What information about the franchisee's direct or indirect owners does 7 Brew require?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
F. Your Form and Structure
As a corporation, limited liability company, or general, limited, or limited liability partnership (each, an "Entity"), you agree and represent that:
- (4) Exhibit B to this Agreement completely and accurately describes all of your owners and their interests (direct or indirect) in you as of the Effective Date;
- (5) Your (and your owners') execution and delivery of this Agreement and any related agreement with us (or our affiliates), and performance of your (and their) obligations under this Agreement and such other related agreements, (a) have not violated and will not violate any other agreement or commitment to which you (or they) are a party or by which you (or they) are otherwise bound, and (b) have not violated and will not violate the rights of, or duties owed to, any third party;
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 7 Brew Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, 7 Brew requires specific information and agreements regarding the franchisee's owners. Exhibit B to the Franchise Agreement must completely and accurately describe all of the franchisee's owners and their direct or indirect interests in the franchisee as of the effective date of the agreement.
7 Brew also requires that the franchisee's organizational documents, operating agreement, or partnership agreement, at 7 Brew's request, must state that the Franchise Agreement restricts the issuance and transfer of any direct or indirect ownership interests in the franchisee. Furthermore, all certificates and other documents representing ownership interests must bear a legend referring to these restrictions, with the wording prescribed by 7 Brew. These measures ensure that 7 Brew maintains control over who can become an owner in a 7 Brew franchise and that all owners are aware of the restrictions imposed by the Franchise Agreement.
Additionally, 7 Brew mandates that the franchisee and its owners confirm that their execution and delivery of the Franchise Agreement and any related agreements, as well as their performance of obligations under these agreements, do not violate any other agreements or commitments to which they are a party or by which they are bound, and do not infringe upon the rights of or duties owed to any third party. This requirement aims to protect 7 Brew from potential legal issues arising from conflicts between the franchisee's or its owners' other obligations and their obligations under the Franchise Agreement. These stipulations are typical in franchise agreements to ensure the stability and legal compliance of the franchise operation.