What happens to the distribution rights if the Aunt Millies Bakeries distribution agreement is terminated?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §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.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, if the distribution agreement is terminated, the distributor is required to sell the distribution rights. If the distributor does not complete a sale to a qualified purchaser within 90 days of termination, Aunt Millie's Bakeries is authorized to sell the distributor's rights. This sale will be conducted at the best obtainable price after providing proper notice and advertisement.
The proceeds from the sale of the distribution rights will be for the account of the distributor. Aunt Millie's Bakeries will manage the sale process if the distributor fails to do so within the specified timeframe. The provisions outlined in Sections 7.3, 7.4, and 7.5 of the agreement will apply to this sale.
This arrangement ensures that the distribution rights are transferred efficiently upon termination, either by the distributor or by Aunt Millie's Bakeries on the distributor's behalf. The distributor is entitled to the proceeds from the sale, minus any reasonable expenses incurred by Aunt Millie's Bakeries during the process. This protects Aunt Millie's Bakeries's distribution network while providing the distributor with a mechanism to realize the value of their distribution rights even after termination.