$800

Business Description

The principal address for BFBD and its affiliated companies is: 255 Business Center Drive, Horsham, Pennsylvania 19044. The principal address for Grupo Bimbo is Prolongacion Paseo de la Reforma No. 1000, Col. Desarrollo Santa Fe. Del. Alvaro Obgregon, C.P. 01210 Mexico D.F. As of 2001, the franchisor was owned by George Weston Bakeries Inc., a subsidiary of Canada-based Weston Foods, Inc., and operated under the name George Weston Bakeries Distribution, Inc. In January 2009, Grupo Bimbo, through its U.S. subsidiary, BBU, acquired all of the issued and outstanding shares of capital stock of Weston Foods Inc. The franchisor and its parent continued to exist as the same companies after the January 2009 transaction but simply changed their names. The name of George Weston Bakeries Inc. was changed to Bimbo Foods Bakeries Inc. (which has since been merged into BBUSA). Simultaneously, the franchisor’s name was changed from George Weston Bakeries Distribution, Inc. (“GWBD”) to Bimbo Foods Bakeries Distribution, Inc., which was converted to Bimbo Foods Bakeries Distribution, LLC in 2013. In November 2011, BBU and Grupo Bimbo completed a transaction with Sara Lee Corporation (“Sara Lee”), pursuant to which BBU acquired Sara Lee’s North American Fresh Bakery business. Sara Lee sold fresh bakery products under the primary brand, SARA LEE. This transaction included all of the distribution agreements (also called franchise agreements) to which Sara Lee Distribution, LLC and before it, Sara Lee Fresh, Inc. were parties, as well as Sara Lee’s approximately 13,000 North American Fresh Bakery employees. The sale also included 41 bakeries in the U.S. Subsequent to the sale to BBU, Sara Lee Distribution, LLC changed its name to Earthgrains Distribution, LLC (“EGD”). Pursuant to the sale, EGD acquired by assignment, the rights and obligations under all of the distribution agreements into which Sara Lee and Sara Lee Fresh, Inc. had entered. Until December 31, 2014, BFBD and its affiliates BBDC, and EGD all operated as separate entities and offered similar franchises. On December 31, 2014, BBDC was merged into BFBD, with BFBD being the surviving entity after the merger. EGD continues to operate as separate entity and continues to offer similar franchises.

Prior Experience

BFBD has been in the business of selling distribution rights for bakery products since 1996. Today, BFBD has franchised routes to sell and distribute a selection of bakery products including without limitation Products under the ARNOLD, BOBOLI, ENTENMANN’S, FREIHOFER’S, THOMAS’, BROWNBERRY, STROEHMANN’S and/or SARA LEE brands throughout the United States. Further information regarding the relevant product brands, and Distributors by geographic area, can be found in Item 13 and Item 20 of this disclosure document, respectively.

Business Offered

BFBD was formed in 1996 to engage in the wholesale sale and distribution of fresh bakery products to distributors to sell to retail food outlets, restaurants, and institutions. Since that time, BFBD and its affiliates have established a network of independent distributors. BFBD offers to third parties the right to sell and distribute some of the affiliates’ Products (as defined below) in specific geographic territories, pursuant to Distribution Agreements (as described below). BFBD is not involved in any other business activities other than franchising. BFBD has acquired from its affiliates the exclusive rights to sell franchise distribution rights for Products to selected Outlets in certain Sales Areas by establishing a network of independent franchised distributors to distribute certain of these Products in certain markets. We grant distribution rights that will allow you to sell and distribute certain designated bakery products (“Products”) under some of our trademarks (“Marks”) through direct delivery (“Direct Store Delivery”) to stores and other outlets (collectively, “Outlets”) in the geographic area (“Sales Area”) designated in your distribution agreement (this agreement is sometimes also called a franchise agreement, but for the sake of consistency is referred to in this document as “Distribution Agreement,” and franchisees are also referred to in this document as “Distributors”). The rights granted to you under the Distribution Agreement are referred to as “Distribution Rights.” The terms “Products,” “Marks,” “Direct Store Delivery,” “Outlets,” “Sales Area,” and “Distribution Rights” are more specifically defined in the Distribution Agreement. We determine the boundaries of the Sales Areas that we offer as Distribution Rights and the purchase price for each Sales Area that we sell (as opposed to those sold by existing Distributors) according to a formula based on the sales history of Outlets in the Sales Area or in a nearby or similar area. We may offer discounts to existing employees and existing Distributors that purchase Distribution Rights. If you acquire Distribution Rights pursuant to a Distribution Agreement with us, as a Distributor, you will be granted the exclusive right to sell and distribute certain Products under certain brand names or private labels within your designated geographic Sales Area. BFBD will have the right to determine which Products will be sold to you for distribution in your Sales Area, and it and/or its affiliates will sell the Products to you for resale to retail food stores (except thrift stores) and/or restaurants, institutions and food service customers whose business includes the sale of food to the general public and who purchase Products by Direct Store Delivery (“Outlets”).

