What is the definition of 'Gross Profit' for a 7 Brew franchise, and how is it calculated?

According to 7 Brew's 2025 Franchise Disclosure Document, Gross Profit is defined as Net Sales less Costs of Goods Sold. This is a standard financial metric used to assess the profitability of a business before considering operating expenses, interest, and taxes.

Net Sales, as defined in the FDD, are Gross Sales less discounts other than valid coupon credits and employee discounts. Gross Sales includes revenue from beverages, food, merchandise, and services, minus sales taxes, coupon credits, employee discounts (up to 2% of Gross Sales), and revenue from the sale of gift cards (though revenue from purchases made with those cards does count towards Gross Sales).

Costs of Goods Sold (COGS) includes the direct costs associated with the products 7 Brew sells, such as coffee, dairy and alternative milks, sauces, syrups, teas, mixes, canned beverages, cups, straws, and supplies for sales. Understanding these components is crucial for a franchisee to accurately project and manage their store's financial performance. The median Gross Profit margin for franchised stores in 2024 was 70.92%.

Prospective franchisees should carefully consider these definitions and how they impact their potential profitability. Accurately tracking and managing Net Sales and Costs of Goods Sold will be essential for maximizing Gross Profit and overall financial success with a 7 Brew franchise.