Does the introductory text for 7 Brew mention any non-compete clauses?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
- (1) have any direct or indirect, controlling or non-controlling interest as an owner whether of record, beneficial, or otherwise—in a Competitive Business (defined below), wherever located or operating, provided that this restriction will not prohibit ownership of shares of a class of securities publicly-traded on a United States stock exchange and representing less than three percent (3%) of the number of shares of that class of securities issued and outstanding;
- (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating;
- (3) directly or indirectly loan any money or other thing of value, or guarantee any other person's loan, to any Competitive Business or any owner, director, officer, manager, or employee of any Competitive Business, wherever located or operating;
- (4) divert or attempt to divert any actual or potential business or customer of the Store to a Competitive Business; or
- (5) solicit other franchisees, or use available lists of franchisees, for any commercial purpose other than purposes directly related to the Store's operation.
The term "Competitive Business," as used in this Agreement, means any (a) business that derives more than twenty-five percent (25%) of its revenue from selling coffee, or (b) business granting franchises or licenses to others to operate the type of business described in clause (a), other than a 7 BREW Store operated under a franchise agreement with us.
The term "Immediate Family" includes the named individual, his or her spouse or domestic partner, and all children of the named individual or his or her spouse or domestic partner. You agree to obtain similar covenants from your officers, directors, and other supervisory personnel, to the extent permitted by applicable Law, to the extent their competitive activities would adversely affect your Store or the 7 BREW brand. We may pre-approve the forms of agreements you use solely to ensure that you adequately protect Confidential Information and the competitiveness of 7 BREW Stores. Under no circumstances will we control the forms or terms of employment agreements you use with Store employees or otherwise be responsible for your labor relations or employment practices.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 7 Brew does not include any non-compete clauses in the introductory text. However, Item 22 regarding contracts does discuss restrictions that could be interpreted as non-compete agreements.
Specifically, as a 7 Brew franchisee, you are restricted from having any ownership interest in a competitive business, performing services for a competitive business, loaning money to a competitive business, diverting business from the 7 Brew store to a competitive business, or soliciting other franchisees for commercial purposes. A competitive business is defined as any business that derives more than 25% of its revenue from selling coffee or franchises businesses that do so.
These restrictions also apply to the franchisee's immediate family, including spouse/domestic partner and children. The franchisor may pre-approve agreements used with officers, directors, and supervisory personnel to ensure protection of confidential information and the competitiveness of 7 Brew stores. However, 7 Brew will not control employment agreements with store employees or be responsible for labor relations or employment practices.