What is the process for Aunt Millies Bakeries to approve a potential buyer of the distribution rights?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §7.1 CONDITIONS OF ASSIGNABILITY: The Distribution Rights are owned by the DISTRIBUTOR and may be sold or otherwise transferred in whole or in part by DISTRIBUTOR, provided that any such sale or transfer shall be subject to: (a) the prior written approval of AUNT MILLIE'S, which approval will not be unreasonably withheld; and (b) a right of first refusal on the part of AUNT MILLIE'S at the same terms and conditions offered to DISTRIBUTOR (the "Offer") by a bona fide purchaser or transferee (the "Offeror"). The right of approval and right of refusal referred to herein shall expire unless DISTRIBUTOR is notified by AUNT MILLIE'S that it does not approve the Offeror or that it wishes to exercise its right of first refusal by notice given within ten (10) business days after the last to occur of the following:
- i. receipt by AUNT MILLIE'S of written notice of intent to sell or transfer to a named Offeror on terms and conditions fully set forth in such notice; and
- ii. a personal interview of the Offeror's controlling shareholder by a designated AUNT MILLIE'S representative; and
- 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.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the distribution rights owned by the distributor may be sold or transferred, but this is subject to certain conditions. Aunt Millies Bakeries' prior written approval is required, and this approval will not be unreasonably withheld. Additionally, Aunt Millies Bakeries has a right of first refusal, meaning they have the option to purchase the distribution rights under the same terms offered by a potential buyer.
To initiate the approval process, the distributor must provide Aunt Millies Bakeries with written notice of their intent to sell or transfer the rights to a specific buyer, including all terms and conditions of the offer. A personal interview of the potential buyer's controlling shareholder will be conducted by a designated Aunt Millies Bakeries representative. Furthermore, Aunt Millies Bakeries requires the potential buyer's and their controlling shareholder's current financial statements, along with any other relevant information regarding their financial condition, health, credit, driving record, and other matters deemed reasonably appropriate for Aunt Millies Bakeries' assessment.
Aunt Millies Bakeries has ten business days after the latest of receiving the written notice, completing the interview, and receiving the financial and background information to notify the distributor whether they disapprove of the buyer or wish to exercise their right of first refusal. If Aunt Millies Bakeries does not respond within this timeframe, their approval and right of first refusal expire, and the distributor can proceed with the transfer to the buyer under the agreed terms. The transfer of a controlling interest in the distributor is considered a transfer of the distribution rights and is subject to the same terms and conditions.