Slapstick now knows that a distribution contract must clearly state the responsibilities and obligations of both parties during the term of the contract, in the event of termination and after the formal termination of the contract. The distribution agreement defines the responsibilities of both parties during and after the duration of the agreement. The distributor contained a provision that slapstick can only adjust prices once a year. Slapstick learned that this would benefit the distributor at the brewery`s expense. In times of inflation or other rising costs, the brewery was not given the opportunity to pass on the increased costs. Next time, it will insist on a provision allowing prices to be increased within 30 days. Relationships between manufacturers and distributors of craft beverages begin and develop over time. They`re growing up. They`re maturing. Sometimes they degrade.
They ended up perishing. External factors regularly increase the pressure on the distributor and manufacturer of craft beverages who request a change to the dealer agreement after a 30-day period. If the agreement allows for changes later this year, there are few problems. However, if the agreement allows for changes only once a year, one or both partners must face undue pressure until the agreement can take such an annual change into account. The best distribution agreements allow for changes during the year. Distributors have argued for exclusive territory, as without them, the distributor is not encouraged to provide adequate resources for distribution development for the producer. Distributor franchises can be exclusive and there is no other distributor that takes franchises in the territory; or not exclusively, where the new distributor could be one of several distributors that are franchised in the territory. Although this seemed reasonable from the outset, Slapstick learned that the allocation of an exclusive distribution in a region constituted an unnecessary leap of faith, without a proven balance sheet justifying such a monopoly. However, slapstick accepted an exclusive area, but lost the ability to franchise an additional distributor if the turnover was below target or when the sales team was below average.