Summary. Selling through partners multiplies reach and multiplies risk, because a distributor is simultaneously a customer, a competitor for margin, a representative of the brand, and a potential plaintiff when the relationship ends. This guide covers the structural choice between distributor, agent, and hybrid arrangements; appointment and exclusivity; the pricing and incentive architecture that drives channel behavior; ordering and supply mechanics; IP and end-user terms that must flow down; the antitrust constraints on channel restrictions; the dealer protection and franchise statutes that can convert a routine termination into a violation; and termination and transition.

An industrial equipment manufacturer appoints a distributor for four states. The agreement is two pages and says the distributor is "the exclusive distributor for the territory," may purchase at a 30 percent discount, and that either party may terminate on 60 days' notice.

Seven years later the manufacturer wants to sell directly to three national accounts headquartered in the territory. It gives notice.

The distributor's response contains four claims the manufacturer had never considered.

Exclusivity. "Exclusive distributor for the territory" is ambiguous about whether the manufacturer itself may sell there. Courts construe such clauses against the drafter, and the distributor argues that exclusive means exclusive of the supplier too.

A dealer protection statute. Two of the four states have statutes requiring good cause and a notice and cure period before terminating an equipment dealer, regardless of the contract's termination clause, and providing for repurchase of inventory at cost plus freight.

A franchise claim. In one state, the combination of a trademark license, a prescribed method of operation, and a required payment may make the relationship a franchise under a broadly drafted state statute — with registration, disclosure, and termination protections the manufacturer never complied with.

The customers. The distributor holds the customer relationships, the service contracts, and the installed base data. Nothing in the agreement addresses who owns any of it.

None of this is exotic. It is the ordinary consequence of a two-page agreement in a relationship that lasted seven years.

Structure: distributor, reseller, or agent

The threshold choice determines liability, tax, antitrust treatment, and who owns the customer.

Distributor. Buys product from the supplier for its own account and resells at a price it sets. Takes title, bears inventory risk and credit risk on its customers, and earns a margin rather than a commission. The supplier has no contractual relationship with the end customer.

Reseller and value-added reseller (VAR). A distributor that also adds services, integration, configuration, or its own components. The additional questions are who owns the combined offering, whose warranty applies, and who is liable when the integrated system fails.

Agent or sales representative. Solicits orders on the supplier's behalf; the supplier contracts directly with the customer and pays a commission. The agent takes no title and no credit risk.

The consequences of the choice:

  • Pricing. A supplier may set the price to its agent's customers, because the supplier is the seller. A supplier that dictates the resale price of an independent distributor is engaged in resale price maintenance — lawful under federal law after Leegin on a rule of reason analysis, but per se unlawful in several states.
  • Liability. An agent's acts within the scope of authority bind the supplier. A distributor's do not, unless apparent authority is created. Suppliers using distributors should avoid conduct suggesting the distributor speaks for them.
  • Tax. An agent concluding contracts on a foreign supplier's behalf can create a permanent establishment and a tax filing obligation in that jurisdiction. A buy-sell distributor generally does not.
  • Sales tax. A distributor buying for resale provides a resale certificate; an agent arrangement leaves the supplier as the seller with its own nexus and collection obligations.
  • Statutory protection. Sales representative statutes in most states protect commissioned representatives, requiring a written agreement and imposing penalties — frequently double or treble damages plus fees — for unpaid commissions after termination. Dealer protection statutes protect distributors. The two regimes are different, and the classification determines which applies.
  • Customer ownership. In an agency model the customer is the supplier's. In a distribution model the customer is the distributor's, unless the agreement says otherwise.

Hybrid arrangements — a distributor that also acts as an agent for large accounts, or a referral fee overlay — are common and should be documented as two distinct relationships with distinct terms, rather than as an undifferentiated "partner agreement."

Appointment, territory, and exclusivity

Define the appointment precisely:

  • Products — by SKU, product family, or category, with a mechanism for adding and removing products.
  • Territory — by geography, defined with specificity. "The Southeast" is not a definition.
  • Field of use or customer segment, where relevant.
  • Channel — brick and mortar, online, direct sales, marketplaces.

