What expenses are included in the 'Total Operating Expense' for 7 Brew, and what expenses are excluded?

According to 7 Brew's 2025 Franchise Disclosure Document, the "Total Operating Expense" includes a variety of expenses related to the day-to-day operation of a 7 Brew store. These expenses encompass equipment, supplies, cash-handling, credit-card processing, repairs, maintenance, third-party commissions and delivery fees, other outside services, insurance, and utilities. These are the costs a franchisee can expect to incur to keep the store running smoothly and efficiently.

However, the "Total Operating Expense" specifically excludes royalties and marketing expenses. Royalties are payments made to 7 Brew for the use of their brand and systems, while marketing expenses may be related to broader advertising initiatives or brand fund contributions. These exclusions provide a clearer picture of the direct operational costs of running the store, separate from franchise fees and marketing contributions.

For a prospective 7 Brew franchisee, understanding these inclusions and exclusions is crucial for accurate financial planning. By knowing exactly what is covered under "Total Operating Expenses," franchisees can better forecast their potential profitability and manage their budget effectively. This distinction allows franchisees to assess the core operational costs independently from royalty and marketing obligations, aiding in a more precise evaluation of the franchise's financial viability.