Which sections of the 7 Brew Franchise Agreement have language added to them by the Rider?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
RELEASES. The following language is added at the end of Sections 4.A, 16.A, 16.C(2)(i), 16.G, 17, and 19.F(3) of the Franchise Agreement:
Any release executed will not apply to the extent otherwise prohibited by applicable law with respect to claims arising under the North Dakota Franchise Investment Law. 3. COVENANT NOT TO COMPETE. Section 19.E of the Franchise Agreement is amended by adding the following: Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota. However, you acknowledge and agree
that we intend to seek enforcement of these provisions to the extent allowed under the law. 4. ARBITRATION. The third sentence of Section 21.F of the Franchise Agreement is amended to read as follows: All proceedings, including the hearing, will be conducted at a suitable location that is within ten (10) miles of where we have our (or, in the case of a transfer by us,
the then-current franchisor has its) principal business address when the arbitration demand is filed, provided, however, that to the extent required by the North Dakota Franchise Investment Law (unless such a requirement is preempted by the Federal Arbitration Act), arbitration proceedings will be held at a site to which we and you agree.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 7 Brew Franchise Disclosure Document, the Rider modifies specific sections of the Franchise Agreement. For franchisees in North Dakota, the Rider adds language to Sections 4.A, 16.A, 16.C(2)(i), 16.G, 17, and 19.F(3), clarifying that any releases executed will not waive rights under the North Dakota Franchise Investment Law. Section 19.E is also amended to acknowledge the general unenforceability of non-compete covenants in North Dakota, while still allowing 7 Brew to seek enforcement to the extent permitted by law. Additionally, Section 21.F regarding arbitration is modified to ensure proceedings are held within ten miles of 7 Brew's principal business address or, if required by North Dakota law and not preempted by the Federal Arbitration Act, at a mutually agreed-upon site.
For franchisees in Maryland, Paragraphs (7) through (14) of Section 2 of the Franchise Agreement are deleted. The Rider adds language to the end of Section 2, clarifying that representations requiring a release, estoppel, or waiver of liability do not act as such under the Maryland Franchise Registration and Disclosure Law. Section 5.A has language added regarding a surety bond of $850,000 secured by 7 Brew due to the franchisor's financial condition, with a copy on file at the Maryland Office of the Attorney General, Securities Division. The Rider also adds language to Sections 4.A, 16.A, 16.C(2)(i), 16.G, 17, and 19.F(3), stating that general releases required for renewal, sale, or transfer do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law.
Furthermore, the Rider adds language to Section 21.G, specifying that Maryland law will apply to claims arising under the Maryland Franchise Registration and Disclosure Law to the extent required by applicable law. Section 21.H is modified to allow franchisees to bring actions in Maryland for claims under the Maryland Franchise Registration and Disclosure Law, subject to arbitration obligations. Finally, a sentence is added to Section 21.L, requiring that claims under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the franchise grant. These modifications ensure compliance with state-specific franchise laws and provide additional protections for franchisees in North Dakota and Maryland.