For a 7 Brew franchise transfer, what financial obligations must be met by the transferor?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
other franchise agreements for 7 BREW Stores to which they then are parties with us); and (iii) the transferee and its owners are not restricted by another agreement (whether or not with us) from purchasing the Store or the ownership interest in you or the Entity that owns a controlling ownership interest in you;
- b. on both the date you send us the transfer request and the transfer's proposed effective date, you have paid all required Royalties, Brand Fund contributions, Tech Fees, and other amounts owed to us and our affiliates relating to this Agreement and the Store, have submitted all required reports and statements, and are not in breach of any provision of this Agreement or another agreement with us or our affiliates relating to the Store;
- c. on both the date you send us the transfer request and the transfer's proposed effective date, neither the transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in, or performs services for a Competitive Business;
- d. before or after the transfer's proposed effective date (as we determine), the transferee's management personnel, if different from your management personnel, satisfactorily complete our then-current Initial Training;
- e. the transferee has the right to occupy the Store's site for the expected franchise term;
- f.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, a transferor—the existing franchisee selling their business—has several financial obligations to 7 Brew that must be met before the transfer can proceed. Specifically, on both the date the transfer request is submitted and the proposed effective date of the transfer, the transferor must have paid all required Royalties, Brand Fund contributions, Tech Fees, and any other amounts owed to 7 Brew and its affiliates related to the franchise agreement and the store.
In addition to ensuring all outstanding debts are settled, the transferor or the transferee is responsible for paying a $10,000 transfer fee to 7 Brew before the transfer's effective date. This fee compensates 7 Brew for the administrative costs and efforts associated with reviewing and approving the transfer.
Furthermore, the transferor needs to ensure that the transferee agrees to repair, replace, and upgrade the store according to 7 Brew's current standards for new stores, within a timeframe specified by 7 Brew. While the transferee typically handles the actual costs of these upgrades, securing their commitment is the transferor's responsibility. The transferor must also agree that if they finance any part of the purchase price, their rights to the Operating Assets are subordinate to the franchisee's obligation to pay Royalties, Brand Fund contributions, Tech Fees, and other amounts due to 7 Brew and its affiliates.
These financial obligations ensure that 7 Brew maintains its revenue streams and brand standards during and after the transfer process. Prospective transferors should carefully review their financial records and the condition of their store to accurately assess the costs associated with a transfer and to avoid potential delays or complications.