Franchise Bill Intro’d in Maryland

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Senate Bill 704 seeks to add a statutory provision allowing a “small franchisor” (a beer manufacturer that produces 300,000 barrels or less annually and accounts for 10% or less of a “franchisee’s” (i.e. distributor’s) total annual sales volume) to terminate a franchise agreement with 15 days written notice. The bill also requires distributors provide written notice 1) to a small franchisor of the percentage of the total annual sales volume that the small franchisor accounts for in comparison to all other franchisors that the distributor is in agreement with at that time and 2) if a change in the percentage of total annual sales volume triggers a change in status of either a small franchisor or a large franchisor. Finally, the bill provides that, before termination of a beer franchise agreement, a small franchisor shall buy back at fair market value all the beer that the distributor purchased from the small franchisor and retains in inventory.

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