Our mission is to Develop, Enhance and Maintain Profitability and Equity for every Pepperidge Farm Owner
POAA Gives Meaning to the Motto: "In Business For Yourself, Not By Yourself."
A FRESH LOOK AT STALE RETURNS
Last Friday, August 29, 2020, PF’s Director of DSD Strategy and Distributor Development, Pat Coppola, emailed PF’s latest pitch for every owner to focus on growing their businesses rather than worrying about the stale returns of their consigned inventories, along with the FY21 Stale Policy that PF plans to impose on every owner - regardless of whether or not it has contractual authority to do so. So, this week we take a fresh look at PF’s stale policies and practices to explain how PF unfairly converts Consignees (Owners) into captive customers of unsaleable stale returns of its Consigned Products by automatically deducting “OSL” (Over Stale Limit) stale overage charges from their hard-earned sales commissions.
WHAT IS CONSIGNED INVENTORY?
CONSIGNMENT is a bailment of goods for sale (which is different from a sale of goods) - it is an arrangement whereby a Consignor (PF) delivers goods to a Consignee (IDP) who acts as an authorized agent to transport and sell consigned goods for a percentage of the proceeds. The primary feature that distinguishes a “Consignment Agreement” from an “Agreement of Sale” is that the Consignor (PF) retains ownership (“Title”) of its consigned goods until they are sold to consumers. Simple logic, therefore, dictates that Consignors like PF are solely responsible for any and all financial losses attributable to returns of their unsaleable consigned goods. The reason for that is PF still owns their consigned inventories even after the shelf life expires and Consignees like IDP’s must return the unsaleable stale goods - owners pay for their own losses.
Check out Paragraph 2 in any version of PF’s existing Consignment Contracts.
HOW CAN PF CONVERT OWNERS INTO CUSTOMERS?
Every PF Consignment Agreement expressly limits the scope of PF’s policy-making discretion for Stale Products to changing the shelf life for its Consigned Products whenever it wants, but NONE includes any provisions to transfer title of Consigned Products from PF to an IDP when they become unsaleable stale returns. Indeed, in February 2020, Kyle Jordan, the VP of Partner Brand Strategy & Route Infrastructure for Campbell Snacks who formerly served as VP of Sales Execution & Distributor Engagement for Pepperidge Farm, officially declared that only “in some circumstances, Pepperidge Farm may charge distributors for certain things (pursuant, for example, to addenda, side letters, written agreements, etc.).... Pepperidge Farm can collect such charges, if owed, by way of deductions rather rather than requiring a separate payment from distributor to Pepperidge Farm.” So, PF clearly cannot impose Stale Objectives and deduct Stale Overage Charges from owners who did not sign a separate writing that expressly obligates them to pay PF for its financial losses attributable to stale returns of its consigned inventory. PF issued its overbroad “Enhanced” Stale Policy to every owner last week because they plan to continue applying it to every owner even though it only applies to the few, relatively new, owners who unwittingly volunteered to help PF cover its financial losses.
The next POAA Zoom Meeting will begin at 7pm EST on Tuesday, September 15th. Spend an hour networking with owners from all over the country, brainstorming about best practices to protect your equity, and finding out how others are handling the serious business issues that impact every owner. Join the discussions.
PLEASE TAKE NOTE
ZOOM NOW REQUIRES A MEETING PASSWORD
Our Password is: Swirlbread
or if you have a FREE Zoom account the code is 860 4691 4758 Password Swirlbread
TIP OF THE WEEK
Take a stand if you did not sign a separate written agreement that expressly authorizes PF to impose Stale Objectives and deduct stale charges from your sales commissions (which is different from a Freshness Letter). Demand in writing that PF stop its unfair stale practices because its "Enhanced" Stale Policy only applies to a few owners - not everyone.
The opinions and beliefs expressed in this newsletter are intended only to spark discussions about serious and ongoing business issues that impact every owner in PF’s distribution network. If you need or want legal advice, you must consult with your attorney.
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You are receiving this email because you own an Exclusive Pepperidge Farm Franchise and/or an Exclusive Pepperidge Farm Distributorship, and you should know that the Pepperidge Farm Owners Association of America is proactively protecting your rights.