What section of the 7 Brew Franchise Agreement discusses termination by the franchisee?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| d. Termination by franchisee | 18.A of Franchise | If we breach Franchise Agreement and do not |
| Agreement | ||
| 4(a) of Manufacturing | ||
| Agreement | ||
| cure default within applicable cure period | ||
| after notice from you, or if your Store does | ||
| not reach a certain EBITDA level; otherwise, | ||
| you may not terminate without cause, subject | ||
| to state law. | ||
| Subject to state law, you may terminate | ||
| Manufacturing Agreement if the | ||
| manufacturer fails to perform obligations and | ||
| to cure the failure within 30 days after notice, | ||
| or if the manufacturer becomes insolvent or is | ||
| involved in a bankruptcy-related event. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 54–61)
What This Means (2025 FDD)
According to the 2025 7 Brew Franchise Disclosure Document, the conditions under which a franchisee can terminate the agreement are detailed in Section 18.A of the Franchise Agreement and Section 4(a) of the Manufacturing Agreement. Specifically, a 7 Brew franchisee can terminate the Franchise Agreement if 7 Brew breaches the agreement and fails to correct the breach within the specified cure period after receiving notice from the franchisee. Additionally, termination is possible if the store does not reach a certain EBITDA level, though this is subject to state law. Otherwise, the franchisee cannot terminate the agreement without cause, also subject to state law.
Regarding the Manufacturing Agreement, a 7 Brew franchisee may terminate it, subject to state law, if the manufacturer fails to fulfill its obligations and does not correct the failure within 30 days after receiving notice. Termination is also permitted if the manufacturer becomes insolvent or is involved in a bankruptcy-related event.
It is important for prospective 7 Brew franchisees to understand these termination conditions, as they outline the limited circumstances under which a franchisee can end the agreement without facing penalties. Franchisees should consult with a legal professional to fully understand their rights and obligations regarding termination, as state laws can significantly impact these provisions.