When Your Florida Beer Distributor Stops Paying: A Supplier’s Options

Getting your beer into distribution is supposed to solve a problem: the distributor takes responsibility for getting your products into retailers and collecting payment down the chain.

But what happens when the distributor stops paying you?

For a Florida brewery or other beer supplier, the obvious answer might seem to be: stop doing business with the distributor and find someone else. Florida’s beer franchise law makes that considerably more complicated.

There is a legal process for terminating a distributor for failure to pay. But the existence of a legal remedy does not necessarily make termination the best business solution. Suppliers facing a delinquent distributor should usually focus first on stopping the problem from getting worse, protecting their leverage, and finding the most practical path to getting paid.

First Priority: Stop the Receivable From Growing

When a distributor falls behind, one of the biggest mistakes a supplier can make is continuing to ship more beer on the same credit terms while hoping the distributor eventually catches up.

A $10,000 collection problem can become a $20,000 collection problem remarkably quickly if the supplier continues making shipments.

Florida law generally recognizes a manufacturer’s ability to place prudent and reasonable restrictions on the extension of credit. Section 563.022 specifically provides that a manufacturer’s failure to deliver beer is not a violation of the statute when the failure results from a “prudent and reasonable restriction on extension of credit” to the distributor.

That makes credit control one of the supplier’s most useful immediate tools.

Depending on the circumstances, practical options might include:

• Suspending additional shipments until past-due invoices are paid.
• Requiring payment of some or all past-due amounts before releasing additional inventory.
• Changing future purchases to COD or other acceptable payment terms.
• Establishing a written payment plan for the existing balance.
• Closely monitoring the distributor’s performance under any payment plan.

The objective is not necessarily to punish the distributor. It is to prevent the supplier’s exposure from continuing to increase while the parties work toward a solution.

Give the Distributor a Reason to Prioritize Your Account

A financially distressed distributor probably has more than one unpaid creditor. If so, repeatedly sending copies of overdue invoices may document the debt, but it does not necessarily give the distributor a reason to pay your company rather than another creditor.

The supplier should therefore look for practical leverage.

One source of leverage is future product. If the distributor wants additional shipments of products that retailers are requesting, restricting further credit can create a meaningful incentive to address the past-due balance.

Another source can arise if the distributor is contemplating a sale or transfer of its distribution business. Florida’s beer franchise law generally restricts a distributor’s ability to transfer the franchise without the manufacturer’s written consent and provides rules governing when that consent may be withheld.

If a proposed transfer requires the supplier’s consent, the supplier should consider the unpaid receivable before giving that consent. Do not simply assume that the old distributor’s debt will automatically be paid by the buyer as part of the transaction.

The exact opportunities will depend upon the facts and the distribution agreement. The larger point is that collection leverage is usually most valuable before the supplier gives up something the distributor needs.

Florida Law Provides a Remedy for Nonpayment

If the distributor continues not to pay, Florida’s Beer Franchise Law provides a specific termination procedure.

Florida Statutes Section 563.022(10) applies when a distributor fails to pay for products that were ordered and delivered according to the terms established with the manufacturer. The statute permits termination for good cause when the distributor continues to fail to pay within 15 business days after receiving notice of the delinquency and a demand for immediate payment.

That means the supplier should not treat an ordinary collection email as necessarily satisfying the statute. If the supplier wants to preserve the statutory termination remedy, the notice should be intentionally prepared for that purpose.

If the delinquency remains uncured after the 15-business-day period, the supplier can move to the termination stage. Section 563.022(10) allows termination for these specified grounds after not less than 15 days’ written notice, provided in the manner and containing the information required by subsection (9). Subsection (9) requires certified mail and requires the termination notice to state the intention to terminate, the reason, and the effective date.

So, in simplified form, the nonpayment process involves:

1. A delinquency notice and demand for immediate payment.
2. A 15-business-day opportunity to pay.
3. If the delinquency continues, a formal termination notice giving at least 15 days’ written notice.
4. Termination if the matter is not otherwise resolved or judicially interrupted.

But that is where the simplicity ends.

Termination Is a Remedy, Not Necessarily a Solution

The ability to terminate a nonpaying distributor sounds powerful. But a supplier needs to ask an important question before starting down that road: What happens after termination?

