How can the Secured Party or receiver deal with the collateral of an Aunt Millies Bakeries distributor?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
pointed by Secured Party will (for purposes relating to responsibility for the receiver's acts or omissions) be considered to be the Distributor's agent. Secured Party may from time to time fix the receiver's remuneration and the Distributor will pay Secured Party the amount of such remuneration. Secured Party will not be liable to the Distributor or any other person
in connection with appointing or not appointing a receiver or in connection with the receiver's actions or omissions.
- (c) Secured Party or a receiver may take possession of all or any part of the Collateral and retain it for as long as Secured Party or the receiver considers appropriate, receive any rents and profits from the Collateral, carry on (or concur in carrying on) all or any part of the Distributor's business or refrain from doing so, borrow on the security of the Collateral, repair the Collateral, process the Collateral, prepare the Collateral for sale, lease or other disposition, and sell or lease (or concur in selling or leasing) or otherwise dispose of the Collateral on such terms and conditions (including among other things by arrangement providing for deferred payment) as Secured Party or the receiver considers appropriate. Secured Party or the receiver may (without charge and to the exclusion of all other persons including the Distributor) enter upon any place of business.
- (d) Secured Party or a receiver may use, collect, sell, lease or otherwise dispose of, realize upon, release to the Distributor or other persons and otherwise deal with, the Collateral in such manner, upon such terms (including among other things by arrangement providing for deferred payment) and at such times as Secured Party or the receiver considers appropriate. Secured Party or the receiver may make any sale, lease or other disposition of the Collateral in the name of and on behalf of the Distributor or otherwise.
- (e) All proceeds of Collateral received by Secured Party or a receiver may be applied to discharge or satisfy any expenses (including among other things the receiver's remuneration and other expense of enforcing Secured Party's rights under this Agreement), charges, borrowing (including the Lender Loan if any), taxes and other expenses affecting the Collateral or which are considered advisable by Secured Party or the receiver to preserve, repair, process, maintain or enhance the Collateral or prepare it for sale, lease or other disposition, or to keep in good standing any charges on the Collateral ranking in priority to any charge created by this Agreement, or to sell, lease or otherwise dispose of the Collateral, all as may be determined by Secured Party in its sole discretion.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, in the event of a distributor default, the secured party or a receiver has extensive rights regarding the collateral. They can take possession of all or part of the collateral and retain it as long as deemed appropriate. This includes the ability to receive rents and profits from the collateral and to carry on all or any part of the distributor's business, or choose not to do so. They also have the power to borrow against the security of the collateral, repair it, process it, prepare it for sale, lease, or other disposition, and ultimately sell or lease the collateral under terms and conditions they consider appropriate, including deferred payment arrangements. The secured party or receiver can enter any place of business without charge, excluding all other persons, including the distributor.
Furthermore, the secured party or receiver has broad authority to use, collect, sell, lease, or otherwise dispose of the collateral. They can release it back to the distributor or other persons, and generally deal with it in any manner, upon any terms, and at any times they consider appropriate. This includes making sales, leases, or other dispositions of the collateral in the name of and on behalf of the distributor.
All proceeds from the collateral can be applied to discharge expenses, including the receiver's remuneration, enforcement costs, charges, borrowings (including any lender loan), taxes, and other expenses related to preserving, repairing, processing, maintaining, or enhancing the collateral. These proceeds can also cover costs to keep any charges on the collateral in good standing that have priority over any charge created by the agreement, or to sell, lease, or otherwise dispose of the collateral. The secured party has sole discretion over these applications. Any remaining balance of the proceeds will be applied to the liabilities as the secured party considers appropriate, and thereafter will be accounted for as required by law. The distributor remains liable for any outstanding liabilities even after the collateral is realized.