How is the transfer fee for Aunt Millies Bakeries Distribution Rights calculated?
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, the transfer fee for selling or transferring Distribution Rights is 2% of the sales price. This fee compensates Aunt Millie's Bakeries for the administrative work involved in the transfer.
If a distributor has equity in their Distribution Rights, meaning the value of the rights and routes exceeds what they owe to Aunt Millies Bakeries or a third party, the equity will be paid to the distributor according to a payment schedule detailed in Schedule "D" of the Distribution Agreement.
This means that if a franchisee decides to sell their distribution rights, they will need to factor in this 2% transfer fee when determining their potential profit from the sale. Additionally, the franchisee should carefully review Schedule D to understand the payment schedule for any equity they may have in their distribution rights.