What is included in the 'Cost of Goods Sold' calculation for 7 Brew stores?

According to 7 Brew's 2025 Franchise Disclosure Document, the Cost of Goods Sold (COGS) for both company-owned and franchised locations includes specific expenses related to the inputs of the products sold. This encompasses the direct costs of ingredients and supplies necessary to create the beverages and other items offered at 7 Brew stores. Understanding what is included in COGS is crucial for franchisees as it directly impacts the calculation of gross profit and overall profitability.

Specifically, the Cost of Goods Sold calculation includes the carrying value of coffee, dairy and alternative milks, sauces, syrups, teas, mixes, canned beverages, cups, straws, and supplies for sales. These items represent the core components that make up 7 Brew's menu offerings. By carefully tracking and managing these costs, franchisees can better control their expenses and improve their bottom line.

The FDD provides average Cost of Goods Sold margins for both Company Stores and Franchised Stores. For example, the average Cost of Goods Sold margin for the 180 Measured Stores was 26.31% during Fiscal Year 2024. This benchmark can be used by prospective franchisees to evaluate their own performance and identify areas for potential cost savings. The median Cost of Goods Sold margin for the 180 Measured Stores during Fiscal Year 2024 was 26.38%.