On what page of the 7 Brew Franchise Agreement can I find information about the Guaranty?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
3. Development Obligations.
- (a) Approved Affiliates. To maintain your rights under this Rider, you (and/or Approved Affiliates) must by the deadlines specified in the Schedule construct, develop, and have open and operating within the Territory the agreed-upon minimum number of Traditional 7 BREW Stores. If your owners establish a new legal entity to operate one or more of the Traditional 7 BREW Stores to be developed pursuant to this Rider and that new legal entity's ownership is completely identical to your ownership, that legal entity automatically will be considered an "Approved Affiliate" without further action. However, if the new legal entity'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:
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 7 Brew Franchise Disclosure Document, information regarding the Guaranty can be found on page 164 of the franchise agreement. Specifically, this page is referenced within Item 22, which pertains to contracts related to development obligations for franchisees planning to open multiple 7 Brew stores.
This section clarifies that if a franchisee establishes a new legal entity to operate additional 7 Brew locations, a Guaranty and Assumption of Obligations document will be required. This document is part of the standard franchise agreement package for each new store developed under the multi-unit development rider. The franchisor needs to approve the new entity if its ownership isn't completely identical to the franchisee's ownership. The franchisor may refuse the request if the franchisee doesn't own and control at least 75% of the new entity's ownership interests and have the authority to exercise voting and management control of the store proposed to be owned by the new entity.
The Guaranty ensures that the obligations of the franchise agreement are met, even if a separate legal entity is created to manage a 7 Brew store. This is a common practice in franchising, as it provides an additional layer of security for the franchisor. Prospective franchisees should carefully review the Guaranty and Assumption of Obligations document with their legal counsel to understand the full scope of their responsibilities and potential liabilities when developing multiple units through affiliated entities.