What is a 7 Brew franchisee required to do if they want to purchase from a supplier that hasn't been approved?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If you want to purchase or lease any Operating Assets, products, or services from a supplier or distributor we have not then approved (if we require you to buy or lease the asset, product, or service only from an approved supplier or distributor), then you must establish to our reasonable satisfaction that the quality and functionality of the item or service are equivalent to those of the item or service it replaces and that the supplier or distributor is, among other things, reputable, financially responsible, and adequately insured for product-liability claims.
You must pay upon request any actual expenses and TRE we incur to determine whether or not the items, services, suppliers, or distributors meet our requirements and specifications.
- (3) We may condition our written approval of a supplier or distributor on requirements relating to product taste, quality, and safety; third-party lab testing; prices; consistency; warranty; supply-chain reliability and integrity; financial stability; customer relations; frequency, economy, and efficiency of delivery; concentration of purchases; standards of service (including prompt attention to complaints); and other criteria.
We have the right to inspect the proposed supplier's or distributor's facilities and to require the proposed supplier or distributor to deliver product samples or items either directly to us or to any third party we designate for testing.
If we approve a supplier or distributor you recommend, you agree that we may allow other 7 BREW Stores to purchase or lease the Operating Assets, products, or services from those suppliers or distributors without limitation and without compensation to you.
- (4) Despite the foregoing, we may limit the number of approved suppliers and distributors with which you may deal, designate sources you must use, and refuse any of your requests for any reason, including, without limitation, because we have already designated an exclusive source (which might be us or one of our affiliates) for a particular item or service or believe that doing so is in the 7 BREW Store network's best interests.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, if a franchisee wishes to purchase operating assets, products, or services from a supplier not already approved by 7 Brew, they must first demonstrate to 7 Brew's satisfaction that the quality and functionality of the item or service are equivalent to those of the approved item or service. Additionally, the franchisee must show that the unapproved supplier or distributor is reputable, financially responsible, and adequately insured for product-liability claims.
Furthermore, the 7 Brew franchisee is responsible for covering any actual expenses that 7 Brew incurs while evaluating the proposed supplier, distributor, items, or services to ensure they meet the brand's requirements and specifications. 7 Brew may also set conditions for approving a supplier or distributor, which could include requirements related to product taste, quality, safety, third-party lab testing, prices, consistency, warranty, supply-chain reliability, financial stability, customer relations, delivery efficiency, purchase concentration, and service standards.
7 Brew retains the right to inspect the facilities of the proposed supplier or distributor and request product samples for testing, either directly or through a designated third party. If 7 Brew approves a supplier recommended by a franchisee, 7 Brew may allow other 7 Brew stores to purchase from that supplier without any obligation to compensate the franchisee who made the initial recommendation. However, 7 Brew maintains the right to limit the number of approved suppliers, designate mandatory sources, and reject requests for any reason, including the existence of an exclusive source for a particular item or service or if it believes doing so is in the best interest of the 7 Brew network.