After Aunt Millies Bakeries terminates the agreement, what is the distributor required to do with their distribution rights?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §9.4 ACTIONS FOLLOWING TERMINATION: Termination under either Section 9.2 or Section 9.3 above, shall entitle AUNT MILLIE'S to operate the business for the account of the DISTRIBUTOR, deducting from the revenues generated the reasonable expenses of such performance and delivering the balance, if any, to DISTRIBUTOR. Termination shall require DISTRIBUTOR to sell the Distribution Rights, and in the event that DISTRIBUTOR has not consummated a sale to a qualified purchaser within 90 days of the date of termination, AUNT MILLIE'S shall be authorized to sell DISTRIBUTOR'S Distribution Rights to such a purchaser at the best price which can be obtained after proper notice and advertisement. Said sale shall be for the account of the DISTRIBUTOR, and the provisions of Sections 7.3, 7.4 and 7.5 hereof shall apply.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, if the Distribution Agreement is terminated, the distributor is required to sell their Distribution Rights. If the distributor does not complete a sale to a qualified purchaser within 90 days of the termination date, Aunt Millies Bakeries is authorized to sell the distributor's Distribution Rights. This sale will be conducted at the best obtainable price after providing proper notice and advertisement.
The proceeds from the sale of the Distribution Rights will be for the account of the distributor. The provisions outlined in Sections 7.3, 7.4, and 7.5 of the Distribution Agreement will apply to this sale. These sections likely cover aspects such as the handling of proceeds, payment of fees, and other financial considerations related to the transfer of the Distribution Rights.
This requirement ensures that the Distribution Rights are transferred to another qualified party, allowing Aunt Millies Bakeries to maintain its distribution network. The 90-day period provides the distributor with an opportunity to find a buyer, but if they are unable to do so, Aunt Millies Bakeries takes over the process to ensure a timely transfer. This process protects Aunt Millies Bakeries's interests while also ensuring the distributor receives any balance from the sale after deductions.