If 7 Brew acquires a business that operates Competitive Businesses, can 7 Brew franchise or license those businesses within the Area of Protection?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) to acquire the assets or ownership interests of one or more businesses offering and selling products and services similar to those offered and sold at 7 BREW Stores (even if such a business operates, franchises, or licenses Competitive Businesses (defined in Section 12 below), including food trucks), and operate, franchise, license, or create similar arrangements for those businesses once acquired, wherever those businesses (or the franchisees or licensees of those businesses) are located or operating, including within the Area of Protection;
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew has the right to acquire businesses that offer similar products and services to 7 Brew stores, even if these businesses operate, franchise, or license what the agreement defines as 'Competitive Businesses,' including food trucks. Following such an acquisition, 7 Brew can operate, franchise, license, or create similar arrangements for these acquired businesses, regardless of their location, including within a franchisee's Area of Protection.
This clause means that a 7 Brew franchisee's Area of Protection is not a guarantee against competition from businesses that 7 Brew itself acquires and continues to operate under a different brand. The franchisee's protected area only restricts 7 Brew from opening another traditional 7 Brew store. This is a significant consideration for prospective franchisees, as it introduces a potential source of competition that is outside of the franchisee's control and not limited by the typical restrictions.
This reservation of rights gives 7 Brew considerable flexibility in its business development strategies. While it allows 7 Brew to grow through acquisitions and expand its market presence, it also poses a risk to franchisees who might find themselves competing with businesses that 7 Brew has acquired and chosen to operate within their protected area. Franchisees should carefully consider this aspect and its potential impact on their investment before entering into an agreement with 7 Brew.