If a 7 Brew franchisee wants to purchase from a non-approved supplier, what must they establish to 7 Brew's satisfaction?
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 or distributor not already approved by 7 Brew, they must demonstrate to 7 Brew's reasonable satisfaction that the quality and functionality of the alternative item or service are equivalent to those of the approved item or service it would replace. Additionally, the franchisee must show that the proposed supplier or distributor is reputable, financially responsible, and adequately insured for product-liability claims.
This requirement ensures that all 7 Brew locations maintain consistent quality and standards, regardless of the supplier. It protects the brand's reputation and minimizes potential risks associated with substandard products or unreliable suppliers. The franchisee bears the responsibility of proving the equivalence and reliability of the proposed supplier, which may involve considerable effort and expense.
7 Brew may also impose specific conditions for approving a supplier or distributor, such as 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 supplier's facilities and request product samples for testing. Even if a franchisee recommends a supplier who is approved, 7 Brew may allow other franchisees to use that supplier without compensating the original franchisee.
Ultimately, 7 Brew reserves the right to limit the number of approved suppliers, designate mandatory sources, and reject any supplier requests, even if the franchisee meets the initial requirements. This could occur if 7 Brew has already designated an exclusive source for a particular item or service, or if they believe limiting the suppliers is in the best interest of the 7 Brew system. Franchisees should be aware of these stipulations and the potential limitations on their choice of suppliers.