You just fired your broker. The relationship was not working, the accounts were stagnant, and you are ready to take your retail strategy in a new direction. Then you get a letter from their attorney reminding you that you owe commissions on every order from their accounts for the next 12 months. Welcome to the post-termination commission period, one of the most misunderstood and expensive clauses in CPG broker agreements.
Most founders sign broker contracts without reading these clauses carefully. That is a six-figure mistake waiting to happen. Understanding how post-termination commissions work, what is standard, and how to negotiate fair terms will save you real money and real headaches when it is time to part ways.
Why Brokers Include Post-Termination Commission Clauses
Broker commission clauses exist for a legitimate reason. When a broker spends 6 to 18 months building relationships with retail buyers, pitching your product, negotiating shelf placement, and managing account launches, they have invested real time and resources into those accounts. The post-termination commission period compensates them for that investment after the relationship ends.
Think of it from the broker's side. They introduced your brand to 150 stores, managed the buyer relationships, executed resets, and built your velocity. If you terminate the agreement and immediately start collecting revenue from those same accounts without paying the broker, you are benefiting from their work without compensation. The trailing commission is the broker's insurance policy against that scenario.
Post-termination commissions are not a penalty. They compensate brokers for the pipeline and relationships they built during the contract. The question is not whether you should pay them, but how long and on what terms.
That said, many broker agreements include post-termination clauses that are far more aggressive than the work justifies. A broker who placed you in 20 stores over two years should not collect trailing commissions at the same rate as one who built your entire 500-store national distribution footprint. The clause needs to match the contribution.
What Typical Post-Termination Periods Look Like
Industry standards vary, but here is what you will see in most CPG broker agreements:
Duration. The most common post-termination commission period runs 6 to 12 months after the effective termination date. Some agreements push to 18 or even 24 months, but anything beyond 12 months is aggressive and worth pushing back on. Six months is increasingly the standard for regional brokers. National brokers with larger account portfolios often insist on 12 months.
Commission rate. Most agreements maintain the full commission rate during the post-termination period. If you were paying 7 percent during the active contract, you pay 7 percent during the trailing period. Some better-negotiated contracts include a declining rate structure: full rate for the first 3 months, 50 percent of rate for months 4 through 6, then zero. This declining structure more accurately reflects the broker's diminishing contribution to those accounts over time.
Covered accounts. This is where the real money is. Post-termination clauses typically cover "accounts serviced by broker during the term of the agreement." The broader that definition, the more you pay. A well-drafted clause specifies exactly which accounts are covered, usually by listing them explicitly or referencing the most recent account roster.
New orders vs. reorders. Some clauses cover only reorders from existing placements. Others cover any order from a covered account, including new SKU additions and expanded distribution within that retailer. The distinction matters enormously. If you are launching three new SKUs into Sprouts after termination, paying your former broker 7 percent on those orders (which they had nothing to do with) is unreasonable.
Opener gives you full pipeline visibility into every retail account, so you always know exactly which relationships you own and which ones a broker influenced.
Book a DemoHow to Negotiate Fair Post-Termination Terms
The best time to negotiate post-termination terms is before you sign the broker agreement, not when you are trying to leave. Here are the specific terms worth fighting for.
Cap the Duration at 6 Months
Push for a 6-month post-termination period. This gives the broker reasonable compensation for their pipeline work while limiting your long-term exposure. If the broker insists on 12 months, counter with a declining rate structure: full commission for months 1 through 3, half commission for months 4 through 6, zero after that. The math works out to roughly 75 percent of what a flat 6-month period costs, and it is easier for brokers to accept because the headline number is still "6 months."
Define "Covered Accounts" Narrowly
The account roster attached to your agreement should be a living document that is updated quarterly. At termination, only accounts on the most recent roster should be covered by the trailing commission. Accounts that the broker managed two years ago but that have since been reassigned or gone inactive should not qualify.
Insist on language that limits covered accounts to those where the broker "actively serviced and maintained the buyer relationship within the 90 days preceding termination." This prevents a broker from claiming commissions on accounts they stopped working months before you terminated.
