Will 7 Brew modify the new franchise agreement to include specifically-negotiated provisions from the expiring agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| c. Requirements for franchisee | 17 of Franchise | You (i) timely request and conduct a business |
| to renew or extend | Agreement | |
| review, (ii) formally notify us of your desire | ||
| to acquire a successor franchise at least 3 | ||
| months before the end of the franchise term, | ||
| (iii) substantially complied with contractual | ||
| obligations and operated Store in substantial | ||
| compliance with Brand Standards, (iv) | ||
| continue complying substantially with | ||
| contractual obligations between time you | ||
| notify us of your desire to acquire a successor | ||
| franchise and the end of the franchise term, | ||
| (v) remodel/upgrade Store, (vi) sign our then- | ||
| current form of franchise agreement and | ||
| releases (if applicable state law allows), and | ||
| (vii) pay $10,000 successor-franchise fee. | ||
| Terms of new franchise agreement that you | ||
| sign for successor franchise may differ | ||
| materially from any and all terms contained in | ||
| your original expiring Franchise Agreement | ||
| (including higher fees), provided that we will | ||
| modify the new franchise agreement to | ||
| include any specifically-negotiated provisions | ||
| to which we agreed with you before you | ||
| signed the Franchise Agreement that is | ||
| expiring, and you will retain the same defined | ||
| Area of Protection. |
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, when a franchisee seeks to renew their franchise agreement, the terms of the new agreement may differ significantly from the original, potentially including higher fees. However, 7 Brew will modify the new franchise agreement to incorporate any specifically negotiated provisions that were agreed upon with the franchisee before they signed the expiring agreement. Additionally, the franchisee will retain the same defined Area of Protection.
This means that if a prospective 7 Brew franchisee negotiates specific terms into their initial franchise agreement, those terms will carry over into any successor franchise agreement. This provides a level of security and predictability for franchisees who have successfully negotiated favorable terms.
However, it is important to note that all other terms are subject to change, potentially including fees. Franchisees should carefully review the then-current franchise agreement and factor in potential changes to fees and other obligations when deciding whether to renew their franchise. The successor-franchise fee is $10,000.
This policy of honoring previously negotiated terms is not universal in franchising. Some franchisors may insist on a clean slate with each renewal, requiring franchisees to accept the then-current agreement in its entirety. 7 Brew's approach offers a potential advantage for franchisees who are proactive in negotiating their initial agreement.