Is the 7 Brew Brand Fund accounted for separately from the franchisor's other funds?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We will account for the Brand Fund separately from our other funds (although we need not keep Brand Fund contributions in a separate bank account) and will not use the Brand Fund for any of our general operating expenses. However, the Brand Fund may reimburse us and our affiliates for the reasonable salaries and benefits of personnel who manage and administer, or otherwise provide assistance or services to, the Brand Fund; the Brand Fund's administrative costs; travel-related expenses of personnel while they are on Brand Fund business; meeting costs; overhead relating to Brand Fund business; and other expenses we and our affiliates incur administering or directing the Brand Fund and its programs, including conducting market research, preparing Marketing Materials, collecting and accounting for Brand Fund contributions, paying taxes due on Brand Fund contributions we receive; and any other costs or expenses we incur operating or as a consequence of the Fund. We will not use the Brand Fund specifically to develop materials and programs to solicit franchisees. However, media, materials, and programs prepared using Brand Fund contributions may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. Of the Brand Fund's 2024 expenditures, approximately 35% was spent on new Store opening support and franchisee training, approximately 40% was spent on marketing-related activities (split among ad production media (8%), creative promotions (7%), and purchased media (25%), 20% was spent on salaries and benefits of personnel who manage and administer the Brand Fund, and approximately 5% was spent on technology to support marketing initiatives and analysis.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 34–45)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Brand Fund will be accounted for separately from 7 Brew's other funds. However, 7 Brew does not need to keep Brand Fund contributions in a separate bank account. 7 Brew will not use the Brand Fund for any of its general operating expenses.
The Brand Fund may reimburse 7 Brew and its affiliates for reasonable salaries and benefits of personnel who manage and administer the fund, the Brand Fund's administrative costs, travel-related expenses of personnel on Brand Fund business, meeting costs, overhead relating to Brand Fund business, and other expenses incurred administering or directing the Brand Fund and its programs. These expenses include conducting market research, preparing Marketing Materials, collecting and accounting for Brand Fund contributions, and paying taxes due on Brand Fund contributions received.
In 2024, approximately 35% of the Brand Fund's expenditures were allocated to new store opening support and franchisee training. Around 40% was spent on marketing-related activities, divided among ad production media (8%), creative promotions (7%), and purchased media (25%). Additionally, 20% of the expenditures covered salaries and benefits for personnel managing the Brand Fund, and approximately 5% was invested in technology to support marketing initiatives and analysis.