Under what circumstances is the Rider to the Franchise Agreement required for a 7 Brew franchise?
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 primarily related to the location of the franchise and certain legal considerations. Specifically, the Rider is required if the franchisee is a resident of North Dakota, and the 7 Brew store will be located in North Dakota. Additionally, the Rider is necessary if any of the franchise offer or sales activity related to the Franchise Agreement occurred in North Dakota.
The Rider modifies certain sections of the standard Franchise Agreement to account for North Dakota's franchise laws. For example, it includes clauses ensuring that any releases executed by the franchisee do not waive rights protected by the North Dakota Franchise Investment Law. It also addresses the enforceability of non-compete covenants, acknowledging that such covenants are generally considered unenforceable in North Dakota but stating 7 Brew's intent to seek enforcement to the extent allowed by law. Furthermore, the Rider modifies the arbitration clause, specifying that arbitration proceedings will be held at a location agreed upon by both parties, consistent with North Dakota law.
This requirement ensures that 7 Brew complies with state-specific regulations and provides franchisees in North Dakota with the legal protections afforded to them under state law. Prospective franchisees should carefully review the Rider and understand how it modifies the standard Franchise Agreement to ensure they are aware of their rights and obligations, particularly concerning releases, non-compete agreements, and arbitration procedures.