How is a 'transfer by distributor' defined in the Aunt Millies Bakeries distribution agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Distribution Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | §2.1, and Article 9 | Until sold by you or terminated by us for cause as defined in the Distribution Agreement |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for Distributor to renew or extend the term | Not Applicable | Not Applicable |
| d. | Termination by Distributor | Not Applicable | Not Applicable |
| e. | Termination by Franchisor without “cause” | Not Applicable | Not Applicable |
| f. | Termination by Franchisor with “cause” | §§ 9.1, 9.2, 9.3 | We can terminate only if you default in your obligations under the Distributor Agreement or any other agreement with us or with our Affiliates |
| g. | “Cause” defined - curable defaults | §9.3 | Any event of failure of performance other than those in §9.2. Examples are failure to pay amounts due, failure to deliver Products in a timely and proper manner, termination of any agreements you have with our Affiliates |
| h. | “Cause” defined – non-curable defaults | § 9.2 | Failure of performance involving criminal activity, threat to public health or safety, or threat to do significant harm to Aunt Millie’s Bakeries, its trademarks or commercial reputation |
| i. | Distributor’s obligations on termination/non-renewal | §§ 2.2, 9.4, 10.4 | Sell Distribution Rights, stop use of Principal Marks and return of marketing promotional material provided by us |
| j. | Assignment of contract by Franchisor | Not Applicable | Freely assignable by us |
| k. | “Transfer by Distributor” defined | §§ 7.1, 7.2 | Distribution rights sold or transferred by you or your estate |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–36)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, a 'transfer by distributor' is defined as distribution rights sold or transferred by you or your estate. This definition is found in Sections 7.1 and 7.2 of the distribution agreement.
This means that if a distributor decides to sell their distribution rights or if the rights are transferred through their estate, it is considered a 'transfer by distributor' under the agreement. Aunt Millie's Bakeries retains the right to approve such transfers, but this approval cannot be unreasonably withheld.
This provision is important for prospective franchisees to understand because it outlines the circumstances under which they can transfer their rights and what conditions apply. Knowing that Aunt Millie's Bakeries' approval is required but cannot be unreasonably withheld provides some assurance, but it's crucial to understand the criteria Aunt Millie's Bakeries uses for approval to ensure a smooth transfer process.