What are the 7 Brew franchisee's obligations regarding pre-opening purchases/leases (Item 9) and how do these relate to the franchisor's requirements for point-of-sale systems (Item 8)?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Pre-Opening Assistance
Before you begin operating the Store:
- We will review potential Store sites that you identify within the development territory. You must locate, evaluate, select, and secure the Store's site. We will not search for or select the site for you. (DRR—Section 6(a)) We first must accept each new site you propose for each new 7 BREW Store. Our then-current standards for sites will apply.
We will give you our then-current criteria for Traditional 7 BREW Store sites (including population density and other demographic characteristics, visibility, traffic flow, competition, accessibility, ingress and egress, size, and other physical and commercial characteristics) to help in the site-selection process. We will review potential Traditional 7 BREW Store sites that you identify within the development territory but have no obligation to visit the territory to inspect physically the sites you propose for your potential
Stores. We have the right to condition our acceptance of a proposed site, or a proposed site visit, on your first sending us complete site reports and other materials (including photographs and digital recordings) we request. You must give us all information and materials we request to assess each proposed Traditional 7 BREW Store site. (DRR— Section 6(b))
We will use reasonable efforts to review and accept or reject each site you propose within 30 days after we receive all requested information and materials. If we do not accept the site in writing within 30 days, the site is deemed rejected. We will not unreasonably withhold our acceptance of a site if, in our and our affiliates' experience and based on the factors outlined above, the proposed site is not inconsistent with sites that we and our affiliates regard as favorable or that otherwise have been successful sites in the past for Traditional 7 BREW Stores. However, we have the absolute right to reject any site not meeting our criteria or to require you to acknowledge in writing that a site you prefer is accepted but not recommended due to its incompatibility with certain factors bearing on a site's suitability as a location for a Traditional 7 BREW Store. After we accept and you secure a proposed site, we will identify that site as the Store's address in the Franchise Agreement. (DRR—Section 6(b)) We do not own locations for lease to franchisees.
If we accept a proposed site but you (or your Approved Affiliate) have not yet signed a franchise agreement for that 7 BREW Store, the DRR requires you—concurrently with signing the lease for or otherwise securing the right to possess the site—to sign (or have your Approved Affiliate sign) a separate franchise agreement (and related documents) for that Store. Nevertheless, we might allow you to sign the Franchise Agreement later at or closer to the Store's opening—if you are diligently working on the Store's development. If you (or your Approved Affiliate) cannot obtain lawful possession of the acceptable proposed site within the time period we designate, we have the right to withdraw our acceptance of the proposed site (we have that same right if you fail to sign the Franchise Agreement when required). After you and your owners (or your Approved Affiliate and its owners) sign the franchise agreement (and related documents, including Guaranty and Assumption of Obligations), its terms and conditions will control the construction, development, and operation of the 7 BREW Store (except that the required opening date is governed exclusively by the DRR's development schedule). (DRR—Section 6(c))
If you do not find and secure acceptable Store sites so that you can open the required Stores by the opening deadlines in the DRR, we have the right to terminate the DRR.
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- We will not be involved in reviewing, negotiating, approving, or accepting any lease you sign for the Traditional 7 BREW Stores you construct and develop under the DRR. You alone are exclusively responsible for all lease matters. The only requirement we impose upon you is that the site's lease must incorporate the terms of our then-current Lease Rider (attached to the Franchise Agreement) for Traditional 7 BREW Stores. You must send us a fully-signed copy of each Store's lease within 10 days after our request. (DRR—Section 6(d))
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- We will make template Plans available to you. Our Plans might not reflect the requirements of any federal, state, or local laws, codes, ordinances, or regulations,
including those arising under the ADA, or any lease requirements or restrictions. You are solely responsible for complying with all laws and must inform us of any changes to the Store's specifications that you believe are necessary to ensure such compliance.
You must ensure that your Adapted Plans for the Store comply with all laws and lease requirements and restrictions.
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, franchisees bear significant responsibility for pre-opening site selection, securing the location, and ensuring compliance with all applicable laws and regulations. 7 Brew will review potential store sites identified by the franchisee within their development territory, but the franchisee is responsible for locating, evaluating, and securing the site. 7 Brew must accept each new site, and their then-current standards for sites will apply. The franchisee is solely responsible for all lease matters, and the lease must incorporate the terms of 7 Brew's then-current Lease Rider. Franchisees must send 7 Brew a fully-signed copy of each store's lease within 10 days after their request. Franchisees are responsible for ensuring their Adapted Plans for the store comply with all laws and lease requirements and restrictions. 7 Brew has the right to pre-approve the architect and must pre-approve the Adapted Plans before build-out begins. During the store's build-out, 7 Brew has the right to inspect the store to review compliance with Brand Standards. Except as provided, 7 Brew does not assist in conforming the premises to local ordinances and building codes, obtaining required permits, or constructing, remodeling, or decorating the premises. If the franchisee fails to secure acceptable store sites and open the required stores by the deadlines in the DRR, 7 Brew has the right to terminate the DRR.
Regarding point-of-sale (POS) systems, 7 Brew requires franchisees to obtain and use the computer hardware and software, point-of-sale system, computer-related accessories and peripheral equipment, tablets, smart phones, on-line, digital, and App ordering systems, and on-line inventory ordering system they periodically specify, referred to as the "Computer System". This system must be used to access the System Website and to input and access information about sales and operations, operating continuously. 7 Brew has continuous, unlimited access to all information maintained on the Computer System, excluding labor relations and employment practices, and to the content of any 7 Brew e-mail accounts provided. 7 Brew may periodically modify the Computer System's specifications and components, and such modifications may require franchisees to purchase, lease, or license new or modified computer components, software, and peripherals and to obtain service and support for the Computer System.
The FDD excerpts do not explicitly state how the costs of pre-opening purchases/leases (Item 9 topics) are directly related to the franchisor's requirements for point-of-sale systems (Item 8 topics). However, it is implied that franchisees will need to budget for the initial purchase or lease of the required Computer System as part of their pre-opening expenses. Additionally, future modifications to the Computer System mandated by 7 Brew could result in further capital expenditures for the franchisee. While Item 8 generally discusses restrictions on sources of products and services, including the right for 7 Brew to designate specific suppliers, the direct financial implications and specific costs associated with the POS system are not detailed in the provided excerpts. A prospective franchisee should seek clarification from 7 Brew regarding the estimated initial and ongoing costs of the Computer System, as well as any potential cost-caps or financial assistance programs related to these technology requirements.