Under the 7 Brew Rider, what must I (and/or Approved Affiliates) do to maintain my rights?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
ctivities we (and our affiliates) desire within the Territory.
YOU ACKNOWLEDGE AND AGREE THAT TIME IS OF THE ESSENCE UNDER THIS RIDER, AND YOUR RIGHTS UNDER THIS RIDER ARE SUBJECT TO TERMINATION, AS PROVIDED IN THIS RIDER, IF YOU DO NOT COMPLY STRICTLY WITH THE DEVELOPMENT OBLIGATIONS PROVIDED IN THE SCHEDULE AND FAIL TO CURE SUCH NON-COMPLIANCE WITHIN NINETY (90) DAYS AFTER RECEIVING WRITTEN NOTICE FROM US. WE MAY ENFORCE THIS RIDER STRICTLY.
3. Development Obligations.
- (a) Approved Affiliates. To maintain your rights under this Rider, you (and/or Approved Affiliates) must by the deadlines specified in the Schedule construct, develop, and have open and operating within the Territory the agreed-upon minimum number of Traditional 7 BREW Stores. If your owners establish a new legal entity to operate one or more of the Traditional 7 BREW Stores to be developed pursuant to this Rider and that new legal entity's ownership is completely identical to your ownership, that legal entity automatically will be considered an "Approved Affiliate" without further action. However, if the new legal entity's ownership is not completely identical to your ownership, you first must seek our approval for that new entity to develop and operate the proposed Traditional 7 BREW Store as an Approved Affiliate. We may refuse any such request if you and/or your owners do not (a) own and control at least seventy-five percent (75%) of the new entity's ownership interests and (b) have the authority to exercise voting and management control of the Store proposed to be owned by the new entity.
- (b) Form of Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, to maintain your rights under the Development Rights Rider, you (and/or any Approved Affiliates) must construct, develop, and have open and operating the agreed-upon minimum number of Traditional 7 Brew stores within the Territory by the deadlines specified in the Schedule.
If you establish a new legal entity to operate one or more of the Traditional 7 Brew stores, that entity will automatically be considered an "Approved Affiliate" if its ownership is completely identical to your ownership. However, if the new legal entity's ownership is not completely identical, you must seek 7 Brew's approval for that new entity to develop and operate a store as an Approved Affiliate. 7 Brew may refuse this request if you and/or your owners do not own and control at least 75% of the new entity's ownership interests and have the authority to exercise voting and management control of the store.
You (and/or your Approved Affiliates) will operate each Traditional 7 Brew store under a separate franchise agreement with 7 Brew. You acknowledge that time is of the essence under this Rider, and your rights under this Rider are subject to termination if you do not strictly comply with the development obligations provided in the Schedule and fail to cure such non-compliance within 90 days after receiving written notice from 7 Brew. 7 Brew may enforce this Rider strictly.