What was the amount of 7 Brew's deferred franchise fees at December 26, 2021?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
or December 25, 2022. There was no gift card liability at December 26, 2021.
Deferred Franchise Fees
Deferred franchise fees consist primarily of initial franchise fees received for which the Company has not substantially performed or satisfied all material services or cond
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the company had $12.9 million in deferred franchise fees as of December 26, 2021. Deferred franchise fees primarily consist of initial franchise fees that 7 Brew has received but for which it has not yet substantially performed all the services or satisfied all the conditions related to the sale of the franchise.
In simpler terms, this means that 7 Brew collected $12.9 million in initial franchise fees from franchisees but had not yet completed all of its obligations to those franchisees as of that date. These obligations typically include services like site selection assistance, training, and system implementation.
For a prospective franchisee, this deferred revenue represents a future obligation for 7 Brew. It indicates that 7 Brew is holding funds related to services they are contractually obligated to provide. This is a common accounting practice in franchising, as initial franchise fees are typically recognized as revenue over the life of the franchise agreement (in 7 Brew's case, generally 15 years), as the services are rendered over that period.