What constitutes a violation of law by a 7 Brew franchisee that could lead to termination?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You must secure and maintain all licenses, permits, and certificates required for the Store's operation and operate the Store in full compliance with all Laws, including government regulations relating to occupational hazards, advertising, health, environment, employment, workers' compensation and unemployment insurance, and withholding and payment of federal and state income taxes, social-security taxes, and sales and service taxes. Your advertising and promotion must be completely factual. The Store must in all dealings with its customers, suppliers, us, and the public adhere to the highest standards of honesty, integrity, fair dealing, and ethical conduct. You may not engage in any practice that could injure our business or the goodwill associated with the Marks, the Franchise System, and other 7 BREW Stores, provided, however, that nothing in this Section 7.B or elsewhere in this Agreement restricts or is intended to restrict your or your owners' communications with any state or federal law regulator or enforcement authority about potential violations of law. You must notify us in writing immediately if (i) any legal charge is asserted against you or the Store (even if there is no formal proceeding), (ii) any action, suit, or proceeding is commenced against you or the Store, (iii) you receive any report, citation, or notice regarding the Store's failure to comply with any licensing, health, cleanliness, or safety Law or standard, or (iv) any bankruptcy or insolvency proceeding or an assignment for the benefit of creditors is commenced by or against you, your owners, or the Store.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, franchisees must operate their stores in full compliance with all applicable laws and regulations. This includes securing and maintaining all necessary licenses, permits, and certificates required for the store's operation. Compliance extends to government regulations concerning occupational hazards, advertising, health, environment, employment, workers' compensation and unemployment insurance, and the withholding and payment of federal and state income taxes, social security taxes, and sales and service taxes.
The FDD emphasizes that any legal charges asserted against the franchisee or the store, even without a formal proceeding, must be reported to 7 Brew immediately. Franchisees must also disclose any actions, suits, or proceedings commenced against them or the store, as well as any reports, citations, or notices regarding failure to comply with licensing, health, cleanliness, or safety laws or standards. Additionally, any bankruptcy or insolvency proceedings initiated by or against the franchisee, their owners, or the store must be disclosed.
Failure to adhere to these legal and regulatory requirements can be considered a breach of the franchise agreement and may lead to termination. The FDD also stipulates that franchisees must adhere to the highest standards of honesty, integrity, fair dealing, and ethical conduct in all dealings with customers, suppliers, 7 Brew, and the public. Franchisees are prohibited from engaging in any practice that could harm 7 Brew's business or the goodwill associated with its marks and franchise system.