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so today Im going to talk about franchise and non franchise state distribution agreements and before I do so I wanted to just briefly talk about the three-tier system which Im sure many of you already know that in the beverage alcohol industry we have three tiers in which we sell products so the first tier is the supplier manufacturer in Pierre the second is wholesaler distributor and Im going to use both terms interchangeably and then last is the retailer and of course consumers purchase their goods from the retailer so today when were talking about the distribution agreements were going to be talking about the supplier or distributor level so just by way of background back in 1933 after the repeal of prohibition what happen was that beverage alcohol reverted back to the individual states so the states could decide how they could distribute the product so there were two different categories we have open States which allows private individuals to be licensed and actually distribut