The Franchise Memorandum

In another Ohio case brought under the same statute as referenced immediately above, the court granted summary judgment on the plaintiff beer distributors’ claims that they were terminated improperly by a successor manufacturer. The Bellas Company v. Pabst Brewing Co., 2011 U.S. Dist. LEXIS 24781 (S.D. Ohio Mar. 11, 2011). After a new entity acquired all of the stock of Pabst Brewing Co. under a Stock Purchase Agreement, the new entity terminated the plaintiff distributors without providing sixty days notice prior to termination as required under the existing distribution agreements. The new entity relied on Section 1333.85(D) of the Ohio Alcoholic Beverages Franchise Act, which permits successor entities to terminate distribution agreements within 90 days of the merger or acquisition. The court held that the written distribution agreements with the plaintiff distributors were binding on the successor entity and that the ABFA neither conflicted with nor superseded contractual terms regarding notice of termination, thus the defendant successor entity breached the distribution agreements as a matter of law when it failed to give the contractual notice.