Under what conditions can 7 Brew terminate the development rider?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Termination. We have the right at any time to terminate this Rider and your rights under this Rider to construct and develop Traditional 7 BREW Stores within the Territory, such termination to be effective upon our delivery to you of written notice of termination:
- (a) if you fail to satisfy any development obligation under the Schedule and do not cure such failure within ninety (90) days after receiving written notice from us;
- (b) if you fail to satisfy any other obligation under this Rider, which default you have no right to cure;
- (c) if the First Franchise Agreement, or another franchise agreement between us and you (or your Approved Affiliate) for a 7 BREW Store, is terminated by us in compliance with its terms or by you (or your Approved Affiliate) without cause; or
- (d) if we have delivered a formal written notice of default to you (or your Approved Affiliate) under the First Franchise Agreement, or another franchise agreement between us and you (or your Approved Affiliate) for a 7 BREW Store, and you (or your Approved Affiliate) fail to cure that default within the required timeframe.
No portion of the Development Fee is refundable upon termination of this Rider or under any other circumstances. If we terminate this Rider because you fail to satisfy your development obligations under the Schedule, we will keep the Development Fee (which is not refundable) but otherwise will not seek to recover damages from you due solely to your failure to comply with the Schedule.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Development Rights Rider can be terminated under specific conditions. 7 Brew has the right to terminate the Rider and the franchisee's rights to construct and develop Traditional 7 Brew stores in the territory if the franchisee fails to meet development obligations outlined in the Schedule and does not correct this failure within 90 days of receiving written notice. This strict adherence to the schedule is emphasized, with time being of the essence.
7 Brew can also terminate the rider if the franchisee fails to meet any other obligation under the Rider and the default is not curable. Additionally, if the First Franchise Agreement or any other franchise agreement between 7 Brew and the franchisee is terminated either by 7 Brew in compliance with its terms or by the franchisee without cause, 7 Brew can terminate the Development Rights Rider. Finally, 7 Brew can terminate the rider if a formal written notice of default has been delivered to the franchisee under the First Franchise Agreement or another franchise agreement for a 7 Brew store, and the franchisee fails to cure that default within the required timeframe.
It is important to note that upon termination of the Development Rights Rider, no portion of the Development Fee is refundable. If 7 Brew terminates the Rider due to the franchisee's failure to satisfy development obligations, 7 Brew will retain the Development Fee but will not seek to recover additional damages solely due to the failure to comply with the Schedule. This highlights the importance of understanding and adhering to the terms of the Development Rights Rider and the potential financial consequences of failing to do so.