Growing Pains

“Growing Pains”  As your business blossoms and demand for your products grow, you will, of necessity, consider moving from self-distribution to the use of full time beer distributors.  Because of New York’s beer distribution Franchise Protection Law, you will need to give very careful consideration to your distribution choices as you expand.  Once appointed, you will not easily be able to remove distributors who disappoint you without establishing cause and incurring financial penalties.  Take the time to consider all candidates carefully, including the Distribution Agreements that are offered to you.  You will be required to “live with” those agreements for many years, so compare carefully the obligations and responsibilities of both parties.  Be particularly careful of contract “equity” provisions that will require you to share the proceeds of an eventual sale of your business.  Bottom line?  Expansion will bring rewards, but choose your expansion partners carefully.

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Vincent Obrien