Many states have enacted special legislation that protects the local distributor of alcoholic beverages from being willingly terminated as the brand distributor in a particular state by the brand owner or supplier of the product.
- Generally, when the supplier desires to terminate a distributor, it must do so in accordance with its contract, which may be written or oral.
- These laws, referred to as special industry franchise laws, have imposed a requirement that the supplier must first establish “good cause” prior to any termination.
- In addition, the supplier must also give the distributor advanced notice of its intent to terminate and an opportunity for the distributor to cure the issue at hand.
- The statutory provisions of the law supersede any contractual provisions to which the wholesaler and supplier may have agreed governing termination.
- In addition, many of these laws impose requirements on successor suppliers of the brand, continuing the statutory protections for as long as the distributor carries the brand in the territory.
Buchman Law Firm, LLP offers a comprehensive evaluation of the various state franchise laws governing spirits, wine and malt beverages as well as, where appropriate, the general franchise statutes that may apply in a particular jurisdiction.