Does the modification of the 7 Brew franchise agreement terms include terms negotiated and appearing in amendments to the First Franchise Agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
s ownership is not completely identical to your ownership, you first must seek our approval for that new entity to develop and operate the proposed Traditional 7 BREW Store as an Approved Affiliate. We may refuse any such request if you and/or your owners do not (a) own and control at least seventy-five percent (75%) of the new entity's ownership interests and (b) have the authority to exercise voting and management control of the Store proposed to be owned by the new entity.
- (b) Form of Franchise Agreement. You (and/or your Approved Affiliates) will operate each Traditional 7 BREW Store under a separate franchise agreement with us. The franchise agreement (and related documents, including Guaranty and Assumption of Obligations) that you and your owners (or your Approved Affiliate and its owners) must sign for each Traditional 7 BREW Store constructed and developed pursuant to this Rider will be our then-current form of franchise agreement (and related documents, including Guaranty and Assumption of Obligations),
any or all terms of which may differ substantially and materially from any or all terms contained in the First Franchise Agreement, provided, however, that:
- (i) the initial franchise fee will be Twenty-Five Thousand Dollars ($25,000) for the second and each subsequent Traditional 7 BREW Store to be developed pursuant to this Rider; and
- (ii) the terms specified in our then-current form of franchise agreement will be modified for each new Traditional 7 BREW Store to include the same terms that you negotiated with us and that appear in any amendment to the First Franchise Agreement, unless you (and your Approved Affiliates) are not then in substantial compliance (subject to any applicable opportunity to cure) with this Rider, the First Franchise Agreement, and all other franchise agreements then in effect between us and you (and your Approved Affiliates) for 7 BREW Stores. If you (and your Approved Affiliates) are not then in substantial compliance with this Rider, the First Franchise Agreement, and all other franchise ag
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, when a franchisee develops subsequent Traditional 7 Brew stores under a Development Rights Rider, the terms of the then-current franchise agreement will be modified to include the same terms that the franchisee negotiated with 7 Brew and that appear in any amendment to the First Franchise Agreement. This modification is contingent upon the franchisee (and their Approved Affiliates) being in substantial compliance with the Rider, the First Franchise Agreement, and all other franchise agreements in effect between them and 7 Brew for 7 Brew Stores.
However, if the franchisee (or their Approved Affiliates) are not in substantial compliance and fail to cure such failure, the terms of the then-current franchise agreement will not be modified to include the negotiated terms. In this case, the terms of the franchise agreement that 7 Brew requires the franchisee to sign may differ substantially and materially from the terms contained in the First Franchise Agreement.
This clause ensures that franchisees who maintain good standing with 7 Brew can carry over previously negotiated terms into new franchise agreements for additional stores. Conversely, it protects 7 Brew by not extending preferential terms to franchisees who are not in compliance with their existing agreements. For a prospective franchisee, this highlights the importance of adhering to the terms of all agreements with 7 Brew to maintain the benefit of previously negotiated terms in future franchise agreements.