What are the conditions under which 7 Brew will not unreasonably withhold approval of a proposed transfer involving franchise rights or a controlling ownership interest?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
series of transfers (regardless of the timeframe over which those transfers take place) in the aggregate transferring the franchise rights granted by this Agreement or a controlling ownership interest in you or in an Entity owning a controlling ownership interest in you, then we will not
unreasonably withhold our approval of a proposed transfer meeting all of the following conditions:
- a. on both the date you send us the transfer request and the transfer's proposed effective date: (i) the transferee and its direct and indirect owners have the necessary business experience, aptitude, and financial resources to operate the Store; (ii) the transferee otherwise is qualified under our then-existing standards for the approval of new franchisees or of existing franchisees interested in acquiring additional franchises (including the transferee and its affiliates are in substantial operational compliance, at the time of the application, under all other franchise agreements for 7 BREW Stores to which they then are parties with us); and (iii) the transferee and its owners are not restricted by another agreement (whether or not with us) from purchasing the Store or the ownership interest in you or the Entity that owns a controlling ownership interest in you;
- b. on both the date you send us the transfer request and the transfer's proposed effective date, you have paid all required Royalties, Brand Fund contributions, Tech Fees, and other amounts owed to us and our affiliates relating to this Agreement and the Store, have submitted all required reports and statements, and are not in breach of any provision of this Agreement or another agreement with us or our affiliates relating to the Store;
- c. on both the date you send us the transfer request and the transfer's proposed effective date, neither the transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in, or performs services for a Competitive Business;
- d. before or after the transfer's proposed effective date (as we determine), the transferee's management personnel, if different from your management personnel, satisfactorily complete our then-current Initial Training;
- e. the transferee has the right to occupy the Store's site for the expected franchise term;
- f.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew will not unreasonably withhold approval of a proposed transfer involving franchise rights or a controlling ownership interest if certain conditions are met. These conditions pertain to the transferee's qualifications, the franchisee's compliance, and other operational and financial obligations.
Specifically, on both the date the transfer request is sent and the proposed effective date, the transferee must demonstrate the necessary business experience, aptitude, and financial resources to operate the 7 Brew store. The transferee must also meet 7 Brew's standards for new franchisees or existing franchisees acquiring additional franchises, and not be restricted by any other agreements from purchasing the store or ownership interest. Additionally, neither the transferee nor their direct or indirect owners can operate, have an ownership interest in, or perform services for a competitive business.
Furthermore, on both the date of the transfer request and the proposed effective date, the franchisee must have paid all required royalties, brand fund contributions, tech fees, and other amounts owed to 7 Brew and its affiliates. All required reports and statements must be submitted, and the franchisee must not be in breach of any provision of the franchise agreement or other agreements with 7 Brew or its affiliates. The transferee's management personnel, if different from the franchisee's, must also satisfactorily complete 7 Brew's then-current Initial Training. The transferee must also have the right to occupy the store's site for the expected franchise term. Before the transfer's effective date, the franchisee or transferee must pay 7 Brew a $10,000 transfer fee, and the transferee must agree to repair or replace operating assets and upgrade the store, including its physical structure.