The exclusivity question has three answers, and the agreement must say which:

  1. Non-exclusive. The supplier may appoint others and sell directly.
  2. Exclusive as to other distributors, but the supplier reserves the right to sell directly. This is the most common commercial arrangement and the least commonly drafted clearly.
  3. Fully exclusive. The supplier will neither appoint others nor sell directly in the territory or field.

Whichever is chosen, address the corollaries expressly:

  • House accounts — customers the supplier reserves to itself, listed on a schedule and updated by a defined process. Whether the distributor receives a reduced commission or fee on house account sales in its territory.
  • National and global accounts, and how a customer with locations inside and outside the territory is handled.
  • Online sales by the supplier or by other distributors that reach into the territory. Territorial exclusivity is meaningless if any distributor can sell online to anyone.
  • Passive sales — an unsolicited order from outside the territory. Restricting active solicitation is easier to justify than restricting passive sales, and in some jurisdictions the distinction is legally significant.
  • Government and OEM channels, which frequently warrant separate treatment.

Exclusivity should be earned and losable. Tie it to minimum purchase or performance requirements, with a defined consequence for missing them — conversion to non-exclusive, loss of a portion of the territory, or termination — measured over a period long enough to be fair and short enough to matter. Specify whether the minimums are firm commitments (a breach if missed) or performance conditions (with the consequence being loss of exclusivity rather than damages), because the two are very different obligations.

Pricing, discounts, and channel incentives

The pricing architecture drives channel behavior more than any other provision.

The discount schedule. Tiered by volume, by product category, or by partner level (authorized, silver, gold), published as an exhibit and amendable on notice. Address whether pricing is fixed for a period, indexed, or subject to change on notice — and whether orders in the pipeline are protected against an increase.

Price protection. A credit to the distributor if the supplier reduces prices while the distributor holds inventory purchased at the higher price. Define the window, the eligible inventory, and the claim procedure.

Stock rotation and returns. A right to return a defined percentage of inventory per period for credit against a new order. Standard in technology distribution and worth defining precisely.

Rebates and incentives. Volume rebates, growth rebates, and mix incentives. Define the measurement period, the calculation, the payment timing, and what happens on termination mid-period. Confirm the structure does not create Robinson-Patman exposure by giving materially different net prices to competing purchasers without a defense.

Market development funds (MDF) and co-op advertising. Define the accrual (a percentage of purchases), the approval process for spending, the documentation required for reimbursement, and whether unused funds expire. Confirm that promotional allowances are made available to competing customers on proportionally equal terms, as Robinson-Patman §§ 2(d) and 2(e) require.

Deal registration. The mechanism that prevents channel conflict: a partner that identifies an opportunity registers it, receives a defined period of protection and an enhanced discount, and other partners and the direct sales force are excluded. Specify the registration criteria, the approval process, the protection period, renewal, and the tie-breaking rule for competing registrations. Poorly run deal registration destroys channel trust faster than anything else.

Resale pricing. Say clearly that the distributor is free to determine its own resale prices. If the supplier wants a minimum advertised price policy, adopt it as a unilateral policy outside the agreement rather than as a contractual term, and understand the state law variation on resale price maintenance.

Payment terms, credit limits, security (a personal guaranty, a letter of credit, or a UCC-1 on inventory and receivables), interest on late payment, and the supplier's right to suspend shipment or place the distributor on credit hold.

Ordering, supply, and product terms

Forecasting. Rolling forecasts with a defined horizon, distinguishing the binding window (typically the nearest 30 to 60 days, which the distributor is committed to purchase) from the non-binding planning horizon. Address the consequences of a forecast miss in both directions.

Purchase orders. State that orders are subject to the agreement and that any conflicting terms on a purchase order or acknowledgment are rejected — which addresses the battle of the forms under UCC § 2-207 and is the reason a master agreement exists.

Acceptance and allocation. Whether the supplier must accept conforming orders, and how it will allocate product in a shortage. An allocation provision — pro rata based on historical purchases — prevents the most common and most damaging supply dispute.

Delivery. Incoterms or defined shipping terms, lead times, partial shipments, and the consequence of late delivery.

Title and risk of loss, stated clearly. Under UCC § 2-509, absent agreement, risk passes on delivery to the carrier in a shipment contract, and the difference between FOB origin and FOB destination is money.

Inspection and rejection rights and periods, and the process for nonconforming goods.

