Under what conditions can Aunt Millies Bakeries terminate the distribution agreement with cause?
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 |
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, Aunt Millie's Bakeries can terminate the Distribution Agreement with cause if the distributor defaults on their obligations under the Distribution 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 other than those considered non-curable, such as failure to pay amounts due or failure to deliver products in a timely and proper manner. In the event of a curable breach, Aunt Millie's Bakeries must provide the distributor with a three-business-day written notice to cure the breach. If the distributor fails to remedy the breach within this period, Aunt Millie's Bakeries can then terminate the agreement. However, repeated violations are considered a chronic breach that threatens significant harm to Aunt Millie's Bakeries, its trademarks, or commercial reputation, allowing Aunt Millie's Bakeries to terminate the agreement immediately without any further right to cure.
Non-curable defaults involve more severe actions such as criminal activity, threats to public health or safety, or actions that could significantly harm Aunt Millie's Bakeries, its trademarks, or commercial reputation. In these instances, Aunt Millie's Bakeries can terminate the Distribution Agreement immediately upon written notice, and the distributor does not have the right to cure the default. Upon termination, Aunt Millie's Bakeries has the right to operate the business for the distributor's account, deducting reasonable expenses from the revenues generated, and the distributor is required to sell the distribution rights.