Does 7 Brew require an Owner's Undertaking of Non-Monetary Obligations as part of its franchise agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT A-2 TO THE BREW CULTURE FRANCHISE, LLC FRANCHISE AGREEMENT
OWNER'S UNDERTAKING OF NON-MONETARY OBLIGATIONS
The undersigned consents and agrees that this liability will not be contingent or conditioned upon Franchisor's pursuit of any remedies against Franchisee or another person and will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence Franchisor may from time to time grant to Franchisee or to another person, including, without limitation, the acceptance of any partial performance or the compromise or release of any claims, none of which will in any way modify or amend this Undertaking, which will continue and be irrevocable during the term of the Agreement (including, without limitation, any extensions of its term) and afterward for so long as any performance is or might be owed under the Agreement by Franchisee or its owners and for so long as Franchisor has any cause of action against Franchisee or any of its owners. This Undertaking will continue in full force and effect for (and as to) any extension or modification of the Agreement and despite the transfer of any interest in the Agreement or Franchisee, and the undersigned waives notice of any and all renewals, extensions, modifications, amendments, or transfers.
Each of the undersigned waives: (i) all rights to payments and claims for reimbursement or subrogation which the undersigned may have against Franchisee arising as a result of the undersigned's execution of and performance under this Undertaking, for the express purpose that none of the undersigned will be deemed a "creditor" of Franchisee under any applicable bankruptcy law with respect to Franchisee's obligations to Franchisor; (ii) acceptance and notice of acceptance by Franchisor of his or her undertakings under this Undertaking, notice of nonperformance of any obligations hereby assumed, protest and notice of default to any party with respect to the nonperformance of any obligations hereby assumed, and any other notices and legal or equitable defenses to which he or she may be entitled; and (iii) all rights to assert or plead any
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Yes, according to the 2025 FDD, 7 Brew requires an Owner's Undertaking of Non-Monetary Obligations as part of its franchise agreement. Exhibit A-2 to the 7 Brew Franchise Agreement outlines the terms of this undertaking.
The Owner's Undertaking of Non-Monetary Obligations ensures that the owner's liability is not contingent on 7 Brew pursuing remedies against the franchisee or any other person. This liability remains in effect throughout the agreement's term, including any extensions, and even after the agreement ends, as long as there are outstanding obligations or potential causes of action. The undertaking remains valid despite any modifications or transfers of interest in the agreement, and the owner waives any notice of renewals, extensions, or amendments.
Furthermore, the owner waives rights to payments, claims for reimbursement, or subrogation against the franchisee to prevent being considered a creditor under bankruptcy law. The owner also waives acceptance and notice of acceptance by 7 Brew, notice of nonperformance, protest, notice of default, and any legal or equitable defenses. This comprehensive waiver ensures that the owner remains fully liable for the non-monetary obligations under the franchise agreement, providing 7 Brew with additional security and recourse in case of the franchisee's non-compliance.