Under what circumstances is the Rider to the 7 Brew Franchise Agreement required?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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"). |
| 1. |
| BACKGROUND. We and you are parties to that certain Franchise Agreement |
| dated, 20 (the "Franchise Agreement"). This Rider is annexed |
| to and forms part of the Franchise Agreement. This Rider is being signed because (a) you are a |
| resident of North Dakota, and the 7 BREW Store you will operate under the Franchise Agreement |
| will be located in North Dakota, or (b) any of the franchise offer or sales activity relating to the |
| Franchise Agreement occurred in North Dakota. |
| 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 the 2025 7 Brew Franchise Disclosure Document, a Rider to the Franchise Agreement is required under specific circumstances related to the franchisee's location or activities within North Dakota. The Rider is added to the standard Franchise Agreement if the franchisee is a resident of North Dakota, and the 7 Brew store will be located in North Dakota. It is also required if any of the franchise offer or sales activities pertaining to the Franchise Agreement occurred in North Dakota.
The Rider modifies certain sections of the standard Franchise Agreement to comply with North Dakota law. Specifically, it addresses releases, covenants not to compete, and arbitration. For releases, the Rider clarifies that any executed release will not apply to the extent prohibited by applicable law regarding claims arising under the North Dakota Franchise Investment Law. Regarding covenants not to compete, the Rider acknowledges that such covenants are generally considered unenforceable in North Dakota but states that 7 Brew intends to seek enforcement to the extent allowed by law.
For arbitration, the Rider amends the arbitration clause to ensure proceedings are held at a location agreed upon by both parties, to the extent required by the North Dakota Franchise Investment Law, unless preempted by the Federal Arbitration Act. These modifications ensure that the Franchise Agreement complies with North Dakota's specific legal requirements, providing additional protections and clarifications for franchisees operating in that state.