How is the transfer fee calculated for Aunt Millies Bakeries Distribution Rights?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §7.5 PAYMENT OF FEE: In the event of a sale or transfer by DISTRIBUTOR, or by AUNT MILLIE'S for the account of DISTRIBUTOR, of all or any portion of the Distribution Rights, DISTRIBUTOR shall pay a Transfer Fee to AUNT MILLIE'S in an amount equal to TWO PERCENT (2%) of the sales price, in full consideration for the administrative activities undertaken by AUNT MILLIE'S in connection therewith.
- §7.6 EQUITY PAYMENT SCHEDULE: In the event of a sale or transfer by DISTRIBUTOR, where DISTRIBUTOR has equity in its Distribution Rights (where the value of DISTRIBUTOR's Distribution Rights and/or DISTRIBUTOR's routes sold or transferred exceeds the balance due from DISTRIBUTOR under any promissory notes to AUNT MILLIE's or to any third party), the equity will be paid to DISTRIBUTOR according to the payment schedule set forth on Schedule "D."
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, if a distributor sells or transfers their distribution rights, they must pay a transfer fee to Aunt Millie's Bakeries. This fee is calculated as two percent (2%) of the sales price. This payment serves as full consideration for the administrative work Aunt Millie's Bakeries undertakes during the transfer process.
This means that if a franchisee sells their distribution rights for $100,000, they would owe Aunt Millie's Bakeries a transfer fee of $2,000 (2% of $100,000). This fee is in place to compensate Aunt Millie's Bakeries for the administrative efforts involved in approving the transfer and ensuring a smooth transition to the new distributor.
Furthermore, if the distributor has equity in their distribution rights—meaning the value of the rights and routes exceeds any outstanding promissory notes to Aunt Millie's Bakeries or third parties—the equity will be paid to the distributor according to a payment schedule outlined in Schedule "D" of the Distribution Agreement. This ensures that the distributor receives the appropriate value for their business when it is sold, after settling any outstanding debts.