View Full Version : Fair market value payout upon termination

09-11-2007, 02:20 PM
I am looking for comments regarding the following topics in contracts between the brewery and a distributor:

1. Termination:
a. time frames (90, 60, 30 day notices by either party)
b. buy-outs when termination is initiated by the brewery. I have am reviewing a contract right now that states 2 times the previous years gross profits this is how they want to calculate "fair market value".

Let me know what you have in your contracts regarding these two topics. I am very interested to see what is going on around the country.

Thank you very much in advance!
North Star Craft Brewery

09-11-2007, 03:02 PM
It will vary from state to state. Some states, like TN, the government regulates the brewer-distributor relationship, right down to how many days notice before termination, etc.

09-11-2007, 03:11 PM
Linus is correct - many states mandate minimum provisions in brewer-distributor contracts in regards to termination; just cause; wholesaler deficiencies, remedies etc. Around these parts the buy out provisions seem to be in the range of $4 to $7 per annual case equivalent sold.

09-11-2007, 04:33 PM
In NY its nearly impossible if the distributor doesn't want to let you go.

Varies state to state