Can 7 Brew operate Non-Traditional 7 Brew Stores inside a franchisee's Area of Protection?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
During the franchise term, we and our affiliates will not own or operate, or allow another franchisee or licensee to own or operate, another Traditional 7 BREW Store that has its physical location within an "Area of Protection" described in an exhibit to the Franchise Agreement. Your Area of Protection will be a radius from the walls of the Store's building equal to either 1.5 or 2 miles depending on the size of the Metropolitan Statistical Area in which your Store is located. However, there are no restrictions whatsoever on our and our affiliates' activities with respect to Non-Traditional 7 BREW Stores physically located within the Area of Protection, including our and our affiliates' right to own and operate and to grant others the right to own and operate such Non-Traditional 7 BREW Stores within the Area of Protection. Because of our and our affiliates' rights with respect to Non-Traditional 7 BREW Stores physically located within the Area of Protection, you will not receive an exclusive territory. You may face competition from other
Source: Item 12 — TERRITORY (FDD pages 45–49)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew retains significant rights regarding Non-Traditional 7 Brew Stores, including the ability to operate them within a franchisee's Area of Protection. Specifically, 7 Brew and its affiliates have no restrictions on operating Non-Traditional 7 Brew Stores within the Area of Protection. This means that a franchisee's protected area, which is a radius of 1.5 to 2 miles from the store, only applies to Traditional 7 Brew Stores.
This lack of exclusivity regarding Non-Traditional stores means that a 7 Brew franchisee could face direct competition from other 7 Brew outlets, including those owned by the franchisor itself, within their Area of Protection. The FDD emphasizes that franchisees will not receive an exclusive territory due to 7 Brew's rights concerning Non-Traditional stores. This is a critical factor for prospective franchisees to consider, as it directly impacts the potential for competition and market saturation within their designated area.
Furthermore, the Development Rights Rider (DRR) specifies that a franchisee's right to construct and operate stores within a territory applies only to Traditional 7 Brew Stores. The development of Non-Traditional 7 Brew Stores by 7 Brew or other franchisees within the territory does not count towards a franchisee's development schedule compliance. This distinction reinforces the franchisor's control over Non-Traditional outlets and their strategic placement, irrespective of a franchisee's development obligations for Traditional stores. Prospective franchisees should carefully evaluate the potential impact of Non-Traditional stores on their investment and revenue projections.