Are there any exceptions to the general business relationship between 7 Brew and ure Franchise, LLC?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you may not make any express or implied agreements, warranties, guarantees, or representations, or incur any debt, in the name or on behalf of the other or represent that our relationship with you is other than franchisor and franchisee. We will not be obligated for any damages to any person or property directly or indirectly arising from the Store's operation or the business you conduct under this Agreement.
We (and our affiliates) will not exercise direct or indirect control over the working conditions of Store personnel, except to the extent such indirect control is related to our legitimate interest in protecting the quality of our products, services, or brand. We (and our affiliates) do not share or codetermine the employment terms and conditions of the Store's employees and do not affect matters relating to the employment relationship between you and the Store's employees, such as employee selection, promotion, termination, hours worked, rates of pay, other benefits, work assigned, discipline, adjustment of grievances and complaints, and working conditions. To that end, you must notify Store personnel that you are their employer and that we, as the franchisor of 7 BREW Stores, and our affiliates are not their employer and do not engage in any employertype activities for which only franchisees are responsible, such as employee selection, promotion, termination, hours worked, rates of pay, other benefits, work assigned, discipline, adjustment of grievances and complaints, and working conditions. You also must obtain an acknowledgment from all Store employees that you (and not we or our affiliates) are their employer.
During the Term, we and our affiliates will not, except as provided in this Section 3.C and in Section 3.D below, own or operate, or allow another franchisee or licensee to own or operate, another Traditional 7 BREW Store that has its physical location within the geographical area described on Exhibit B (the “Area of Protection”). However, there are no restrictions whatsoever on our and our affiliates' activities with respect to Non-Traditional 7 BREW Stores physically located within the Area of Protection, including, but not limited to, our and our affiliates' right to own and operate and to grant others the right to own and operate such Non-Traditional 7 BREW Stores within the Area of Protection.
| THIS RIDER is made and entered into by and between BREW CULTURE |
|---|
| FRANCHISE, LLC, a Wyoming limited liability company whose principal business address is |
| 2710 S. 48th Street, Springdale, Arkansas 72762 ("we," "us," or "our"), and, a |
| ("you" or "your"). |
| 2. |
| 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 7 Brew's 2025 Franchise Disclosure Document, there are a few specific exceptions and clarifications to the standard franchisor-franchisee relationship, particularly concerning liability, control over store personnel, and territorial rights. 7 Brew emphasizes that franchisees are independent operators and responsible for their store's operations.
7 Brew and its franchisees cannot make agreements or incur debt on behalf of each other, and 7 Brew will not be liable for damages arising from the store's operation. While 7 Brew retains the right to set brand standards and protect the quality of its products and services, it will not exercise direct control over the working conditions of the store's personnel. Franchisees are solely responsible for employment-related matters such as hiring, firing, pay rates, and benefits. Franchisees must also inform their employees that they, and not 7 Brew, are their employer.
Regarding territorial rights, 7 Brew retains significant flexibility. While franchisees are granted an Area of Protection, this protection does not extend to Non-Traditional 7 Brew Stores. 7 Brew and its affiliates can operate Non-Traditional stores within the Area of Protection. They can also offer and sell products and services similar to those sold at 7 Brew stores through various channels, including the internet and retailers, both inside and outside the Area of Protection. 7 Brew can also acquire businesses that compete with 7 Brew, even those operating within a franchisee's Area of Protection. These stipulations highlight the importance of understanding the scope and limitations of the territorial protection offered by 7 Brew.
For franchisees in North Dakota, there are additional exceptions outlined in a rider to the franchise agreement. Releases executed by franchisees will not apply to claims arising under the North Dakota Franchise Investment Law to the extent prohibited by applicable law. While covenants not to compete are generally unenforceable in North Dakota, 7 Brew intends to seek enforcement of these provisions to the extent allowed by law. Arbitration proceedings will be held at a location agreed upon by 7 Brew and the franchisee, as required by the North Dakota Franchise Investment Law, unless preempted by the Federal Arbitration Act.