What constitutes a breach that would prevent a 7 Brew franchise transfer?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
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, several conditions must be met to secure approval for a franchise transfer. 7 Brew will not unreasonably withhold approval of a proposed transfer if certain conditions are met. These conditions focus on the qualifications and compliance of both the transferor (current franchisee) and the transferee (prospective franchisee).
Specifically, on the date the transfer request is sent and the proposed effective date, the current franchisee must have paid all required Royalties, Brand Fund contributions, Tech Fees, and other amounts owed to 7 Brew and its affiliates. They also must have submitted all required reports and statements and must not be in breach of any provision of the Franchise Agreement or any other agreement with 7 Brew or its affiliates related to the store. This means any outstanding financial obligations, unreported data, or violations of agreements could impede the transfer process.
Furthermore, the prospective transferee must also meet certain criteria. The transferee and its owners must have the necessary business experience, aptitude, and financial resources to operate the 7 Brew store. They must also be qualified under 7 Brew's then-existing standards for new franchisees, including being in substantial operational compliance under any other 7 Brew franchise agreements they may have. Additionally, neither the transferee nor their owners can operate, have an ownership interest in, or perform services for a Competitive Business. Meeting all of these conditions is crucial for a smooth franchise transfer process with 7 Brew.