Are there any exceptions to the assets covered by the UCC-1 filing for Aunt Millies Bakeries?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
request, agrees to participate in such promotion or discount price, AUNT MILLIE'S will contribute to the promotion or discount in accordance with its Promotion Participation Policy as amended from time to time.
- §3.7 SECURITY INTEREST: To secure the payment of any indebtedness or liability of DISTRIBUTOR to AUNT MILLIE'S, now or hereafter arising, pursuant to this Agreement or otherwise, DISTRIBUTOR hereby grants and conveys to AUNT MILLIE'S a continuing and general security interest in the Distribution Rights, all other assets used in connection with the exercise and operation of the Distribution Rights, all rights hereunder and all Products and receivables of the DISTRIBUTOR, and grants to AUNT MILLIE'S the rights of a secured party. DISTRIBUTOR agrees to execute the AUNT MILLIE'S Security Agreement and financing statement(s) to evidence such security interest. Any default under the AUNT MILLIE'S Security Agreement by DISTRIBUTOR shall be a default under this Agreement.
- §3.8 DEFAULT: Nothing herein shall be deemed to require AUNT MILLIE'S to fill an order of DISTRIBUTOR during any time when DISTRIBUTOR is in default of any payment or other obligation to AUNT MILLIE'S.
ARTICLE 4 DISTRIBUTOR'S OBLIGATIONS
§4.1 RESULTS: DISTRIBUTOR agrees to use its best efforts to develop and maximize sales of Products to Outlets within the Sales Area, by maintaining an adequate and fresh supply of Products in all Outlets; rotating Products to promote their sale before
they become stale or off code; promptly removing all stale or off code Products;
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to the 2025 Aunt Millies Bakeries FDD, a franchisee (referred to as "DISTRIBUTOR") grants Aunt Millie's a security interest in certain assets to secure any indebtedness or liability to Aunt Millie's. Specifically, the security interest covers the Distribution Rights, all other assets used in connection with the exercise and operation of the Distribution Rights, all rights under the Distribution Agreement, and all Products and receivables of the DISTRIBUTOR. This means Aunt Millie's has a legal claim on these assets, which could allow them to be seized if the franchisee defaults on their financial obligations to Aunt Millie's.
The FDD states that the franchisee must execute Aunt Millie's Security Agreement and financing statements to document this security interest. Furthermore, any default by the franchisee under the Aunt Millie's Security Agreement constitutes a default under the Distribution Agreement itself. This interlinking of agreements strengthens Aunt Millie's position, as a default on the security agreement directly impacts the franchisee's rights under the broader Distribution Agreement.
Additionally, the franchisee sells, assigns, and transfers to Aunt Millie's all rights, title, and interest in charge slips and existing/future Accounts arising from the sale of Products to Chains or Outlets in the Sales Area and all proceeds thereof, at their face value, net of all discounts, free and clear of all liens, security agreements and encumbrances, other than in favor of Aunt Millie's. This arrangement ensures that Aunt Millie's has a primary claim on these receivables, ahead of other potential creditors, further securing their financial interests.