Is the right to use Aunt Millies Bakeries trademarks transferable by the distributor?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
§10.1 PERMISSION FOR USE: Subject to the terms of this Agreement, AUNT MIL-LIE'S hereby grants to DISTRIBUTOR a limited, non transferable (except as provided pursuant to the assignability provisions of Article 7 of this agreement), nonexclusive right, in the Sales Area only, to use the trademarks set forth on Schedule B and any other trademarks, trade names or graphical designations on the packaging of the products supplied by AUNT MILLIE'S to DISTRIBUTOR hereunder (the "Marks"), solely to identify the Products and to identify DISTRIBUTOR as a distributor of the Products. Other than as expressly set forth in this Agreement, Distributor is granted no rights in the Marks. Distributor agrees not to sell or distribute the Products on behalf of AUNT MILLIE'S, either directly or indirectly, outside of the Sales Area and shall take commercially reasonable steps to prevent the distribution of the Products outside of the Sales Area by its respective agents or employees. DISTRIB-UTOR acknowledges that the Marks are the exclusive property of AUNT MILLIE'S, or its Affiliates, or, if applicable, the licensor(s) thereof, as the case may be (the "Owners"), and DISTRIBUTOR agrees that it will not dispute or contest the exclusive right, title and interest of the Owners in, or the validity of, any of the Marks, or assist others in doing same. DISTRIBUTOR acknowledges that it does not have, and will not acquire, any right, title or interest or any claim, monetary or otherwise, in any of the Marks or in the good will now or hereafter attaching thereto, and that all such goodwill shall inure solely to the benefit of the Owner of each Mark. DISTRIBUTOR agrees that it shall not use any of the Marks in any corporate title or trade name of any corporation, company, partnership, association, business or sole proprietorship of the
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the distributor's right to use Aunt Millie's trademarks is generally not transferable. Article 10.1 states that Aunt Millie's grants the distributor a limited, non-transferable right to use its trademarks. However, there is an exception related to the assignability provisions in Article 7 of the agreement, suggesting that under certain conditions related to assignment, the trademark usage rights may be transferable.
This means that while a distributor can typically not transfer the right to use Aunt Millie's Bakeries' trademarks to another party, there are specific circumstances under which it may be allowed, as detailed in Article 7 regarding the transfer of rights. A potential franchisee should carefully review Article 7 to understand the conditions under which the trademark usage rights can be transferred.
It is important for a prospective Aunt Millie's Bakeries distributor to understand the conditions under which they can use the trademarks and what happens to those rights if they sell their distribution rights. This information is crucial for valuing the distribution rights and understanding the limitations on their use of the trademarks. A prospective franchisee should seek clarification from Aunt Millie's Bakeries regarding the specifics of Article 7 and how it applies to the transfer of trademark usage rights.