Monster Energy Distribution Agreement

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Monster Energy Distribution Agreement

A Monster Energy Distribution agreement is a legal contract between the owner of the energy drink Hansen Natural and its distributors. This is a bipartite agreement. This agreement is prepared whenever an agreement is entered into with a distributor for the distribution of its energy drink, Monster Energy.

The distributor is in charge of marketing, sales, and support of Monster Energy drinks. The territory where the product will be distributed is specified and the distributor is set targets for the area chosen. There are certain ethical standards which the distributor needs to adhere to, failing which the distribution rights will be terminated. The distributor has to follow up with the stores to find out the demand for the products and ensure that regular supply is maintained.

When Do You Need Monster Energy Distribution Agreement

A monster energy distribution agreement is required when Monster Beverage Corporation wants to appoint a distributor for its products. The purpose of a monster energy distribution agreement is to specify the responsibilities of the distributor with regard to the marketing of the product. The agreement ensures that the distributor achieves the given sales targets or be penalized for non-performance.

Monster Beverage Company, the company that owns the Monster Energy drink, has an annual sales and profit target. In order to achieve these targets, the company needs to appoint distributors in different areas and set them a specific target and offer some incentives to them.

Inclusions in Monster Energy Distribution Agreement

A monster energy distribution agreement should include the names of Monster Beverage Corporation and the distributor, as it is a bipartite agreement and these are the parties to the agreement.

This agreement must include the effective date of the agreement, the laws of the state governing the agreement, the rights and responsibilities of the company and the distributor, the area being allotted to the distributor, the revenue targets set for the distributor, and the events which lead to the termination of the contract. The company invites quotations from the distributor and has qualifying criteria for selection. Once the distributor meets the criteria, then a distribution agreement is drawn. The rate to be paid to the distributor for each unit sold is also part of the agreement.

Benefits of Monster Energy Distribution Agreement

The benefits of having the agreement are:

  • The rights of Monster Beverage Corporation, which owns the brand Monster Energy, as well as the distributor, are protected. If the distributor is able to achieve the target, then the commission due to the distributor has to be paid by the company. Again, in the case of non-performance of the distributor, the company has the right to penalize the distributor.
  • In the event there is a breach of contract by either party, then as per the laws of the state, the contract will be null and void.
  • There will be no dispute between the company and the distributor as the distribution commission and the performance parameters for the distributor have been decided beforehand.

How to Draft Monster Energy Distribution Agreement

While drafting this agreement, you need to keep the following in mind:

  • The names of the parties to the agreement and their relationship need to be defined
  • The agreement should be in compliance with the laws of the state
  • The scope of the agreement including the appointment of the distributor and their status should be clearly mentioned
  • The rights and responsibilities of the company as well as the distributor
  • The events which lead to the termination of the contract
  • The distribution fee payable to the distributor and any other incentives should be stated
  • The general performance standards need to be mentioned including any ethical practices
  • There should be a clause with relation to the product warranty
  • There should be a section on data confidentiality

Types of Monster Energy Distribution Agreement

The types of monster energy distribution contract are as follows:

  • Selective agreements: These Selective agreements apply to luxury goods where the distributor is chosen on the basis of some selective criteria and the company has a say in how goods are sold. The agreement is made with a limited number of dealers
  • Exclusive agreements: The distributor has exclusive rights to sell the products of the company in a particular area. The company cannot supply similar products to other distributors in the area.
  • Non-exclusive agreements: Under such agreements, the company has the right to market its products in one area under multiple distributors.

Key Terms in Monster Energy Distribution Agreement

The key terms of this agreement are:

  • Scope of the agreement: Appointment of the distributor, sole supplier, authorized supplies and so on can be found here.
  • Responsibilities of the distributor: Marketing plan, monthly forecasts, quarterly system quota and general performance standards relating to the distributor
  • Responsibility of the company: Fulfillment of Product orders, product field actions which may require removal of a product from the market
  • Product Unit Warranty: Control unit warranty, applicator warranty and procedure card warranty
  • Term and Termination: Termination for cause, termination for insolvency and on change of control of the company
  • Limited liability: The company is not responsible for losses of the distributors
  • Proprietary rights and confidentiality: Confidential data shared with the distributor should not be disclosed to third parties

Sample Monster Energy Distribution Agreement

A sample of the agreement can be downloaded from below.

Monster Energy Distribution Template

Monster Energy Distribution Agreement

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