No Cause Termination Becomes Law in Maryland

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Becoming law with the Governor’s signature, House Bill 1080 reduces, from 180 days to 45 days, the number of days that a brewery must wait after notifying a distributor of its intent to terminate or refuse to renew a beer franchise agreement before terminating the agreement, if the brewery produces 20,000 or fewer barrels of beer per year. Such a brewery is authorized to terminate or refuse to continue or renew a franchise agreement without good cause and is no longer required to give its franchisee an opportunity to correct a deficiency if that is the reason the agreement is being terminated. Before termination, a brewery must enter into a termination agreement with the terminated franchisee which includes compensation to the terminated franchisee for the fair market value of the terminated franchise and requires the brewery to repurchase its beer in a specified manner.