Are there any exceptions to the enforceability of the agreement with the Owner for 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) This Agreement is the legal, valid, and binding obligation of Owner, enforceable against Owner in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, or other similar laws of general application or by general principles of equity.
This Release of Claims does not apply to claims arising under the Washington Franchise Investment Protection Act, chapter 19.100 RCW, or the rules adopted thereunder in accordance with RCW 19.100.220(2).
[The following is special language for CA-based franchisees—remove for all other states]
Each party granting a release acknowledges a familiarity with Section 1542 of the Civil Code of the State of California, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
Each party granting a release and its authorized signatories hereto recognize that he, she, or it may have some claim, demand, or cause of action against the released parties of which he, she, or it is unaware and unsuspecting, and which he, she, or it is giving up by signing this Addendum. Each party granting a release and its authorized signatories hereby waive and relinquish every right or benefit which he, she, or it has under Section 1542 of the Civil Code of the State of California, and any similar statute under any other state or federal law, to the fullest extent that such right or benefit may lawfully be waived.
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
According to the 2025 FDD, the enforceability of the agreement with the Owner for 7 Brew is subject to certain limitations. Specifically, the agreement's enforceability may be limited by bankruptcy, insolvency, or other similar laws of general application, as well as by general principles of equity. This means that if the Owner faces bankruptcy or insolvency, or if general principles of fairness dictate, the agreement may not be fully enforceable.
This acknowledgment is a fairly standard clause in franchise agreements. It reflects the reality that legal and equitable principles can sometimes override contractual obligations. For a prospective 7 Brew franchisee, this implies that while the agreement is intended to be binding, certain circumstances could affect its strict enforcement.
Additionally, the FDD states that a release of claims does not apply to claims arising under the Washington Franchise Investment Protection Act, chapter 19.100 RCW, or the rules adopted thereunder in accordance with RCW 19.100.220(2). This provides an exception for franchisees operating in Washington state, allowing them to pursue claims under the state's franchise laws despite any general release signed. Similarly, the agreement includes specific language for California-based franchisees regarding Section 1542 of the Civil Code of the State of California, addressing claims unknown at the time of executing the release. These stipulations ensure that franchisees retain certain legal rights and protections, regardless of the general terms of the franchise agreement.