What document governs a 7 Brew franchisee's multi-unit development rights and obligations?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not offer single-unit franchises. In other words, we grant franchises only to qualified franchisees that commit to multi-unit development by developing a specific number of 7 BREW Stores (at least 5 Stores) within a defined territory according to a pre-determined development schedule. These franchisees may open and operate their 7 BREW Stores directly or through "Approved Affiliates," which are entities at least 75% of whose ownership is owned and controlled by the franchisee or its owners (although we often reduce this percentage to as low as 51% upon a franchisee's request). Our Development Rights Rider to the Franchise Agreement (Exhibit B), which we also reference as "DRR," governs a franchisee's multi-unit development rights and obligations.
Franchisees must sign our then-current form of Franchise Agreement for each additional 7 BREW Store they develop under the DRR. While that form may differ substantially and materially year to year from the first Franchise Agreement they sign for their first 7 BREW Store to be developed (our current version of Franchise Agreement is disclosed in this disclosure document), the initial franchise fee will not change for the 2nd and each subsequent 7 BREW Store you commit to develop under the DRR. In addition, we will modify our then-current form of franchise agreement for each new 7 BREW Store to include the same terms that you negotiated with us and that appear in any amendment to your first Franchise Agreement, unless you (and your Approved Affiliates) are not then in substantial compliance (subject to any applicable cure opportunity) with the DRR, the first Franchise Agreement, and all other franchise agreements then in effect. If you (and your Approved Affiliates) are not then in substantial compliance with the DRR, the first Franchise Agreement, and all other franchise agreements then in effect and fail to cure such failure within any applicable opportunity to cure, then the terms of our then-current form of franchise agreement will not be modified as provided above to include the terms we previously negotiated with you.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 9–12)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Development Rights Rider to the Franchise Agreement, also referenced as "DRR," governs a franchisee's multi-unit development rights and obligations. 7 Brew does not offer single-unit franchises, so franchisees must commit to developing at least 5 stores within a defined territory according to a pre-determined schedule.
The DRR outlines the specific terms and conditions related to the development schedule, territory, and other obligations that the franchisee must adhere to. It is important for prospective franchisees to carefully review the DRR to understand their commitments and responsibilities regarding multi-unit development.
Franchisees must sign 7 Brew's current Franchise Agreement for each additional store they develop under the DRR. While the form may change year to year from the first Franchise Agreement, the initial franchise fee will not change for the 2nd and subsequent stores committed to under the DRR. The franchisor will modify the current form of the franchise agreement for each new store to include the same terms that were negotiated and appear in any amendment to the first Franchise Agreement, unless the franchisee is not in substantial compliance with the DRR, the first Franchise Agreement, and all other franchise agreements then in effect.
If a franchisee fails to comply with the DRR, the first Franchise Agreement, and all other franchise agreements, and fails to cure such failure within any applicable opportunity to cure, then the terms of the current form of the franchise agreement will not be modified to include the terms previously negotiated.