conditional

Does the 7 Brew franchise agreement include any other agreements between the franchisor (or affiliates) and the franchisee relating to the store?

7_Brew Franchise · 2025 FDD

Answer from 2025 FDD Document

e right to engage, in any other activities we (and our affiliates) desire within the Territory.

YOU ACKNOWLEDGE AND AGREE THAT TIME IS OF THE ESSENCE UNDER THIS RIDER, AND YOUR RIGHTS UNDER THIS RIDER ARE SUBJECT TO TERMINATION, AS PROVIDED IN THIS RIDER, IF YOU DO NOT COMPLY STRICTLY WITH THE DEVELOPMENT OBLIGATIONS PROVIDED IN THE SCHEDULE AND FAIL TO CURE SUCH NON-COMPLIANCE WITHIN NINETY (90) DAYS AFTER RECEIVING WRITTEN NOTICE FROM US. WE MAY ENFORCE THIS RIDER STRICTLY.

3. Development Obligations.

  • (a) Approved Affiliates. To maintain your rights under this Rider, you (and/or Approved Affiliates) must by the deadlines specified in the Schedule construct, develop, and have open and operating within the Territory the agreed-upon minimum number of Traditional 7 BREW Stores. If your owners establish a new legal entity to operate one or more of the Traditional 7 BREW Stores to be developed pursuant to this Rider and that new legal entity's ownership is completely identical to your ownership, that legal entity automatically will be considered an "Approved Affiliate" without further action. However, if the new legal entity's ownership is not completely identical to your ownership, you first must seek our approval for that new entity to develop and operate the proposed Traditional 7 BREW Store as an Approved Affiliate. We may refuse any such request if you and/or your owners do not (a) own and control at least seventy-five percent (75%) of the new entity's ownership interests and (b) have the authority to exercise voting and management control of the Store proposed to be owned by the new entity.
  • (b) Form of Franchise Agreement. You (and/or your Approved Affiliates) will operate each Traditional 7 BREW Store under a separate franchise agreement with us. The franchise agreement (and related documents, including Guaranty and Assumption of Obligations) that you and your owners (or your Approved Affiliate and its owners) must sign for each Traditional 7 BREW Store constructed and developed pursuant to this Rider will be our then-current form of franchise agreement (and related documents, including Guaranty and Assumption of Obligations),

any or all terms of which may differ substantially and materially from any or all terms contained in the First Franchise Agreement, provided, however, that:

  • (i) the initial franchise fee will be Twenty-Five Thousand Dollars ($25,000) for the second and each subsequent Traditional 7 BREW Store to be developed pursuant to this Rider; and
  • (ii) the terms specified in our then-current form of franchise agreement will be modified for each new Traditional 7 BREW Store to include the same terms that you negotiated with us and that appear in any amendment to the First Franchise Agreement, unless you (and your Approved Affiliates) are not then in substantial compliance (subject to any applicable opportunity to cure) with this Rider, the First Franchise Agreement, and all other franchise agreements then in effect between us and you (and your Approved Affiliates) for 7 BREW Stores. If you (and your Approved Affiliates) are not then in substantial compliance with this Rider, the First Franchise Agreement, and all other franchise agreements then in effect between us and you (and your Approved Affiliates) for 7 BREW Stores, and you 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 our and your negotiated terms, and the terms of the franchise agreement we require you to sign may differ substantially and materially from any or all terms contained in the First Franchise Agreement.

Source: Item 22 — CONTRACTS (FDD pages 82–83)

What This Means (2025 FDD)

According to the 2025 FDD, the 7 Brew franchise agreement involves multiple related agreements, especially for franchisees planning to develop multiple locations. Specifically, a Development Rights Rider outlines the obligations and conditions for constructing and operating additional 7 Brew stores within a defined territory.

The Development Rights Rider mandates that franchisees (or their Approved Affiliates) meet specific deadlines for opening the agreed-upon minimum number of Traditional 7 Brew stores. Each store must operate under a separate franchise agreement, which may differ substantially from the initial agreement. This means that while the initial franchise agreement sets the stage, subsequent stores will each have their own agreement, potentially with different terms.

For franchisees considering expansion, the initial franchise fee for the second and subsequent stores is $25,000. The terms of the current franchise agreement can be modified to include negotiated terms from the first agreement, provided the franchisee is in substantial compliance with all existing agreements. However, failure to maintain compliance can result in the new franchise agreements differing significantly from the original, highlighting the importance of adhering to the terms of all agreements to maintain consistent and favorable conditions across all 7 Brew locations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.