Can Aunt Millies Bakeries sell the distribution rights on behalf of the distributor?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, Aunt Millies Bakeries can sell a distributor's distribution rights under specific circumstances. If the Distribution Agreement is terminated, Aunt Millie's is authorized to sell the distributor's rights if the distributor fails to sell them to a qualified purchaser within 90 days of termination. This action ensures that the distribution rights are transferred efficiently even if the distributor is unable or unwilling to complete the sale themselves. The sale is conducted to obtain the best possible price after proper notice and advertisement.

The FDD specifies that such a sale by Aunt Millies Bakeries would be for the account of the distributor. This means that the proceeds from the sale, after deducting reasonable expenses incurred by Aunt Millies Bakeries in facilitating the sale, would be passed on to the distributor. Additionally, the provisions outlined in Sections 7.3, 7.4, and 7.5 of the Distribution Agreement, which likely cover aspects such as transfer processes and fees, would also apply to this type of sale.

This arrangement provides a safety net for both Aunt Millies Bakeries and the distributor in the event of termination. It ensures continuity of the distribution network for Aunt Millies Bakeries while also allowing the distributor to realize some value from their distribution rights, even if they cannot manage the sale independently. However, the distributor should be aware that Aunt Millies Bakeries will deduct expenses from the sale proceeds, and the final amount received by the distributor may be affected by these deductions and the prevailing market conditions at the time of sale.