factual

For how long after the 7 Brew franchise is terminated or expires are non-competition covenants in effect?

7_Brew Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in franchise or other agreement Summary
transferee (and each owner) qualifies
(including, if transferee is an existing
franchisee, transferee is in substantial
operational compliance under all other
franchise agreements for 7 BREW Stores)
and is not restricted by another agreement
from moving forward with the transfer; you
have paid us and our affiliates all amounts
due, have submitted all reports, and are not
then in breach; transferee and its owners and
affiliates are not in a competitive business;
training completed; transfer fee paid;
transferee may occupy Store’s site for
expected franchise term; transferee (at our
option) assumes your Franchise Agreement or
signs our then-current form of franchise
agreement and other documents for unexpired
portion of your original franchise term (then-
current form may have materially different
terms, except that your original Royalty,
Brand Fund contribution, and Tech Fee levels
and Area of Protection definition will remain
the same for unexpired portion of your
original franchise term and, if we previously
agreed to amend your Franchise Agreement
before you signed it, we will incorporate such
amendments into the then-current form of
franchise agreement that is signed by the
transferee); transferee agrees to repair and
upgrade; you (and transferring owners) sign
general release (if applicable state law
allows); we determine that sales terms and
financing will not adversely affect Store’s
operation post-transfer; you subordinate
amounts due to you; and you stop using
Marks and our other intellectual property
(also see (r) below).
n. Franchisor’s right of first refusal to acquire franchisee’s business 16.G of Franchise Agreement We have the right to match any offer for your
Store (including its physical structure) or
ownership interest in you or entity that
controls you.
We have the right to match any offer for
underlying real estate on which Store’s
physical structure is located if you or your
owner directly or indirectly holds title to that
underlying real estate and wishes to sell that
real estate as part of any sale or transfer with
respect to which we have the right-of-first-
refusal described above.
o. Franchisor’s option to Not Applicable We do not have this right. We do not have this right.
purchase franchisee’s
business
p. Death or disability of 16.E of Franchise Must transfer to approved party (which may
franchisee Agreement
include immediate family member) within 6
months.
q. Non-competition covenants during the term of the franchise 12 of Franchise Agreement No owning interest in, performing services
for, or loaning money or guaranteeing loan to
competitive business, wherever located or
operating; no diverting business to
competitive business; and no solicitation of
other franchisees for other commercial
purposes. “Competitive Business” means any
(a) business deriving more than 25% of its
revenue from selling coffee, or (b) business
granting franchises or licenses to others to
operate the type of businesses described in
clause(a).
r. Non-competition covenants after the franchise is terminated or expires 19.E of Franchise Agreement For 2 years after franchise term, no owning
interest in or performing services for
Competitive Business located or operating at
Store’s site, within 3 miles of former Store
site, or within 3 miles of physical location of
another 7 BREW Store (same restrictions
apply after transfer).
s. Modification of the agreement No modifications generally, but we have the right to change Operations Manual and Brand Standards. No modifications generally, but we have the
right to change Operations Manual and Brand
Standards.
t. Integration/merger clause 21.M of Franchise Only terms of Franchise Agreement and other
Agreement
related written agreements are binding
(subject to applicable state law). No other
representations or promises will be binding.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 54–61)

What This Means (2025 FDD)

According to 7 Brew's 2025 Franchise Disclosure Document, if a franchise is terminated or expires, the non-competition covenants are in effect for a period of 2 years. During this 2-year period, the franchisee is restricted from owning interest in or performing services for a Competitive Business.

A "Competitive Business" is defined as any business deriving more than 25% of its revenue from selling coffee, or any business granting franchises or licenses to others to operate businesses that derive more than 25% of their revenue from selling coffee.

The restrictions apply to businesses located or operating at the Store’s site, within 3 miles of the former Store site, or within 3 miles of the physical location of another 7 Brew Store. These same restrictions also apply after a transfer of the franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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