What constitutes the Development Fee for a 7 Brew franchise development agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
develop, open, and operate Traditional 7 BREW Stores pursuant to this Rider. This Rider also does not give you (or your Approved Affiliates) any independent right to use the 7 BREW trademark or our other trademarks and commercial symbols. The right to use our trademarks and commercial symbols is granted only under a franchise agreement signed directly with us. This Rider only grants you potential development rights if you fully comply with its terms.
| 5. Development Fee. As consideration for the development rights we grant you under |
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| this Rider, you must pay us—when you sign this Rider—a total of Thousand Dollars |
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Development Fee is paid as consideration for the development rights granted to the franchisee under the Development Rights Rider. This fee compensates 7 Brew for reserving a specific territory for the franchisee, preventing others from establishing a franchise in the same area, with exceptions for Non-Traditional 7 Brew stores, as long as the franchisee complies with the Development Rights Rider. The Development Fee is fully earned by 7 Brew once the Development Rights Rider is signed by both parties.
The Development Fee is calculated by combining the initial franchise fee for the first store and an additional fee for each additional store the franchisee commits to developing. The initial franchise fee is $35,000, and an additional $10,000 is charged for each additional 7 Brew store the franchisee plans to construct, develop, and operate within the designated territory during the term of the Rider. For example, if a franchisee commits to opening three stores, the Development Fee would be $35,000 (initial franchise fee) + (2 * $10,000) = $55,000.
It is important to note that the Development Fee is non-refundable under any circumstances, even if the franchisee fails to comply with the development schedule and 7 Brew terminates the Development Rights Rider. This means that even if the franchisee does not open any additional stores, the Development Fee will not be returned. The Development Rights Rider will not be effective, and the franchisee will not have any development rights, until 7 Brew receives the Development Fee. This fee structure incentivizes franchisees to follow through with their development commitments and compensates 7 Brew for the exclusivity granted to the franchisee within the territory.