Can 7 Brew operate Non-Traditional 7 Brew Stores within a franchisee's Area of Protection?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
with our system and the Marks.
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
franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Except for your rights with respect to Traditional 7 BREW Stores physically located within the Area of Protection, we and our affiliates retain all rights with respect to all 7 BREW Stores, the Marks, the offer and sale of products and services that are similar to, competitive with, or dissimilar from the products and services your Store offers and sells, and any other activities we and they deem appropriate, whenever and wherever we and they desire.
Source: Item 12 — TERRITORY (FDD pages 45–49)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew and its affiliates have the right to own and operate Non-Traditional 7 Brew stores within a franchisee's Area of Protection. The Area of Protection for a Traditional 7 Brew store is a radius of 1.5 to 2 miles from the store's walls, depending on the Metropolitan Statistical Area size. However, this protection does not extend to Non-Traditional 7 Brew stores. Therefore, 7 Brew retains unrestricted rights regarding Non-Traditional stores, meaning a franchisee may face competition from these outlets within their protected area. This also means that franchisees will not receive an exclusive territory.
This policy has significant implications for prospective franchisees. While franchisees are granted an Area of Protection for Traditional stores, the lack of restrictions on Non-Traditional stores introduces potential competition within that area. This could impact a franchisee's revenue and market share. The FDD also states that 7 Brew does not need to compensate franchisees if they engage in these activities.
Furthermore, 7 Brew retains all rights to 7 Brew stores, marks, and the offer and sale of similar products and services, allowing them to engage in any activities they deem appropriate. This includes the right to offer and sell products and services that compete with those of the franchisee, both inside and outside the Area of Protection. Prospective franchisees should carefully consider the potential impact of these competitive activities on their investment and profitability. Understanding the distinction between Traditional and Non-Traditional stores, and the rights 7 Brew retains, is crucial for making an informed decision about investing in a 7 Brew franchise.