Can the Sales Area for an Aunt Millies Bakeries franchisee exclude certain Outlets?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
We will grant you the exclusive right to distribute certain Products under certain brand names within a designated geographic sales area ("Sales Area") as specifically defined in your Distribution Agreement. We will have the right to determine which Products we will sell to you for resale and distribution in your Sales Area. Your Sales Area may include certain outlets or areas beyond the geographic boundary but may also exclude certain outlets or areas within your geographic boundary (the "Outlets"). We will also grant to you a limited, non-exclusive license to use these trademarks in the Sales Area.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 32)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the Sales Area granted to a franchisee can indeed exclude certain outlets within the geographic boundary. The document specifies that while a Sales Area is defined geographically, it may include areas beyond the boundary or exclude specific outlets within it. These exclusions, referred to as "exceptions," are determined based on factors like specific delivery requirements or locations that make daily delivery impractical.
This means that a prospective Aunt Millies Bakeries franchisee might not have the right to service every single retail location within their defined geographic territory. Certain outlets, due to existing agreements or logistical challenges, could be excluded from the franchisee's responsibility. This could impact the franchisee's potential revenue and require careful consideration of the specific outlets included or excluded in the Sales Area.
The Distribution Agreement will include a description of the Sales Area as Schedule A, detailing any such exceptions. It is important to note that once the Sales Area is defined in the Distribution Agreement, it cannot be modified without written consent from both Aunt Millie's Bakeries and the franchisee. This underscores the importance of thoroughly understanding the Sales Area and any outlet exclusions before finalizing the agreement.
Furthermore, Aunt Millie's Bakeries retains the right to sell directly to outlets within the Sales Area if those outlets independently choose a delivery method other than Direct Store Delivery. In such cases, the franchisee will not receive compensation for those sales. This highlights a potential risk where the franchisee's revenue could be affected by the choices of individual outlets within their territory.