Exclude New Business Post-Termination
Your post-termination clause should explicitly exclude new SKU launches, new department placements, and distribution expansions within covered accounts that occur after the termination date. The broker should collect trailing commissions only on the business they built, not on growth you drive independently after parting ways.
A simple sentence handles this: "Post-termination commissions apply only to reorders of SKUs actively distributed in covered accounts as of the termination date."
Include a Mutual Termination Trigger
Some agreements include post-termination commissions even when the broker terminates the agreement. This is one-sided. If the broker walks away from the relationship, they should not continue collecting. Negotiate for a clause that waives or reduces post-termination commissions when the broker initiates the termination.
Request a "termination for cause" carve-out. If you are terminating because the broker failed to meet minimum performance thresholds spelled out in the agreement (for example, failing to add any new accounts in a 6-month period), the post-termination commission should be waived entirely. This gives your termination clause teeth.
Legal Implications and Common Pitfalls
Post-termination commission disputes are among the most common legal conflicts in CPG broker relationships. Here is what to watch for.
Get the termination in writing. Always terminate in writing with a clear effective date, sent via certified mail or email with delivery confirmation. Verbal terminations create ambiguity about when the post-termination clock starts, and that ambiguity costs you money. Your termination letter should reference the specific contract section, state the effective date, and attach the current account roster that will be subject to trailing commissions.
Audit the invoices. During the post-termination period, your former broker will continue sending commission invoices. Audit every single one. Verify that the accounts listed are on the covered roster. Confirm that the orders are reorders of existing SKUs, not new business. Check the commission rate against the agreed trailing rate. Disputes are much easier to resolve in real time than six months after the fact.
Watch for "evergreen" clauses. Some broker agreements auto-renew and include language that makes the post-termination period contingent on proper notice. If your agreement requires 90 days written notice to prevent auto-renewal, and you miss the window, you may be locked into another full term before the post-termination period even begins. Calendar your notice deadlines the day you sign the agreement.
State law matters. Broker commission protections vary by state. Some states have specific sales representative protection statutes that can override your contract terms. California, Illinois, and New York have particularly strong protections for sales agents, including provisions for double or triple damages if commissions are wrongfully withheld. Have an attorney review your agreement under the governing law specified in the contract.
Founders often stop paying trailing commissions cold turkey after termination, assuming the broker will not pursue it. Brokers absolutely pursue unpaid post-termination commissions, and the legal costs of defending a wrongful withholding claim far exceed what the commissions would have cost. If you owe trailing commissions, pay them on time and dispute specific invoices individually.
Building Your Transition Plan
The smartest way to handle a broker termination is to plan the transition before you send the termination letter.
Map every account. Build a complete list of accounts the broker manages, with buyer contacts, current distribution, and recent order history. This becomes your reference document for what the trailing commission covers and your roadmap for taking over account management.
Introduce yourself to buyers before termination. Start building direct relationships with your key retail buyers while the broker is still in place. Attend buyer meetings, show up at store visits, and make sure the buyer knows your face and name. When the broker exits, you want a warm handoff, not a cold restart.
Have your replacement strategy ready. Whether you are hiring a direct sales rep, engaging a new broker, or using a platform like Opener to manage outreach to verified buyers on autopilot, have the replacement infrastructure in place before you terminate. A gap in account coverage during the post-termination period means you are paying trailing commissions while nobody is actively selling. That is the worst of both worlds.
Communicate clearly with the broker. A professional, respectful termination protects the relationship and reduces the odds of a dispute. Brokers talk to each other. The CPG broker community is small, and a reputation for messy terminations makes it harder to find your next partner.
Wrapping Up
Post-termination broker commission periods are a normal part of CPG broker agreements, but the default terms in most contracts favor the broker heavily. Negotiate the duration, scope, and rate structure before you sign, document everything during the relationship, and plan your transition carefully when it is time to move on.
Opener connects your brand directly to best-fit stores and verified buyers, so you build retail relationships you own from day one.
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