What section of the 7 Brew Franchise Agreement discusses termination by the franchisor with cause?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| f. Termination by franchisor with cause | 18.B of Franchise Agreement and 8 of DRR 4(b) of Manufacturing Agreement | We have the right to terminate your Franchise |
| Agreement (and development rights) only if | ||
| you or your owners commit one of several | ||
| violations. | ||
| While termination of the DRR does not | ||
| impact any then-effective franchise | ||
| agreements, termination of a franchise | ||
| agreement entitles us to terminate the DRR. | ||
| Manufacturer has the right to terminate the | ||
| Manufacturing Agreement for cause. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 54–61)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the section of the Franchise Agreement that discusses termination by the franchisor with cause is Section 18.B. Additionally, Section 8 of the Development Rights Rider 4(b) of the Manufacturing Agreement also pertains to termination by the franchisor with cause. The FDD specifies that 7 Brew has the right to terminate the Franchise Agreement and development rights if the franchisee or their owners commit certain violations.
It is important for a prospective franchisee to understand what constitutes 'cause' for termination. The 7 Brew FDD outlines both curable and non-curable defaults that could lead to termination. Curable defaults, such as issues with Gross Sales reporting, payments, or insurance, provide the franchisee an opportunity to rectify the situation within a specified timeframe. Non-curable defaults, on the other hand, are more severe and can lead to immediate termination.
Understanding the specific violations that could lead to termination is crucial for any potential 7 Brew franchisee. This knowledge allows the franchisee to operate their business in compliance with the Franchise Agreement and avoid actions that could jeopardize their franchise. Prospective franchisees should carefully review Sections 18.B of the Franchise Agreement and Section 8 of the DRR 4(b) of the Manufacturing Agreement to fully understand their rights and obligations regarding termination.