How are 7 Brew brand fund contributions and costs presented in the Statements of Operations?

According to 7 Brew's 2025 Franchise Disclosure Document, brand fund contributions and costs are presented gross in the Statements of Operations. This means that the total amount of contributions received and the total costs incurred are shown separately, without netting them against each other. 7 Brew states that it is considered the principal in these arrangements. The purpose of the brand fund is to enhance and protect the 7 Brew brand through advertising, marketing, research and development, public relations, social media management, customer relationship management, technology programs, and other activities.

Expenses related to these brand fund activities are included in the 'Other operating expenses' line item on the Statements of Operations. This provides transparency into how the brand fund is being utilized to support the 7 Brew system.

For a prospective franchisee, this gross presentation offers a clearer picture of the financial activity within the brand fund. They can see the total contributions from franchisees and the total expenditures on marketing and related activities. This can help franchisees assess the value and effectiveness of the brand fund in supporting their business. Franchisees may want to request a detailed breakdown of 'Other operating expenses' to understand exactly how the brand fund monies are being spent.