Under what circumstances will 7 Brew NOT approve a transfer of franchise rights?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the company may not unreasonably withhold approval of a proposed transfer of franchise rights if certain conditions are met. However, 7 Brew lists several conditions that must be satisfied for a transfer to be considered.
7 Brew will assess the transferee's qualifications, including their business experience, aptitude, and financial resources to operate the store. The transferee must also meet 7 Brew's standards for new or existing franchisees acquiring additional franchises, and they and their affiliates must be in substantial operational compliance with any other 7 Brew franchise agreements they are party to. Furthermore, the transferee and their owners must not be restricted by any other agreement from purchasing the store or ownership interest.
Additionally, all required royalties, brand fund contributions, tech fees, and other amounts owed to 7 Brew and its affiliates must be paid. All required reports and statements must be submitted, and the franchisee must not be in breach of any agreement with 7 Brew or its affiliates. Neither the transferee nor their owners or affiliates can operate, have an ownership interest in, or perform services for a competitive business. The transferee's management personnel, if different from the current management, must also complete 7 Brew's initial training. Finally, the transferee must have the right to occupy the store's site for the expected franchise term. If these conditions are not met, 7 Brew may not approve the transfer.