What standards must the proposed transferee meet to be approved as a 7 Brew franchisee?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
regate transferring the franchise rights granted by this Agreement or a controlling ownership interest in you or in an Entity owning a controlling ownership interest in you, then we will not
unreasonably withhold our approval of a proposed transfer meeting all of the following conditions:
- a. on both the date you send us the transfer request and the transfer's proposed effective date: (i) the transferee and its direct and indirect owners have the necessary business experience, aptitude, and financial resources to operate the Store; (ii) the transferee otherwise is qualified under our then-existing standards for the approval of new franchisees or of existing franchisees interested in acquiring additional franchises (including the transferee and its affiliates are in substantial operational compliance, at the time of the application, under all other franchise agreements for 7 BREW Stores to which they then are parties with us); and (iii) the transferee and its owners are not restricted by another agreement (whether or not with us) from purchasing the Store or the ownership interest in you or the Entity that owns a controlling ownership interest in you;
- b. on both the date you send us the transfer request and the transfer's proposed effective date, you have paid all required Royalties, Brand Fund contributions, Tech Fees, and other amounts owed to us and our affiliates relating to this Agreement and the Store, have submitted all required reports and statements, and are not in breach of any provision of this Agreement or another agreement with us or our affiliates relating to the Store;
- c. on both the date you send us the transfer request and the transfer's proposed effective date, neither the transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in, or performs services for a Competitive Business;
- d. before or after the transfer's proposed effective date (as we determine), the transferee's management personnel, if different from your management personnel, satisfactorily complete our then-current Initial Training;
- e. the transferee has the right to occupy the Store's site for the expected franchise term;
- f.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the proposed transferee must meet several conditions to be approved as a 7 Brew franchisee. 7 Brew will not unreasonably withhold approval of a proposed transfer if the following conditions are met.
First, both on the date the transfer request is sent and on the proposed effective date, the transferee and its owners must demonstrate the necessary business experience, aptitude, and financial resources to operate the store. The transferee must also be qualified under 7 Brew's then-existing standards for new franchisees or existing franchisees looking to acquire additional franchises. This includes being in substantial operational compliance under any other 7 Brew franchise agreements they may have. Additionally, the transferee and its owners must not be restricted by any other agreement from purchasing the store or the ownership interest.
Second, neither the transferee nor any of its direct or indirect owners or affiliates can operate, have an ownership interest in, or perform services for a competitive business on both the date the transfer request is sent and the transfer's proposed effective date. The transferee's management personnel, if different from the current management, must also satisfactorily complete 7 Brew's then-current Initial Training before or after the transfer's proposed effective date. The transferee must also have the right to occupy the store's site for the expected franchise term.
Finally, before the transfer's proposed effective date, the franchisee or the transferee must pay 7 Brew a transfer fee of $10,000. The transferee must also agree to repair or replace operating assets and upgrade the store to meet 7 Brew's current requirements for new stores within a specified timeframe. The transferring franchisee must sign a general release of all claims against 7 Brew and its affiliates. 7 Brew must also determine that the purchase price, payment terms, and required financing will not adversely affect the transferee's operation of the store.