Product changes and discontinuance. Notice periods for specification changes, end-of-life announcements, and last-time-buy rights — with a defined support and spare parts commitment after discontinuance.

Warranty. Two distinct questions:

  1. The supplier's warranty to the distributor — scope, duration, remedy (repair, replace, or credit), and the disclaimer of implied warranties, which must be conspicuous and mention merchantability under UCC § 2-316.
  2. The warranty passed through to end users — its terms, who administers claims, who bears the cost, and the process for reimbursement of the distributor's warranty service.

Limitation of liability, mutual, with the standard carve-outs for indemnity obligations, confidentiality breach, and gross negligence and willful misconduct — and with the consequential damages exclusion drafted to survive any failure of the limited remedy's essential purpose.

Product liability and indemnity. The supplier indemnifies for defects in the product as manufactured; the distributor indemnifies for its own acts — modifications, representations beyond the supplier's documentation, improper storage or handling, and its own services. Both should carry insurance naming the other as an additional insured by endorsement, with primary and non-contributory language and a waiver of subrogation. Note that a distributor is generally strictly liable to an injured consumer as a seller in the stream of commerce, subject to innocent seller statutes in some states, which is why the indemnity and the insurance matter more than the allocation of fault.

Recalls. Who decides, who executes, who pays, and the distributor's obligation to maintain traceability records sufficient to identify affected units and customers. Without traceability, a recall becomes a total field action.

Compliance. Product regulatory approvals, labeling, country-specific requirements, and the allocation of responsibility for obtaining and maintaining them.

Intellectual property and flow-down terms

Trademark license. The distributor needs a license to use the supplier's marks in marketing and resale. Grant it expressly, and include:

  • Scope — permitted uses, territory, and duration coterminous with the agreement.
  • Quality control — the supplier's right to approve materials and to inspect. A trademark license without genuine quality control is a naked license risking abandonment of the mark.
  • Brand guidelines incorporated by reference.
  • Domain names and social handles — a prohibition on registering marks or confusingly similar domains, and an obligation to transfer any registered.
  • Ownership acknowledgment and a covenant not to challenge.
  • Immediate cessation on termination, with a defined sell-off period for existing materials.

Software and end-user terms. Where the product includes software, the distributor must flow down the supplier's end user license agreement to every customer, and the agreement should:

  • Require the EULA to be presented and accepted before or at delivery.
  • Prohibit the distributor from modifying the EULA or making representations inconsistent with it.
  • Make the supplier a third-party beneficiary of the distributor's customer agreements as to the EULA terms — which is what allows the supplier to enforce against a customer it never contracted with.
  • Address open source obligations and the passing of required notices.
  • Address the treatment of the distributor's own value-added components and who owns the combined work.

Other flow-downs that should be mandatory: export control and sanctions obligations, including a prohibition on resale to restricted parties and destinations and an obligation to screen; anti-corruption compliance; data protection terms where personal data is involved; and any regulatory or safety notices required with the product.

Feedback and improvements. Who owns suggestions the distributor or its customers make. The supplier will want ownership; the distributor should confirm the clause does not sweep in its own confidential information or its customers' data.

Customer data. The most valuable and most often unaddressed asset. Specify who owns end-customer identity and purchase data, what the supplier may do with it, whether the distributor must provide it, and what happens on termination. In an agency model the answer is obvious. In a distribution model it is genuinely contested, and it determines whether the supplier can continue to serve those customers after the relationship ends.

Audit rights over the distributor's records relating to purchases, resales, rebate claims, MDF spending, and — where royalties or reporting obligations exist — the underlying data, with notice, frequency limits, confidentiality, and cost-shifting if a material discrepancy is found.

Antitrust and channel restrictions

Vertical restrictions in distribution are judged under the rule of reason and are generally lawful for a supplier without market power. The recurring issues:

Resale price maintenance. Setting or agreeing on the distributor's resale price is analyzed under the rule of reason federally after Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007), but remains per se unlawful under several states' laws. The safer approach: state the distributor's pricing freedom in the agreement, and address price positioning through a unilateral minimum advertised price policy administered outside the contract, without seeking or accepting agreement.

Territorial and customer restrictions are lawful under the rule of reason following Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977). Assign them unilaterally and bilaterally; never convene distributors to allocate territories among themselves, which is horizontal market allocation and per se unlawful.

