Does the 7 Brew agreement expressly prohibit 7 Brew from engaging in any activities?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Your location exclusivity in the Territory for Traditional 7 BREW Stores is the only restriction on our (and our affiliates') activities within the Territory during this Rider's term. We and our affiliates have the right to engage, and to grant others the right to engage, in any other activities of any nature whatsoever within the Territory, including, without limitation, all of the activities in which we reserve the right to engage in the First Franchise Agreement. After this Rider expires or is terminated (regardless of the reason for termination), we and our affiliates have the right, without any restrictions whatsoever, to (a) construct, develop, and operate, and to grant others the right to construct, develop, and operate, Traditional 7 BREW Stores physically located in the Territory (except within the Area of Protection surrounding each of your Traditional 7 BREW Stores) and (b) continue to engage, and to grant others the right to engage, in any other activities we (and our affiliates) desire within the Territory.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 FDD, the 7 Brew franchise agreement does place some restrictions on the franchisor's activities, particularly concerning the franchisee's area of protection. Specifically, the agreement states that the franchisee's location exclusivity for Traditional 7 Brew Stores within their territory is the primary restriction on 7 Brew's activities. This means that while the franchise agreement is in effect, 7 Brew and its affiliates are limited from opening traditional stores within the franchisee's protected territory. However, this restriction applies only to traditional stores and is in effect only during the term of the agreement.
7 Brew retains the right to engage in any other activities within the territory, including those activities they reserve the right to engage in within the First Franchise Agreement. After the agreement expires or is terminated, 7 Brew has the right to construct, develop, and operate traditional 7 Brew Stores within the territory, except within the area of protection around the franchisee's stores. They can also continue to engage in any other activities they desire within the territory without any restrictions.
Additionally, 7 Brew reserves the right to construct, develop, and operate Non-Traditional 7 Brew Stores within the franchisee's territory, and this will not count towards the franchisee's compliance with the development schedule. They can also own and operate Non-Traditional 7 Brew Stores inside and outside the Area of Protection. They can offer and sell products and services that are identical or similar to those offered by 7 Brew Stores, even under different trademarks, through various channels, provided they do not operate food trucks within the Area of Protection that compete with 7 Brew Stores. These stipulations ensure that while franchisees have some territorial protection, 7 Brew maintains considerable freedom to operate and expand its brand through various means.