What happens to unspent monies in the 7 Brew Brand Fund at the end of the fiscal year?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) The Brand Fund may spend in any fiscal year more or less than the total Brand Fund contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, invest any surplus for future use, and roll over unspent monies to the following year.
We may use new Brand Fund contributions to pay Brand Fund deficits incurred during previous years.
We will use all interest earned on Brand Fund contributions to pay costs before using the Brand Fund's other assets.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, any unspent funds in the Brand Fund can be rolled over to the following year. This means that 7 Brew has the option to save and accumulate funds for future use rather than being required to spend all contributions within the same fiscal year. Additionally, 7 Brew has the ability to invest any surplus funds for future use.
This provides 7 Brew with financial flexibility in managing the Brand Fund. They can strategically plan for larger marketing initiatives or unexpected expenses by carrying over unspent funds. The ability to borrow funds and pay reasonable interest allows 7 Brew to cover any deficits that may occur, ensuring consistent support for marketing and brand-related activities.
In the event that 7 Brew terminates the Brand Fund, they have the option to either spend the remaining balance on permitted programs and expenditures or distribute the unspent funds to existing franchisees, as well as themselves and their affiliates. The distribution would be proportional to their respective Brand Fund contributions during the 12 months preceding the termination. This ensures that franchisees receive a fair share of the remaining funds based on their contributions, should the Brand Fund be discontinued.