What is the transfer fee for a non-controlling ownership interest transfer in a 7 Brew franchise?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
in this Agreement by virtue of Section 9-408 of the Uniform Commercial Code is limited as described in Section 9-408(d) of the Uniform Commercial Code.
C. Conditions for Approval of Transfer
If you and your owners are in full compliance with this Agreement, then, subject to this Section 16's other provisions:
- (1) We will approve the transfer of a non-controlling ownership interest in you if the proposed transferee and its owners are of good moral character, have no ownership interest in and do not perform services for (and have no affiliates with an ownership interest in or performing services for) a Competitive Business, otherwise meet our then-applicable standards for non-controlling owners of 7 BREW Store franchisees, sign our then-current form of Guaranty and Assumption of Obligations or, if applicable, Owner's Undertaking of Non-Monetary Obligations, and pay us a One Thousand Dollar ($1,000) transfer fee. The term "controlling ownership interest" is defined in Section 21.M.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the transfer fee for a non-controlling ownership interest is $1,000. This fee is required when a franchisee seeks to transfer a portion of their ownership that does not give the new owner control over the franchise.
However, this transfer is contingent upon several conditions. The proposed transferee must be of good moral character, must not have any ownership or service relationship with a competing business, and must meet 7 Brew's standards for non-controlling owners. Additionally, the transferee is required to sign 7 Brew's current form of Guaranty and Assumption of Obligations or, if applicable, Owner's Undertaking of Non-Monetary Obligations.
It is important to note that this fee and the associated conditions apply specifically to transfers of non-controlling interests. Transfers involving controlling ownership interests or the franchise rights themselves are subject to a different set of requirements and a higher transfer fee of $10,000.