Exclusive dealing — requiring the distributor to carry no competing products — is analyzed under the rule of reason and Clayton Act § 3. The relevant factors are the share of the market foreclosed and the duration. Short terms with termination rights and modest market shares are comfortable.

Tying — conditioning the supply of a desired product on taking another — requires market power in the tying product and should be avoided in a channel program.

Robinson-Patman. Different net prices to competing distributors require a defense: cost justification, meeting competition in good faith and documented at the time, or a functional discount reflecting genuinely different functions. Promotional allowances and services must be available to competing customers on proportionally equal terms.

Termination following complaints. The most dangerous fact pattern. A distributor complains that another is discounting; the supplier terminates the discounter. Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984), holds that termination following complaints does not by itself prove an unlawful agreement, but the evidentiary record is unforgiving. Do not document the complaint, do not respond to it, and make termination decisions on independently documented grounds under a uniform policy.

Information exchange. Distributor councils and advisory boards are useful and are also rooms full of competitors. Circulate an agenda, have counsel present, keep minutes, and prohibit discussion of pricing, margins, customers, and territories.

Dealer protection and franchise statutes

This is the area suppliers most often overlook, and it can override the agreement entirely.

Dealer protection statutes exist in most states, typically covering defined industries — farm and construction equipment, industrial and outdoor power equipment, motor vehicles, marine, powersports, heavy trucks, alcoholic beverages, and petroleum marketing among them. Common features:

  • Good cause required for termination, non-renewal, or a substantial change in the competitive circumstances of the agreement, with good cause usually defined to require a material breach and an opportunity to cure.
  • Notice periods — frequently 60 to 180 days — that override a shorter contractual period.
  • Cure rights, often 30 to 90 days.
  • Mandatory repurchase of inventory, parts, special tools, and sometimes signage and equipment, at defined prices — commonly net cost plus freight.
  • Restrictions on establishing a competing dealer within a defined radius.
  • Anti-waiver provisions voiding contractual waivers, and choice of law provisions that void a contractual choice of another state's law.
  • Remedies including damages, injunctive relief, and attorney's fees.

The Petroleum Marketing Practices Act, 15 U.S.C. §§ 2801-2841, and the federal Automobile Dealers' Day in Court Act, 15 U.S.C. §§ 1221-1225, add federal layers in those industries.

Franchise statutes are the broader trap, because the definition frequently captures relationships nobody intended as a franchise. The FTC Franchise Rule, 16 C.F.R. part 436, defines a franchise by three elements: a trademark license; significant control of or assistance to the franchisee's method of operation; and a required payment to the franchisor of $500 or more within the first six months.

Many state statutes use a broader test. Several substitute a "community of interest" element for the control element, and Wisconsin's Fair Dealership Law and New Jersey's Franchise Practices Act have been applied to relationships that look like ordinary distribution. Others use a "marketing plan" test.

Why this matters. If a distribution relationship is a franchise:

  • Pre-sale disclosure of a Franchise Disclosure Document is required, with registration in the registration states.
  • Termination and non-renewal are restricted by statute regardless of the contract.
  • Remedies include rescission, damages, and fees.
  • Non-compliance is not curable retroactively.

How to stay out of it. Avoid the required payment where possible — initial fees, mandatory training fees, and required purchases of non-inventory items are the usual triggers. Limit prescriptive control over the distributor's method of operation; brand and quality standards are one thing, mandated business systems, hours, and territory operations are another. And run the analysis under the law of every state where a distributor is located, before appointing them.

Termination and transition

Term. A defined initial term with renewal — automatic unless notice is given, or affirmative renewal. Automatic renewal with a short non-renewal window is a trap for whichever party forgets, and some states restrict it.

Termination rights:

  • For convenience, on notice. Specify the period, and confirm it satisfies any applicable dealer statute.
  • For cause, with notice and a cure period — and a list of non-curable breaches (insolvency, loss of a required license, a change of control to a competitor, a compliance violation) that permit immediate termination.
  • For failure to meet minimums, with the consequence specified.
  • On a change of control of the distributor.
  • On insolvency, subject to the Bankruptcy Code's limits on ipso facto clauses.