Initial Fees

You must pay an initial purchase fee to acquire your Distribution Rights. When acquiring Distribution Rights directly from BFBD, this purchase fee is equal to a multiple of the average projected weekly net sales of different categories of certain specified Products to Outlets located in your Sales Area. (As discussed in more detail in Item 10, this fee may be able to be financed.) The multiples may vary with the Product Category and Sales Area, depending on a variety of factors, including but not limited to the following: the type of area (e.g., urban, suburban or rural); the size of the Sales Area; the physical features of the land (e.g., bridges, mountains, etc.); the area of the country; the population density of the area; the density of the business population; the average type of retail store in the Sales Area; the average size of an average retail store; and other socioeconomic factors common to the area. Existing non-franchised independent operators and/or employees of one or more BFBD affiliates may be eligible for a discount (an “Incentive Equity Adjustment”) off of this fee if they become a franchised distributor. The amount of any discounts or credits depends on BFBD’s estimation of the value of an existing non-franchised independent operator’s route; they are generally on a sliding scale that typically does not exceed $15,000. You will be given specific information for your Sales Area. There can be no assurance that the actual Sales you achieve in your Sales Area will match or exceed the sales projected by BFBD in determining your initial fee for your Distribution Rights. See Item 19 below. When purchasing Distribution Rights directly from an already existing Distributor, the initial purchase fee is established by, and payable to, the selling Distributor; although BFBD will facilitate the transfer of the Distribution Rights to you. BFBD estimates that the initial fees in connection with the purchase of your Distribution Rights will range from $8,160 (before adjustments for any applicable discounts or credits) to $316,400 based on the factors described above. This initial fee is to be paid in one lump sum payment at the time of the delivery of the Bill of Sale and execution of the other agreements (i.e., any other agreements applicable to you that are included with this disclosure document, e.g., Distribution Agreement, any applicable financing documents, and any security agreements), some or all of which may be financed as detailed in Item 10 and Exhibit B and Exhibit J to this disclosure document. This initial fee is non-refundable. Whether you buy the Distribution Rights directly from us or buy them from another Distributor in a transaction that constitutes a transfer, if you have entered into a Buy Back Agreement with us, at any time within the period specified in the Buy Back Agreement: (a) we may exercise an option to purchase all or a portion of your Distribution Rights by paying you the purchase price set forth in the Buy Back Agreement; or (b) you may exercise an option to sell your Distribution Rights to us at the purchase price set forth in the Buy Back Agreement. In each case, such purchase price shall be the fair market value of your Distribution Rights (and any related assets, e.g., computer hardware and accessories, as agreed to by the parties), taking into consideration various factors, including the history and trajectory of your performance (including weekly sales and returns data), general economic conditions and economic conditions within the relevant industries (including those of BFBD and its affiliates, suppliers, and vendors), geographic factors (including competition and opening/closing of Outlets and Sales Areas). We may deduct from the purchase price any money that you owe to us, a reasonable reserve against open accounts, and our reasonable costs and expenses for the sale (including the cost to remove any damaged or Off Code Products in your Sales Area). As a condition to receiving the purchase price, you must execute and deliver a General Release to us. If you lease your delivery vehicle under our optional leasing program through BUSH Leasing or B & G Leasing, at our option we may also assume the lease if your vehicle is in the same condition as when you took possession, excepting ordinary wear and tear. (Examples of the forms of the Buy Back Agreement, and General Release are included as Exhibit D and Exhibit G, respectively, to this disclosure document.) In addition, prior to operating your business, you must pay a fee of approximately $2,340-$3,000 to BFBD or a non-affiliated vendor or seller of equipment to purchase a hand-held computer system. This fee along with the initial fee noted above in connection with your Distribution Rights, are the only fees that you are required to pay for goods and/or services provided by BFBD (assuming, in the case of the hand-held computer fee, that you opt to purchase the system from BFBD) prior to operating under your Distribution Rights. You must also purchase a sufficient opening inventory of Products (typically ranging from $2,500 to $12,000) from BFBD’s designated affiliates for proper and adequate distribution to Outlets in your Sales Area, which is purchased on credit; the cost will likely vary depending upon the mix and quantities of product that your customers require.

Financing

As we note above, we offer optional financing through either ACF under which you can, under certain conditions, finance up to 100% of the purchase price for your Sales Area based on a formula used to determine maximum available financing through one of these two loan programs. You must meet ACF’s lending criteria in order to qualify for financing. We do not require that you finance your investment or use one of our selected lenders. Assuming that you need financing to purchase Distribution Rights, you are free to select a different lender of your own choosing (i.e., other than ACF), provided that the terms and conditions of any agreements or documents that such lender requires you to sign in order to obtain financing do not conflict with any documents or agreements that we require that you sign as part of becoming a Distributor. We may discontinue or modify this financing program, and add or change lenders, at any time without notice. Different Distributors may receive different terms for their financing. Any changes that we make will not affect financing that is then in place. Your loan may be sold, assigned or discounted to a third party. Note that the loans offered by ACF are for a fixed amount and not an equity line that you can draw on periodically. Optional Financing Arranged by Franchisor (Subject to applicability and qualification) A. Financing Through ACF (ACF is a subsidiary of BBU, Inc., a U.S. affiliate of Grupo Bimbo).

Franchisee Revenue and Profit

Representations Regarding Financial Performance We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting Shelly Seligman or Matthew Wright at 255 Business Center Drive Horsham, Pennsylvania 19044 / (215) 672-8010, the Federal Trade Commission, and the appropriate state regulatory agencies.