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Today's tutorial will cover franchise and non-franchise state distribution agreements within the three-tier system of the beverage alcohol industry. The three tiers consist of the supplier, wholesaler/distributor, and retailer, with consumers purchasing goods from retailers. After the repeal of prohibition in 1933, states were given the authority to regulate beverage alcohol distribution. Open states permit private individuals to be licensed distributors, while franchise states require suppliers to exclusively work with one distributor.