Under what conditions is this Rider to the Franchise Agreement signed 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, the Rider to the Franchise Agreement is signed under specific conditions related to the franchisee's location. The Rider is annexed to and forms part of the Franchise Agreement. This Rider is signed because either the franchisee is a resident of North Dakota and will operate the 7 Brew store in North Dakota, or any franchise offer or sales activity relating to the Franchise Agreement occurred in North Dakota.
This Rider modifies certain sections of the standard Franchise Agreement to comply with North Dakota franchise law. Specifically, it addresses releases, covenants not to compete, and arbitration. Any release executed will not apply to the extent prohibited by applicable law with respect to claims arising under the North Dakota Franchise Investment Law. While covenants not to compete are generally considered unenforceable in North Dakota, 7 Brew intends to seek enforcement of these provisions to the extent allowed under the law. The Rider also amends the arbitration clause, specifying that proceedings will be conducted within ten miles of 7 Brew's principal business address or at a site agreed upon by both parties, as required by North Dakota Franchise Investment Law.
For a prospective franchisee, this means that if you are located in North Dakota or the franchise agreement was initiated there, you will have additional protections and modifications to the standard agreement to align with state law. It is important to understand these modifications, especially regarding the enforceability of non-compete clauses and the location of arbitration proceedings, as they may impact your rights and obligations as a franchisee. Franchisees should consult with a legal professional to fully understand the implications of these modifications.