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<section article="gab" article_name="Alcoholic Beverages and Cannabis" number="5-109" title_number="5" title_name="General Beer Regulation" subtitle_number="1" subtitle_name="Beer Franchise Fair Dealing Act">
  <level label="a">
    <text>This section applies only to a franchisor that annually produces 20,000 or fewer barrels of beer in aggregate, in conjunction with any affiliate.</text>
  </level>
  <level label="b">
    <level label="1">
      <text>Subject to § 5–107 of this subtitle, and except as provided in subsection (d) of this section, before termination of or refusal to renew a beer franchise agreement, a franchisor shall enter into a termination agreement with the terminated franchisee.</text>
    </level>
    <level label="2">
      <text>The termination agreement shall:</text>
      <level label="i">
        <text>compensate the terminated franchisee for the fair market value of the terminated franchise; and</text>
      </level>
      <level label="ii">
        <text>provide for the repurchase of all the franchisor’s beer at an amount equal to the laid–in cost of the franchisee’s inventory of the franchisor’s products that are in the warehouse or in transit to the franchisee.</text>
      </level>
    </level>
  </level>
  <level label="c">
    <level label="1">
      <text>If an agreement on the compensation authorized under subsection (b)(2)(i) of this section is not reached within 45 days after the franchisor provides the notice required by § 5–107(b)(1)(i) of this subtitle, the matter shall be submitted to binding arbitration for the purpose of determining the compensation.</text>
    </level>
    <level label="2">
      <text>The binding arbitration shall:</text>
      <level label="i">
        <text>be administered under the rules of the commercial arbitration rules of the American Arbitration Association;</text>
      </level>
      <level label="ii">
        <text>take place in the State;</text>
      </level>
      <level label="iii">
        <text>be heard by one arbitrator who shall be appointed in accordance with the commercial arbitration rules; and</text>
      </level>
      <level label="iv">
        <text>be limited to 45 days, unless otherwise agreed to by the parties.</text>
      </level>
    </level>
    <level label="3">
      <text>During the period of arbitration, the beer franchise agreement shall remain in effect and may terminate only on the decision of the arbitrator.</text>
    </level>
    <level label="4">
      <text>The arbitrator shall be governed by the laws of the State, the Maryland Rules, and the commercial arbitration rules.</text>
    </level>
    <level label="5">
      <text>In determining the fair market value of the terminated franchise, the arbitrator:</text>
      <level label="i">
        <text>may consider only the period before the franchisor provided the notice required by § 5–107(b)(1)(i) of this subtitle; and</text>
      </level>
      <level label="ii">
        <text>may not consider any period following the providing of that notice.</text>
      </level>
    </level>
    <level label="6">
      <text>The ruling of the arbitrator shall be final and subject to enforcement in the courts of the State.</text>
    </level>
    <level label="7">
      <text>The cost of the arbitration shall be shared equally by the parties.</text>
    </level>
  </level>
  <level label="d">
    <text>By written mutual agreement, the franchisor and the franchisee may determine another method of terminating the franchise agreement and providing compensation to the terminated franchisee.</text>
  </level>
  <level label="e">
    <text>Until resolution regarding fair market value is reached under subsection (b) or (c) of this section and the terminated franchisee has received payment in accordance with the determination of fair market value:</text>
    <level label="1">
      <text>the franchisor and the terminated franchisee shall support the franchisor’s products to at least the same extent that the products had been previously supported immediately before the franchisor provided the notice required by § 5–107(b)(1)(i) of this subtitle; and</text>
    </level>
    <level label="2">
      <text>the terminated franchisee shall continue to distribute the products.</text>
    </level>
  </level>
</section>
