What are the exceptions to the $10,000 limit on required capital modifications for a 7 Brew franchise?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
eriod we request. However, except for:
- (i) changes in the computer system;
- (ii) changes in signage and logo (i.e., Store exterior graphics);
- (iii) certain changes in connection with a transfer;
- (iv) changes required by the Store's lease or applicable law; and
- (v) general Store upkeep, repair, and maintenance obligations,
for all of which the timing and amounts are not limited during the franchise term, we will not require you to make any capital modifications during any year of the franchise term the costs of which during that year exceed $10,000 (excluding taxes and delivery charges). You must incur these costs in order to comply with this obligation and our requirements (even if such expenditures cannot be amortized over the remaining franchise term). Within 30 days after receiving written notice from us, you must prepare plans according to our standards and specifications and, if we require, using architects and contractors we designate or approve, and then submit those plans to us for
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–32)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, there are specific exceptions to the $10,000 annual limit on required capital modifications. Generally, 7 Brew will not require franchisees to make capital modifications exceeding $10,000 in any given year during the franchise term, excluding taxes and delivery charges. This limit is designed to provide some predictability regarding potential reinvestment costs.
However, this $10,000 limit does not apply to certain required changes. These exceptions include changes to the computer system, alterations to signage and logos (specifically store exterior graphics), modifications required in connection with a transfer of the franchise, changes mandated by the store's lease or applicable laws, and general store upkeep, repair, and maintenance obligations. For these specific categories, 7 Brew franchisees may be required to spend amounts exceeding $10,000 in a single year, and the timing of these expenditures is not limited.
This means that a 7 Brew franchisee needs to be prepared for potentially significant, unbudgeted expenses related to these exceptions. For example, a major overhaul of the computer system or a complete signage replacement could each cost well over $10,000 in a single year. Franchisees must prepare plans for these changes according to 7 Brew's standards and specifications within 30 days of receiving written notice, potentially using designated or approved architects and contractors.