Post-termination provisions — the ones that matter most and are drafted least:

  • Inventory. Whether the supplier will, may, or must repurchase; at what price; who pays freight; and how obsolete or damaged goods are treated. A statute may compel repurchase regardless.
  • Open orders. Which are honored and which are cancelled.
  • Sell-off period. A defined window in which the distributor may sell remaining inventory, with the trademark license surviving for that limited purpose.
  • Customers. Whether the distributor may solicit them afterward, whether it must transfer contact and installed-base data, and whether the supplier will honor existing customer contracts. This is the provision the parties will actually fight about.
  • Warranty and service obligations to existing end customers, and who performs and pays.
  • Spare parts availability for the installed base.
  • Trademark and IP — immediate cessation of use, return or destruction of materials, transfer of any domains or social accounts, and removal of signage.
  • Confidential information returned or destroyed.
  • Accounts receivable and final reconciliation of rebates, MDF, and price protection claims.
  • Employees — whether the supplier may hire the distributor's sales personnel, and any non-solicit tail.
  • Survival of confidentiality, indemnity, limitation of liability, and dispute resolution.

Transition planning. Where the supplier will appoint a successor or go direct, the practical questions are customer communication, service continuity, and inventory. A transition services arrangement — the outgoing distributor continues servicing the installed base for a defined period at defined rates — protects the customers, who are the asset both parties actually care about.

Damages exposure on termination. Beyond statutory claims, distributors assert breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel and reliance on assurances of long-term commitment, unjust enrichment for market development at the distributor's expense, and — in some states — a claim for the goodwill it built. The best defense is a clearly drafted termination right, exercised consistently with the contract and any applicable statute, on documented grounds, without a pattern of assurances contradicting it.

A worked example

Ardenne Instruments builds a channel program after the experience described at the outset.

Structure. Buy-sell distribution, with a separate agency appendix for national accounts where Ardenne contracts directly and pays the partner a fee.

Appointment. Products by family with an add/remove mechanism. Territory by county list. Exclusive as to other distributors, with Ardenne expressly reserving the right to sell directly to a scheduled list of national accounts and to any customer through the agency appendix.

Performance. Annual minimum purchase targets, measured quarterly on a trailing twelve-month basis. Missing the target for two consecutive quarters converts the appointment to non-exclusive; missing for four permits termination. Targets are performance conditions, not purchase commitments.

Pricing. A published tier schedule; pricing fixed for twelve months with 90 days' notice of change and pipeline protection for registered deals. Price protection on inventory for 60 days after a decrease. Quarterly stock rotation up to 5 percent of trailing purchases. Express statement that the distributor sets its own resale prices, with a separate unilateral MAP policy issued outside the agreement.

Deal registration. Registration through a portal, protection for 90 days renewable once, an enhanced discount, and a published tie-breaking rule. Ardenne's direct sales force is compensated neutrally on registered deals to remove the incentive for conflict.

Supply. Rolling six-month forecast with the nearest 45 days binding. Pro rata allocation in shortage based on trailing twelve-month purchases. FOB origin with defined lead times. End-of-life notice of 180 days with a last-time-buy right and a five-year parts commitment.

IP. Trademark license with quality control and brand guidelines. Mandatory EULA flow-down with Ardenne as a third-party beneficiary. Export control and anti-corruption flow-downs. Customer data owned by Ardenne with the distributor obligated to report installed-base data monthly — negotiated hard, and the reason Ardenne can service the base after any transition.

Compliance. Counsel runs a state-by-state dealer statute and franchise analysis before appointing in each state. In two states the relationship falls within a dealer statute; the agreement's notice and cure provisions are drafted to the statutory minimums for all states so a single form works. No initial fee and no required non-inventory purchases, to stay outside the franchise definitions.

Termination. For convenience on 180 days' notice; for cause with 60 days to cure; immediate for insolvency, license loss, change of control to a competitor, or compliance violation. Post-termination: mandatory repurchase of current inventory at net cost plus freight, a 90-day sell-off period, transfer of installed-base data, a six-month transition services arrangement at agreed rates, and survival of the customary provisions.

Result. When Ardenne later terminates a non-performing distributor, the process is a notice, a cure period, a repurchase, and a transition — not a lawsuit.

Frequently asked questions

Can we tell our distributors what to charge? You can announce a unilateral MAP policy restricting advertised price and refuse to deal with those who do not follow it. Agreeing on resale price is rule-of-reason under federal law and per se unlawful in several states.

