What are all the fees that a 7 Brew franchisee might incur, combining information from Item 5 and Item 6?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
Item 5 INITIAL FEES
Franchise Agreement
You must pay us a $35,000 initial franchise fee in a lump sum when you sign the Franchise Agreement for your first 7 BREW Store (this initial franchise fee is part of the development fee described below). The initial franchise fee for the 2nd and each subsequent 7 BREW Store you develop under a Development Rights Rider to the Franchise Agreement is $25,000. That payment is due within 5 days after the date on which you open the 7 BREW Store for business. The initial franchise fee is not refundable under any circumstances.
If you purchase an existing Store from a franchisee, you will not pay an initial franchise fee. Instead, we have the right to receive a transfer fee from you or the selling franchisee (depending on your arrangement). That payment is not refundable.
We have the right (but no obligation) to send an "opening team" to the Store (involving the number of people we determine) to support the Store during its opening phase and to help you train your supervisory employees on our philosophy and Brand Standards (but not matters relating to labor relations and employment practices). The Brand Fund currently will pay the wages and travel-related expenses of any opening team we choose to send. However, if in our opinion you and/or the Store needs, or if you request (and we agree to provide), special guidance, assistance, or training that is in addition to any support we choose to provide (in other words, you ask us to stay longer than we had planned to stay), you must pay our personnel's daily charges (including wages) and travel-related expenses. This payment is not refundable. [Item 6: OTHER FEES]
Notes:
Except as noted above and except for certain product and service purchases, all fees are imposed and collected by and payable to us.
Except as noted above, we and our affiliates do not impose any fees or payments on, or collect any fees or payments from, you on a third party's behalf.
No fee is refundable.
While all fees are generally uniformly imposed, we previously provided a Royalty concession to certain franchisees and their affiliates committing to develop 10 or more 7 BREW Stores by increasing the Gross Sales level at which they must pay the higher percentage Royalty Fee.
We might in the future grant economic concessions to certain franchisees depending on the size of their proposed multiunit development and other business considerations.
We have the right to increase any fixed fee, fixed payment, or fixed amount (i.e., not stated as a percentage) under the Franchise Agreement based on changes in the Index (defined below) ("Annual Increase").
An Annual Increase may occur only once per calendar year and may not exceed the corresponding cumulative increase in the Index since the Franchise Agreement's effective date or, as the case may be, since the date on which the last Annual Increase became effective for the particular fixed fee, payment, or amount being increased.
Any and all Annual Increases will be made during the same month during each calendar year. "Index" refers to the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S.
City Average, All Items (1982 – 1984 = 100), not seasonally adjusted, as published by the United States Department of Labor, Bureau of Labor Statistics, or in a successor index.
We also have the right—if any fixed fee, payment, or amount due from you under the Franchise Agreement encompasses any third-party charges we collect from you on a pass-through basis (i.e., for ultimate payment to the third party)—to increase the fixed fee, payment, or amount beyond the Annual Increase to reflect increases in the third party's charges to us (we do not expect these increases in the third party's charges to be on account of benefits we receive from the third party).
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]
Advertising and Marketing Programs
Brand Fund
We have established the Brand Fund to which you and other franchisees must contribute the amounts we periodically specify, not to exceed 2% of your Store's weekly Gross Sales. We currently require you and other franchisees to contribute the full 2%. 7 BREW Stores that we and our affiliates own will contribute to the Brand Fund on the same percentage basis as franchisees.
[Item 22: CONTRACTS]
5. Fees
A. Initial Franchise Fee
If this Agreement is for your first 7 BREW Store, you must pay us a Thirty-Five Thousand Dollar ($35,000) initial franchise fee (the "Initial Franchise Fee") when you sign this Agreement. However, if this Agreement is for your second or subsequent 7 BREW Store, you must pay us a Twenty-Five Thousand Dollar ($25,000) Initial Franchise Fee within five (5) days after the date on which you open the Store for business. The Initial Franchise Fee is not refundable under any circumstances.
B. Royalty
You agree to pay us, on or before Friday of each calendar week (the "Payment Day"), a royalty ("Royalty") equal to:
- (i) four and one-half percent (4.5%) of the Store's Gross Sales during the preceding calendar week if the Store's Gross Sales during such preceding calendar week were less than Twenty-Thousand Dollars ($20,000);
- (ii) five and one-half percent (5.5%) of the Store's Gross Sales during the preceding calendar week if the Store's Gross Sales during such preceding calendar week were between Twenty-Thousand Dollars ($20,000) and Twenty-Five Thousand Dollars ($25,000); and
- (iii) seven percent (7%) of the Store's Gross Sales during the preceding calendar week if the Store's Gross Sales during such preceding calendar week were more than Twenty-Five Thousand Dollars ($25,000).
[Item 12: TERRITORY]
Item 12 TERRITORY
Franchise Agreement
Conditions for relocation approval are (1) the new site is acceptable to us, (2) you pay us a $5,000 relocation fee, (3) you reimburse any costs we incur during the relocation process, (4) you confirm that your original Franchise Agreement remains in effect and governs the Store's operation at the new site with no change in the franchise term, (5) you sign a general release, in a form satisfactory to us, of any and all claims against us and our owners, affiliates, officers, directors, employees, and agents, (6) you continue operating the Store at its original site until we authorize its closure, and (7) you de-brand and de-identify the Store's former premises within the timeframe we specify and at your own expense so it no longer is associated in any manner (in our opinion) with our system and the Marks.
What This Means (2025 FDD)
According to the 2025 FDD, a 7 Brew franchisee will encounter several fees. The initial franchise fee for the first store is $35,000, payable when signing the Franchise Agreement. For the second and subsequent stores developed under a Development Rights Rider, the initial franchise fee is $25,000, due within 5 days of opening the store. These fees are non-refundable. If a franchisee purchases an existing store, they may have to pay a transfer fee to 7 Brew, the amount of which is not specified in the provided documentation.
Franchisees must also pay a royalty fee, which is calculated weekly based on the store's gross sales. The royalty ranges from 4.5% to 7% depending on the gross sales for the preceding calendar week. Specifically, it is 4.5% if gross sales are less than $20,000, 5.5% if sales are between $20,000 and $25,000, and 7% if sales exceed $25,000. Additionally, franchisees contribute to the Brand Fund, which cannot exceed 2% of the store's weekly gross sales; currently, the full 2% is required.
Other potential fees include daily charges and travel-related expenses for special guidance, assistance, or training requested by the franchisee beyond the initial opening support provided by 7 Brew. A relocation fee of $5,000 is required if a franchisee relocates their store, along with reimbursement for any costs 7 Brew incurs during the relocation process. 7 Brew also retains the right to increase fixed fees based on changes in the Consumer Price Index, and may increase fees to reflect increases in third-party charges that are passed on to the franchisee.