For 7 Brew, how are the average and median Store-Level EBITDAR margins calculated?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Store-Level EBITDAR does not take into account any labor costs or other expenses excluded from the definitions of Total Labor Expense and Total Operating Expense in notes v and vi above and is before interest, taxes, depreciation, amortization, and rent expense.
The average and median Store-Level EBITDAR margins are the numbers resulting arithmetically from calculating the average and median performance, respectively, in all of the sales, profit, and expense line-items appearing in the Exhibit 2 statement.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 61–73)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the average and median Store-Level EBITDAR margins are calculated arithmetically. These figures represent the average and median performance across all sales, profit, and expense line items detailed in Exhibit 2 for Company Stores and Exhibit 6 for Franchised Stores.
Store-Level EBITDAR is a key metric for assessing a store's operational profitability. It is calculated before considering interest, taxes, depreciation, amortization, and rent expenses. Additionally, it does not account for certain labor costs or other expenses excluded from the definitions of Total Labor Expense and Total Operating Expense.
For a prospective 7 Brew franchisee, understanding how EBITDAR is calculated is crucial for evaluating the potential financial performance of a franchise. By examining the line items included in Exhibits 2 and 6, franchisees can gain insights into the specific factors that contribute to a store's profitability. This information can help franchisees make informed decisions about managing their expenses and maximizing their earnings.
It's important to note that the EBITDAR calculation excludes certain expenses, such as rent, which can vary significantly depending on location. Therefore, franchisees should carefully consider these additional expenses when assessing the overall profitability of a 7 Brew franchise.