What is the relationship between the 'Distribution Agreements' and the rights granted to the debtor by Aunt Millies Bakeries?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
ilar circumstances of whatsoever kind beyond the control of the party affected, which affects either party's performance of its obligations under this Agreement.
ARTICLE 2 RELATIONSHIP
- §2.1 EXTENT AND DURATION: AUNT MILLIE'S hereby recognizes DISTRIBUTOR'S ownership of the Distribution Rights, which ownership will continue until the Distribution Rights are sold or transferred as provided herein.
- §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.
- §2.3 INDEPENDENT CONTRACTORS: The parties intend to create an independent contractor relationship and it is of the essence of this Agreement that DISTRIBUTOR be an independent contractor for all purposes and DISTRIBUTOR shall only identify himself as such in all third party dealings. Any contrary final determination by any board, tribunal or court of competent jurisdiction shall require the amendment of this Agreement in any way necessary to establish an independent contractor relationship. As an independent contractor, DISTRIBUTOR has the right to operate the business as DISTRIBUTOR chooses, and shall bear all risks and costs of operating such business. DISTRIBUTOR has no authority to retain any person on behalf of AUNT MILLIE'S. It is expressly understood that DISTRIBUTOR has no claim, or right under any circumstances, to any benefits or other compensation currently paid by AUNT MILLIE'S to employees, or hereafter declared by AUNT MILLIE'S for the benefit of employees. No fiduciary relationship exists between the parties.
ARTICLE 3 SALE OF PRODUCTS
- §3.1 TITLE: All Products will be sold to DISTRIBUTOR absolutely, and title to and risk of loss of, the Products shall pass to DISTRIBUTOR upon delivery in accordance with §3.2 below.
- §3.2 DELIVERY: Except as otherwise provided herein, AUNT MILLIE'S agrees to sell and deliver to DISTRIBUTOR, and DISTRIBUTOR agrees to buy and accept, at such location as AUNT MILLIE'S may from time to time reasonably designate or approve, sufficient quantities of the Products to adequately and properly supply the Outlets in the Sales Area. AUNT MILLIE'S agrees to use commercially reasonable efforts to fill DISTRIBUTOR'S orders in a reasonable and timely fashion. In case of strike, shortage of materials, breakdown or other cause, AUNT MILLIE'S reserves the right to fill orders on such reasonable basis as circumstances then permit. AUNT MILLIE'S and DISTRIBUTOR recognize that cuts and pluses and, on rare occasions, cancellations of deliveries, in whole or in part, are an unavoidable aspect of fresh baked goods production.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the Distribution Agreement outlines the rights granted to the distributor. Aunt Millie's recognizes the distributor's ownership of the distribution rights, which continue until sold or transferred. The distributor must exercise these rights in compliance with the agreement, and any termination requires the distributor (or Aunt Millie's on their behalf) to sell the rights.
The agreement establishes an independent contractor relationship between Aunt Millies Bakeries and the distributor. The distributor operates their business independently, bearing all risks and costs. They have no authority to retain anyone on behalf of Aunt Millies Bakeries and are not entitled to employee benefits.
Aunt Millies Bakeries also retains a security interest in the distribution rights and all related assets to secure any debts the distributor owes to Aunt Millies Bakeries. A distributor default under the Security Agreement constitutes a default under the Distribution Agreement. The distributor is obligated to maximize product sales within their sales area, maintaining adequate stock and rotating products to ensure freshness.