Does 7 Brew allow franchisees to contest the amount owed to suppliers?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) We have the right (without liability) to consult with your suppliers about the status of your account with them and to advise your suppliers and others with whom you, we, our affiliates, and other franchisees deal that you are in default under any agreement with us or our affiliates (but only if we or our affiliate has notified you of such default).
- (6) all amounts due to us, our affiliates, and principal suppliers have been paid;
- (7) you are not in default under any agreement with us, our affiliates, or principal suppliers and have met our other opening requirements.
- (2) If you want to purchase or lease any Operating Assets, products, or services from a supplier or distributor we have not then approved (if we require you to buy or lease the asset, product, or service only from an approved supplier or distributor), then you must establish to our reasonable satisfaction that the quality and functionality of the item or service are equivalent to those of the item or service it replaces and that the supplier or distributor is, among other things, reputable, financially responsible, and adequately insured for product-liability claims.
You must pay upon request any actual expenses and TRE we incur to determine whether or not the items, services, suppliers, or distributors meet our requirements and specifications.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, 7 Brew does not explicitly outline a procedure for franchisees to formally contest the amount owed to suppliers. However, the FDD does state some conditions related to suppliers. 7 Brew may designate and approve suppliers from whom franchisees must purchase products and services. If a franchisee wishes to use an unapproved supplier, they must demonstrate to 7 Brew that the supplier meets certain standards regarding quality, reputation, and financial responsibility. The franchisee is responsible for covering any expenses 7 Brew incurs in evaluating the proposed supplier.
7 Brew retains the right to consult with a franchisee's suppliers about the status of the franchisee's account and advise suppliers if the franchisee is in default under any agreement with 7 Brew or its affiliates, assuming the franchisee has been notified of such default. The FDD also specifies that franchisees must have paid all amounts due to 7 Brew, its affiliates, and principal suppliers to meet the requirements for opening a store.
While the FDD does not provide a mechanism for contesting amounts owed, it does emphasize the importance of maintaining good standing with suppliers. A prospective franchisee should inquire with 7 Brew about the process for resolving disputes with suppliers and what recourse is available if they believe an invoice is incorrect or unjustified. Understanding these procedures is crucial for managing relationships with suppliers and maintaining compliance with 7 Brew's standards.
In summary, while the 7 Brew FDD outlines the brand's control over supplier selection and the franchisee's obligation to maintain good financial standing, it lacks specific details on dispute resolution processes related to supplier payments. A potential franchisee should seek clarification from 7 Brew on this matter to fully understand their rights and responsibilities.