What is the definition of 'transfer' according to the 7 Brew franchise agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge that the rights and duties this Agreement creates are personal to you and your owners, and we have granted you the rights under this Agreement in reliance upon our perceptions of your and your owners' character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither: (i) this Agreement or any interest in this Agreement; (ii) the Store's physical structure; (iii) any right to receive all or a portion of the profits, losses, or capital appreciation relating to the Store; (iv) all or substantially all of the Operating Assets; (v) any ownership interest in you; nor (vi) a controlling ownership interest in an Entity with an ownership interest in you, may be transferred without our prior written approval. A transfer of the Store's ownership, possession, or control, or all or substantially all of the Operating Assets, may be made only with the concurrent transfer (to the same proposed transferee) of the franchise rights (with the transferee assuming this Agreement or signing our then-current form of franchise agreement and related documents, as we may require, although in the latter case we will amend our then-current form of franchise agreement to include the same terms that you negotiated with us and that appear in any amendment to this Agreement). Any transfer without our prior written approval is a breach of this Agreement and has no effect, meaning you and your owners will continue to be obligated to us for all your obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the franchise agreement stipulates that the rights and duties within the agreement are personal to the franchisee and their owners. 7 Brew has granted rights based on their assessment of the franchisee's character, skills, business ability, and financial capacity. Therefore, any transfer of the agreement, the store's physical structure, profits, operating assets, or ownership interest requires 7 Brew's prior written approval.
The term 'transfer' encompasses several scenarios. It includes transferring the franchise agreement itself, any interest in the agreement, the store's physical structure, the right to receive profits or capital appreciation from the store, all or substantially all of the operating assets, any ownership interest in the franchisee's business, or a controlling ownership interest in an entity that owns the franchisee's business. Essentially, any significant change in ownership or control of the 7 Brew store or its assets is considered a transfer.
The 7 Brew franchise agreement specifies that any transfer of the store's ownership, possession, or control, or substantially all of its operating assets, must include a concurrent transfer of the franchise rights to the same proposed transferee. This means the transferee must either assume the existing franchise agreement or sign 7 Brew's current franchise agreement. Transferring without prior approval constitutes a breach of the agreement, leaving the original franchisee and their owners still obligated under the agreement's terms. This provision ensures that 7 Brew maintains control over who operates its franchises and upholds brand standards.