What happens upon retirement or sale of assets by Aunt Millies Bakeries?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §9.1 BREACH: Except as set forth in this Article, or upon the sale or transfer of all of the DISTRIBUTOR'S Distribution Rights, this Agreement shall not be terminated or canceled, provided DISTRIBUTOR carries out the terms hereof. In the event DISTRIBUTOR breaches any obligations or covenants under this Agreement, AUNT MILLIE'S may terminate the Agreement as set forth below.
- §9.2 NON-CURABLE BREACH: If the breach by DISTRIBUTOR involves criminal activity, threatens public health or safety, constitutes an abandonment of any portion
the Sales Area, or threatens to do significant harm to AUNT MILLIE'S, its trademarks or commercial reputation, AUNT MILLIE'S may terminate this Agreement immediately upon written notice and DISTRIBUTOR shall have no right to cure.
- 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
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to the 2025 FDD, Article 9.1 states that the Distribution Agreement with Aunt Millies Bakeries will not be terminated or canceled upon the sale or transfer of all of the Distributor's Distribution Rights, provided the Distributor carries out the terms of the agreement. Article 7 outlines the procedures for selling or transferring Distribution Rights.
Specifically, Section 7.3 states that any sale shall be for the account of the Distributor. The proceeds of the sale will first have deductions for any monies owed to Aunt Millie's, a reasonable reserve against open accounts, all reasonable costs and expenses in connection with the sale (including 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. After these deductions, the remaining balance shall be turned over to the Distributor.
Furthermore, Section 7.4 specifies that in the event of a sale or transfer by or for the account of the Distributor, the Distributor must execute an appropriate bill of sale to the purchaser. The distributor must also provide a general release terminating, canceling, and surrendering the distributor's rights under the Distribution Agreement. This release also covers any and all claims against Aunt Millie's and its officers, directors, shareholders, employees, successors, and assigns arising under or out of this Agreement. This ensures a clean break and transfer of rights to the new distributor while protecting Aunt Millie's from future liabilities related to the previous distributor's actions.