What might a franchisee have to pay in addition to rent under a commercial lease for 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
g in the table.
Your rent will likely be based on development costs and reflect a rate of return on the landlord's initial investment (as well as other factors). Commercial leases are typically "triple net" leases, requiring you to pay rent, all taxes, insurance, maintenance, repairs, common-area-maintenance costs, merchants' association fees, and all other costs associated with the property. Rent will likely exceed the landlord's cost of leasing or financing the purchase of the outlet. You might also have to pay percentage rent and make an initial payment into an escrow fund to cover estimated real estate taxes. The landlord will likely require a security deposit. Rent can range significantly depending on the market and site-specific factors described in this Note 2. The Item 7 table provides an estimate for one month's rent plus one month's security deposit. We currently estimate annual rent to be between $30,0
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, commercial leases are typically "triple net" leases, meaning that in addition to rent, the franchisee is responsible for several other costs associated with the property. These costs include all taxes, insurance, maintenance, repairs, common-area-maintenance costs, merchants' association fees, and all other costs associated with the property.
7 Brew franchisees might also have to pay percentage rent, which is a percentage of their sales, and make an initial payment into an escrow fund to cover estimated real estate taxes. The landlord will also likely require a security deposit. The FDD estimates annual rent to be between $30,000 and $120,000. The Item 7 table provides an estimate for one month's rent plus one month's security deposit, with the estimate for rent and security deposit ranging from $5,000 to $20,000.
Prospective 7 Brew franchisees should carefully consider these additional costs when evaluating potential locations and negotiating lease terms. These additional expenses can significantly impact the overall profitability of the franchise. Franchisees also have the option to buy the real estate on which the store will be located, but the Item 7 table does not include potential real estate purchase costs.