3 above, shall entitle AUNT MILLIE'S to operate the business for the account of the DISTRIBUTOR, deducting from the revenues generated the reasonable expenses of such performance and delivering the balance, if any, to DISTRIBUTOR. Termination shall require DISTRIBUTOR to sell the Distribution Rights, and in the event that DISTRIBUTOR has not consummated a sale to a qualified purchaser within 90 days of the date of termination, AUNT MILLIE'S shall be authorized to sell DISTRIBUTOR'S Distribution Rights to such a purchaser at the best price which can be obtained after proper notice and advertisement. Said sale shall be for the account of the DISTRIBUTOR, and the provisions of Sections 7.3, 7.4 and 7.5 hereof shall apply.
- 4. TERM: LESSOR may terminate this Agreement on thirty (30) days written notice to AUNT MILLIE'S and, in any case, it shall automatically terminate on any termination of the Distribution Agreement previously entered into between the parties or the sale or transfer of the delivery vehicle or all of the Distribution Rights to which that Agreement applies.
- §12.2 SURVIVAL, BINDING AGREEMENT, AUNT MILLIE'S AFFILIATES: The obligations of DISTRIBUTOR shall survive the termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the termination of the Distribution Agreement necessitates the sale of the Distribution Rights. The distributor is responsible for selling these rights, or Aunt Millie's Bakeries will sell them on the distributor's behalf.
Specifically, if the distributor breaches the agreement, Aunt Millies Bakeries can operate the business for the distributor's account, deducting expenses and delivering the balance to the distributor. If the distributor doesn't sell the Distribution Rights to a qualified purchaser within 90 days of termination, Aunt Millies Bakeries is authorized to sell these rights at the best obtainable price after providing proper notice and advertisement. The sale will be for the distributor's account, subject to specific sections outlined in the agreement.
Furthermore, a separate agreement, such as a vehicle lease agreement, will automatically terminate upon the termination of the Distribution Agreement. This highlights the interconnectedness of the agreements and the importance of understanding the consequences of termination. The distributor's obligations also survive the termination of the agreement.