Under what conditions can Aunt Millies Bakeries terminate the Distribution Agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Distribution Agreement | Summary | |
|---|---|---|---|
| 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 |
- §9.2 NON-CURABLE BREACH: If the breach by DISTRIBUTOR involves criminal activity, threatens public health or safety, constitutes an abandonment of any portion
the Sales Area, or threatens to do significant harm to AUNT MILLIE'S, its trademarks or commercial reputation, AUNT MILLIE'S may terminate this Agreement immediately upon written notice and DISTRIBUTOR shall have no right to cure.
- §9.3 CURABLE BREACH: A breach of this Agreement or a breach of any agreement with any Affiliate of AUNT MILLIE's, other than a breach under Section 9.2, AUNT MILLIE'S shall give DISTRIBUTOR three (3) business days written notice within which DISTRIBUTOR may cure the breach. "Affiliate" of AUNT MILLIE's shall include any company which has common ownership with AUNT MILLIE's and which provides goods and services, including financing services, to DISTRIBUTOR. If DISTRIBUTOR fails to cure such breach within said three (3) business day period, AUNT MILLIE'S may thereafter terminate this Agreement and DISTRIBUTOR shall have no further right to cure; provided, further, that the parties agree that repeated violations constitute a chronic breach and threaten significant harm to AUNT MILLIE'S, its trademarks or commercial reputation, and in such event AUNT MILLIE'S shall be entitled to terminate this Agreement pursuant to Section 9.2 and DISTRIBUTOR shall have no further right to cure.
- §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 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–36)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the company can terminate the Distribution Agreement if the distributor defaults on their obligations under the agreement or any other agreement with Aunt Millie's Bakeries or its affiliates. These defaults are categorized as either curable or non-curable.
Curable defaults include events of failure of performance such as failure to pay amounts due, or failure to deliver products in a timely and proper manner, or termination of any agreements the distributor has with Aunt Millie's Bakeries' affiliates. In the event of a curable breach, Aunt Millie's Bakeries will give the distributor three business days written notice to cure the breach. If the distributor fails to cure the breach within this period, Aunt Millie's Bakeries may terminate the agreement. However, repeated violations can be considered a chronic breach, which allows Aunt Millie's Bakeries to terminate the agreement immediately without the opportunity to cure.
Non-curable defaults involve more severe issues such as criminal activity, threats to public health or safety, or threats to do significant harm to Aunt Millie's Bakeries, its trademarks, or commercial reputation. In these cases, Aunt Millie's Bakeries can terminate the agreement immediately upon written notice, and the distributor does not have the right to cure the breach. Upon termination, Aunt Millie's Bakeries is entitled to operate the business for the account of the distributor, deducting reasonable expenses from the revenues generated and delivering the balance, if any, to the distributor. The distributor is required to sell the Distribution Rights, and if a sale is not completed within 90 days, Aunt Millie's Bakeries is authorized to sell the rights on the distributor's behalf.