What information about the franchisee's owners must be included in Exhibit B to the 7 Brew Franchise Agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
3. Development Obligations.
- (a) Approved Affiliates. To maintain your rights under this Rider, you (and/or Approved Affiliates) must by the deadlines specified in the Schedule construct, develop, and have open and operating within the Territory the agreed-upon minimum number of Traditional 7 BREW Stores. If your owners establish a new legal entity to operate one or more of the Traditional 7 BREW Stores to be developed pursuant to this Rider and that new legal entity's ownership is completely identical to your ownership, that legal entity automatically will be considered an "Approved Affiliate" without further action. However, if the new legal entity's ownership is not completely identical to your ownership, you f
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Exhibit B to the 7 Brew Franchise Agreement, also known as the Development Rights Rider, requires the franchisee to construct and develop a minimum number of Traditional 7 Brew Stores within a specific territory. To maintain these rights, the franchisee and/or their Approved Affiliates must meet the construction and operational deadlines outlined in the schedule. If the franchisee's owners establish a new legal entity to operate one or more of these stores, and the ownership of this entity is completely identical to the franchisee's ownership, it will automatically be considered an 'Approved Affiliate.'
However, if the new legal entity's ownership structure differs from the franchisee's, it will not automatically qualify as an Approved Affiliate. This distinction is important because it affects the franchisee's ability to fulfill their development obligations under the Development Rights Rider. The rider includes a table of territory coordinates, with each coordinate point having a two-mile radius, collectively forming the 'Territory' for the rider. This table contains more coordinate points than the number of Traditional 7 Brew Stores required, providing the franchisee with sufficient options for construction and development.
In summary, Exhibit B focuses on the geographical aspects of development, defining the territory using coordinate points and setting obligations for store construction. While the exhibit itself doesn't explicitly list required information about the franchisee's owners, the terms of the Development Rights Rider emphasize the importance of maintaining consistent ownership structures when establishing new legal entities for store operation. This ensures accountability and adherence to the development schedule, which is crucial for maintaining the franchisee's rights under the agreement.