What documents must a transferee sign for a non-controlling ownership interest transfer in a 7 Brew franchise?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
in this Agreement by virtue of Section 9-408 of the Uniform Commercial Code is limited as described in Section 9-408(d) of the Uniform Commercial Code.
C. Conditions for Approval of Transfer
If you and your owners are in full compliance with this Agreement, then, subject to this Section 16's other provisions:
- (1) We will approve the transfer of a non-controlling ownership interest in you if the proposed transferee and its owners are of good moral character, have no ownership interest in and do not perform services for (and have no affiliates with an ownership interest in or performing services for
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, a transferee acquiring a non-controlling ownership interest must sign specific documents to gain approval for the transfer. The transferee is required to sign 7 Brew's then-current form of Guaranty and Assumption of Obligations or, if applicable, Owner's Undertaking of Non-Monetary Obligations. This ensures that the transferee understands and agrees to abide by the obligations associated with the franchise.
In addition to signing the specified documents, the proposed transferee and its owners must meet certain criteria. They must be of good moral character, and they cannot have any ownership interest in or perform services for a Competitive Business. Meeting 7 Brew's standards for non-controlling owners of 7 Brew store franchisees is also a condition for approval.
It is important to note that the transferee must also pay a $1,000 transfer fee. These requirements ensure that 7 Brew maintains control over who becomes an owner, even in a non-controlling capacity, and that all owners are committed to the brand and its standards. Prospective franchisees should carefully review these requirements and ensure that any potential transferees are aware of and willing to meet them.