What is included in the 'Total Labor Expense' calculation for a 7 Brew franchise, and what is excluded?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Profit means Net Sales less Costs of Goods Sold.
- v. "Total Labor Expense" is defined as actual Store-level payroll, including the Store's general manager and benefits, payroll taxes, and bonus expense.
It does not include any area manager salary or incentives.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 61–73)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the "Total Labor Expense" for both franchised and company-owned stores includes specific store-level payroll costs. This encompasses the actual payroll for employees working at the store, including the store's general manager, along with any employee benefits, payroll taxes, and bonus expenses.
However, the "Total Labor Expense" calculation for 7 Brew specifically excludes any salary or incentives paid to area managers. This distinction is important for prospective franchisees as it clarifies which labor-related costs are considered when evaluating the financial performance of a single 7 Brew store.
Understanding what is included and excluded from the "Total Labor Expense" is crucial for franchisees to accurately assess their operating costs and profitability. By excluding area manager expenses, 7 Brew provides a clearer picture of the direct labor costs associated with running an individual store, allowing franchisees to better manage their store-level finances.