Can we sell directly in an exclusive territory? Only if the agreement says so. "Exclusive" is ambiguous and is construed against the drafter. Say expressly whether the supplier is included in the exclusivity.

Can we terminate on 30 days' notice as our contract says? Not necessarily. Dealer protection statutes in many states override contractual notice periods and require good cause and a cure opportunity, and their anti-waiver provisions defeat a contrary choice of law.

Are we creating a franchise? Check the trademark license, the degree of control over the distributor's operations, and whether any required payment exceeds the threshold — under the FTC Rule and under each relevant state's broader test.

Who owns the customers? Whoever the agreement says. Absent a provision, a distributor that contracted with the customer generally does, which is why the data reporting obligation is worth negotiating.

Must we take back inventory on termination? Under the contract, only if it says so. Under a dealer statute, frequently yes, at a defined price.

A distributor complained that another is discounting. What do we do? Nothing in writing, and nothing in response to the complaint. Enforce a uniform policy on independently documented grounds.

Should the distributor be an additional insured? Yes, by endorsement rather than certificate, with primary and non-contributory language and a waiver of subrogation — in both directions.

Conclusion

A channel agreement is doing four jobs at once: it is a supply contract, a license, a compliance instrument, and a termination provision that will be read years later by someone whose commercial expectations diverged from the document.

Three provisions carry disproportionate weight. Exclusivity, stated with enough precision that everyone knows whether the supplier may sell directly. Termination, drafted against the dealer protection and franchise statutes of every state where a partner sits, not just the contract. And the post-termination package — inventory, customers, data, and service — which decides what the supplier actually keeps when the relationship ends.

Everything else is commercial terms that both parties will renegotiate anyway. Those three are the reason the agreement exists.

International distribution

Appointing a distributor outside the United States adds a layer of mandatory local law that the agreement cannot contract around.

Termination indemnity. The single largest difference. Many civil law jurisdictions grant a distributor or commercial agent a statutory indemnity or compensation on termination, calculated by reference to the goodwill the distributor built and often measured in years of average commission or gross margin. The EU Commercial Agents Directive (86/653/EEC) applies to agents and provides for indemnity or compensation that cannot be waived in advance; several member states, and a number of Latin American and Middle Eastern jurisdictions, extend comparable protection to distributors by statute or case law. In some markets the protection is a matter of public policy that survives a choice of foreign law and a foreign arbitration clause.

The practical consequence is that in certain countries appointing an exclusive distributor is close to irreversible without a payment, which should be modeled as a cost of entry rather than discovered at termination. Structuring alternatives include a shorter fixed term with no renewal expectation, a non-exclusive appointment, a local subsidiary selling directly, or a commission agency structure priced with the indemnity in view.

Competition law. The EU's Vertical Block Exemption Regulation and its guidelines permit many vertical restraints below defined market share thresholds but treat hardcore restrictions — resale price maintenance and, subject to defined exceptions, restrictions on the territory into which or the customers to whom a buyer may sell — as removing the exemption. The distinction between restricting active and passive sales is legally operative in the EU in a way it is not in the United States, and online sales restrictions are specifically addressed.

Other mandatory rules to check before signing: registration requirements for distribution or agency agreements in some jurisdictions; local content, labeling, and language requirements; product liability regimes that may impose liability on the importer regardless of the contract; and consumer protection rules that flow through to the supplier.

Contract mechanics for cross-border channels: choose arbitration over litigation, because the New York Convention makes awards enforceable where judgments may not be; select a neutral seat; specify the language; address currency, payment mechanics, and exchange controls; allocate customs duties, import licensing, and responsibility for regulatory registrations; and use Incoterms with the edition named.

Compliance flow-downs matter more, not less, abroad: anti-corruption representations and audit rights where the distributor deals with government customers; export control and sanctions screening obligations with a prohibition on diversion; and a right to terminate immediately for a compliance violation. A foreign distributor is the most common vector for FCPA exposure, and the diligence performed before appointment is what the government will ask about.

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This guide is provided for general informational purposes and does not constitute legal advice. Dealer protection and franchise statutes vary substantially by state and industry and frequently override contract terms. Consult qualified counsel before appointing or terminating a channel partner.