There are multiple business agreements that need to be in place when clients are starting a distillery business. One of the most important types of contract a distillery business will enter into is a distillery distribution agreement. Our Chicago business attorneys negotiate and draft these agreements to protect our clients’ interests. The following is an overview of distribution agreements.
Distribution
Distribution agreements are essential in any distillery business. A distributor’s main responsibilities are warehousing and delivering a manufacturer’s product. Distributors rarely engage in selling and promoting the product for small distillery business owners. A distributor’s duties are still critical for a business’s success and distillery distribution agreements are the framework that define and enforce the relationship between a manufacturer and distributor. Our Chicago business attorneys ensure the distribution agreement is well drafted and comprehensive in order to develop a mutually beneficial and positive relationship between the client and his or her distributor.
We strategize when drafting and negotiating agreements on behalf of our clients. For instance, we find that drafting the agreement so that the distributor is nonexclusive, but the franchising is limited to only one distributor, suggests that additional distributors would not be added to the nonexclusive territory so long as the distributor met the manufacturer’s objectives. This provides incentive without restricting the manufacturer’s options. We make sure to include provisions on termination, provisions addressing the parties’ responsibilities after termination of the agreement, provisions specifying which products may be returned for credit, etc., in order to avoid a deterioration of the parties’ relationship.
A distillery distribution agreement is a vital instrument in building a relationship between a manufacturer and distributor. With a comprehensive agreement, a positive and beneficial relationship can develop. However, a poorly‐executed agreement may often lead to legal complications and the deterioration of any existing relationship. This is both time consuming and expensive for the parties involved. Therefore, it is essential that a comprehensive distributor agreement is in place. Moreover, we negotiate for exclusive or nonexclusive distribution agreements, based on our client’s wishes and best interests.