In the 7 Brew receipts confirmation, what is the purpose of inserting initials into the blank space provided?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
orized, that do not appear in or are inconsistent with our franchise documents, and/or that may be untrue, inaccurate, or misleading. We also want to be sure that you understand certain terms of the agreements you will sign and their ramifications. Please review each of the following statements carefully and do not sign this document if it contains anything you think might be untrue. If you sign this document, you are confirming the truth of what it says. In addition, if you sign it, we will take actions in reliance on the truth of what it says.
Initial the spaces after the statements to confirm your understanding and the accuracy of the statements.
| Name of Prospective Franchisee: (the "Franchisee") |
|---|
| Each of the undersigned represents that all of the following statements are true: |
| 1. |
| Each of the undersigned has independently investigated us; our affiliates; the |
| 7 BREW Store system; the risks, burdens, and nature of the business that Franchisee will conduct |
| under the Franchise Agreement; the Store; the shopping or strip center or other location for the |
| Store (if already selected); and the Store's market area. |
| *Insert initials into the following blank to confirm this statement: |
| 2. |
| Each of the undersigned understands that the business Franchisee will conduct |
| under the Franchise Agreement involves risk, and any success or failure will be substantially |
| influenced by Franchisee's ability and efforts, the viability of the Store's location, competition |
| from other businesses, interest rates, inflation, labor and supply costs, lease terms, and other |
| economic and business factors. |
| *Insert initials into the following blank to confirm this statement: |
| December29, | December31, | | December25, | |---|---|---|---| | 2024 | 2023 | 2022 | |
7.2 Actual results vary from unit to unit and from time period to time period, and we cannot estimate, project, or predict the results of any particular 7 BREW Store.
*Insert initials into the following blank to confirm this statement: ___
7.3 We have specifically instructed our affiliates, and our and their respective officers, directors, employees, and agents, that except as provided in Item 19 of our FDD, they are not permitted to make any representation, warranty, promise, guaranty, prediction, projection, or other statement or give other information as to income, sales volume, or profitability, either generally or with respect to any particular 7 BREW Store.
*Insert initials into the following blank to confirm this statement: ___
- Before signing the Franchise Agreement, Development Rights Rider, or any related documents, the undersigned Franchisee has had ample opportunity: (a) to discuss the particular agreement, any related document, and the business Franchisee will conduct with its, his, or her own attorneys, accountants, and real estate and other advisors; (b) to contact our existing franchisees; and (c) to investigate all statements and information made or given by us or our affiliates, or our or their respective officers, directors, employees, and agents, relating to the 7 BREW Store system, the Store, and any other subject.
*Insert initials into the following blank to confirm this statement: ___
- Each of the undersigned understands that the Franchise Agreement licenses certain rights for one, and only one, Store, located only at the location now specified (or to be specified) in the Franchise Agreement, and that, except as may be provided in a Development Rights Rider with us, no "exclusive," "expansion," "protected," "non-encroachable," or other territorial rights, rights of first refusal, or rights of any other kind are granted or have been promised concerning the shopping or strip center or other site at which the Store is located, the contiguous or any other market area of the Store, or any other existing or potential 7 BREW Store or geographic territory.
*Insert initials into the following blank to confirm this statement: ___
- Each of the undersigned understands that nothing stated or promised that is not specifically set forth in the Franchise Agreement, Development Rights Rider, or FDD can be relied upon by the undersigned or Franchisee.
*Insert initials into the following blank to confirm this statement: ___
- Each of the undersigned understands that we and our affiliates may sell or transfer our assets, our trademarks, and/or the 7 BREW Store system outright to a third party; may go public; may engage in a private placement of some or all of our and our affiliates' securities; may merge, acquire other companies, or be acquired by another company;
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
According to the 2025 FDD, 7 Brew requires prospective franchisees to initial various statements within the Franchisee Representations document to confirm their understanding and agreement. This process serves to acknowledge that the franchisee has independently investigated the 7 Brew system, understands the risks involved, and agrees to certain terms and conditions. These statements cover a range of topics, including the franchisee's understanding of the business risks, the non-reliance on any promises outside of the Franchise Agreement and FDD, and the potential for the franchisor to undergo significant changes such as being acquired or selling its assets.
By initialing each statement, the franchisee confirms they have read, understood, and agreed to the specific points outlined. This includes acknowledging that success depends on their efforts, the location's viability, and other economic factors. It also confirms their understanding that the franchisor has not made any guarantees regarding income, sales volume, or profitability, except as provided in Item 19 of the FDD. Furthermore, franchisees acknowledge they had the opportunity to seek advice from their own attorneys, accountants, and advisors before signing any agreements.
The initialing process also addresses the franchisee's understanding of the scope of the franchise rights, confirming that the agreement pertains to a single store at a specific location and that no exclusive territorial rights are granted unless specified in a Development Rights Rider. This ensures that franchisees are aware of the limitations of their franchise and the potential for other 7 Brew locations to open nearby. This practice is common in franchising to ensure franchisees are fully informed and to mitigate potential disputes down the line.
It is important to note that the Franchisee Representations document is not used if the franchise is to be operated in, or the franchisee is a resident of, California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This suggests that 7 Brew may have different procedures or requirements for franchisees in these states, possibly due to specific state franchise laws or regulations.