What is the amount of the initial, non-refundable franchise fee required by 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
cember 29, 2024, December 31, 2023, and December 25, 2022.
Revenue Recognition
Franchise Fees
The Company executes franchise agreements that set the terms of its arrangement with each franchisee. The standard franchise agreement requires the franchisee to pay initial, non-refundable fees of $35,000, and ro
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the initial franchise fee is $35,000. This fee is non-refundable and must be paid when the franchise agreement is executed.
7 Brew recognizes this $35,000 fee as revenue over the term of the franchise agreement, which is typically 15 years. The portion of the initial franchise fees that has not yet been recognized as revenue is recorded as deferred franchise fees on the balance sheets. This accounting practice reflects the fact that 7 Brew provides services to the franchisee over the life of the agreement, such as site selection, training, and ongoing support.
For a prospective franchisee, the $35,000 initial fee represents a significant upfront investment. Because it is non-refundable, the franchisee will not get this money back, even if they terminate the agreement early. It is important to note that while 7 Brew recognizes this fee as revenue over 15 years for accounting purposes, the franchisee pays the entire amount upfront.