How long does a 7 Brew franchisee have to pay suppliers to avoid termination for cause?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| f. Termination by franchisor with cause | 18.B of Franchise Agreement and 8 of DRR 4(b) of Manufacturing Agreement | We have the right to terminate your Franchise |
| Agreement (and development rights) only if | ||
| you or your owners commit one of several | ||
| violations. | ||
| While termination of the DRR does not | ||
| impact any then-effective franchise | ||
| agreements, termination of a franchise | ||
| agreement entitles us to terminate the DRR. | ||
| Manufacturer has the right to terminate the | ||
| Manufacturing Agreement for cause. | ||
| g. “Cause” defined curable defaults | 18.B of Franchise Agreement and 8 of DRR 4(b) of Manufacturing Agreement | You have 5 days to cure Gross Sales |
| reporting, payment (to us), and insurance | ||
| defaults and defaults under any note, lease, or | ||
| agreement relating to Store’s operation or | ||
| ownership; 10 days to satisfy unpaid | ||
| judgments of at least $25,000; 30 days to pay | ||
| suppliers and to cure other defaults not listed | ||
| in (h) below; and 60 days to vacate | ||
| attachment, seizure, or levy of Storeor | ||
| appointment of receiver, trustee, or liquidator. |
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, a franchisee has 30 days to pay suppliers to avoid termination for cause. This falls under the curable defaults as defined in Section 18.B of the Franchise Agreement and Section 8 of DRR 4(b) of the Manufacturing Agreement.
This means that if a 7 Brew franchisee fails to pay their suppliers, 7 Brew can issue a notice of default. The franchisee then has 30 days from that notice to rectify the situation by paying the outstanding amounts to the suppliers. If the franchisee does not meet this deadline, 7 Brew has the right to terminate the Franchise Agreement.
It is important for prospective 7 Brew franchisees to understand these cure periods and ensure they have sufficient financial management systems in place to meet their obligations to suppliers. Failure to do so could result in the termination of their franchise and loss of their investment. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand's reputation and ensure all franchisees are meeting their financial obligations.