Florida’s beer franchise law strongly protects distribution relationships. A distributor faced with losing valuable brand rights may dispute the supplier’s grounds, challenge whether the notices were sufficient, or contend that the amount supposedly due is itself disputed.

Importantly, the statute places the burden on the manufacturer to establish good faith, compliance with the notice requirements, and good cause for termination. It also expressly permits either party, during the applicable termination-notice period, to ask a Florida circuit court to shorten or extend that period pending a final decision. Courts can grant temporary, preliminary and final injunctive relief, and the statute provides additional remedies that can include damages, costs, and attorney’s fees.

In other words, a termination notice can become the beginning of litigation rather than the end of the problem. That can be an expensive way to collect an unpaid account.

And Who Will Distribute the Beer Next?

There is another practical problem: Successfully terminating Distributor A does not mean that Distributor B is waiting to take over.

A replacement distributor will evaluate the brands as a business opportunity. If sales volumes are modest, retailers are concentrated in a difficult service area, the existing distributor has not adequately developed the brands, or the supplier-distributor dispute creates uncertainty about the transition, another distributor may not be eager to assume the territory.

A supplier can therefore win the legal battle and still create a significant distribution problem.

Before treating termination as the preferred outcome, a supplier should think through:

• Is there a realistic replacement distributor?
• Is that distributor interested in the brand?
• How will existing inventory be handled?
• How will retailers continue receiving product during the transition?
• What disruption will the change cause to existing accounts?
• Is the amount owed large enough to justify the cost and risk of a disputed termination?

Florida law also contains inventory-repurchase requirements following certain franchise terminations. Those provisions should be considered as part of the exit analysis rather than assuming that termination simply ends all dealings between the parties.

Sometimes the Formal Notice Is Valuable Even If You Don’t Want to Terminate

The statutory delinquency notice should not necessarily be viewed as a declaration of war.

A supplier may have good reasons to send the required notice even when its preferred outcome is to preserve the distribution relationship.

A proper notice does several useful things. It clearly identifies the delinquency, makes the demand for payment unmistakable, establishes a defined period for the distributor to address the default, and preserves the supplier’s ability to move toward termination if the problem continues.

Most importantly, it can change the conversation. Instead of another request asking when invoices will be paid, the distributor now understands that continued nonpayment can have consequences for its right to distribute the brands.

That leverage can be used to pursue the preferable result: getting the supplier paid without having to litigate or replace the distributor.

A Practical Strategy for a Delinquent Distributor

For many suppliers, the better approach is escalation rather than immediately jumping to termination.

Start with the numbers. Prepare an accurate aging showing every outstanding invoice, payment, credit and disputed item. Identify precisely how much is past due and under what payment terms.

Then stop making the situation worse. Consider whether additional credit shipments should be suspended or whether future orders should be subject to different payment arrangements.

Communicate directly with the distributor’s decision-makers. Determine whether the delinquency is a temporary cash-flow problem, an accounting dispute, or evidence of broader financial distress.

If appropriate, negotiate a written repayment arrangement. But a payment plan is only valuable if compliance is monitored. A series of promises followed by missed payments should not become a substitute for dealing with the underlying problem.

At the same time, consider sending the statutory delinquency notice so that the supplier does not give up valuable leverage while negotiations continue.

Finally, investigate the alternatives before terminating. Understand the market for the brands, the likelihood of finding another distributor, the existing inventory, and whether a pending transaction or transfer involving the distributor presents another opportunity for resolving the unpaid balance.

The Goal Is Payment, Not Termination

When a Florida beer distributor stops paying, the Beer Franchise Law gives the supplier an important remedy. A distributor that continues to fail to pay after the required notice and demand can ultimately put its franchise rights at risk.

But exercising that remedy can lead to a disputed termination, litigation and the difficult question of who will distribute the supplier’s beer next.

That is why termination usually should not be the objective.

The better objective is to stop the receivable from growing, preserve the supplier’s legal rights, identify available leverage, and use that leverage to get paid.

If that works, the supplier may be able to preserve a viable distribution relationship. If it does not, the supplier will be in a much better position to decide whether termination is worth pursuing.

Because we’re attorneys: Disclaimer. Originally posted 10/18/2026.