How is Gross Profit defined for 7 Brew franchise financial reporting?

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 accounting definition used to determine the profitability of a business before considering operating expenses, labor, and other costs.

Net Sales, as defined in the FDD, are Gross Sales less discounts other than valid coupon credits and employee discounts. Gross Sales includes all revenue from beverages, food, merchandise, and services, whether paid in cash or credit, minus applicable sales taxes, valid coupon credits and employee discounts up to 2% of Gross Sales, and revenue from the sale of gift and loyalty cards. However, revenue from customers using gift or loyalty cards for payment is included in Gross Sales.

Cost of Goods Sold (COGS) includes the carrying value of all inputs to goods sold, such as coffee, dairy and alternative milks, sauces, syrups, teas, mixes, canned beverages, cups and straws, and supplies for sales. Understanding these definitions is crucial for a prospective 7 Brew franchisee to accurately interpret the financial performance representations provided in Item 19 of the FDD and to manage their store's finances effectively.