Under the 7 Brew agreement, can either party be held liable for lost profits?

According to the 2025 7 Brew Franchise Disclosure Document, both 7 Brew and the franchisee (referred to as "Owner" in this section) are protected from liability for lost profits. Specifically, Article 8(c) of the agreement states that neither party is liable to each other or any third party for indirect, consequential, incidental, special, punitive, or exemplary damages.

This limitation on damages explicitly includes categories such as lost business, lost profits, damage to goodwill or reputation, degradation in the value of brands, trademarks, tradenames, service names or service marks, or injury to persons. This protection applies regardless of whether the damages arise from breach of contract, warranty, tort (including negligence, failure to warn, or strict liability), contribution, indemnity, subrogation, or other legal theories.

This clause means that if a 7 Brew franchisee experiences a loss of profits due to issues such as supply chain problems, marketing failures, or other unforeseen circumstances, they cannot sue 7 Brew for compensation related to those lost profits. Similarly, 7 Brew cannot seek compensation from the franchisee for lost profits they might have experienced due to the franchisee's actions or inactions. This type of clause is relatively common in franchise agreements as it sets clear boundaries for potential liabilities between the parties.

However, it is important to note that this limitation likely applies only to the types of damages specifically listed (indirect, consequential, etc.). Direct damages might still be recoverable. A prospective franchisee should consult with a legal professional to fully understand the implications of this clause and what types of claims are truly waived.