What index does 7 Brew use to determine the annual increase in fixed fees?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to increase any fixed fee, fixed payment, or fixed amount (i.e., not stated as a percentage) under this Agreement based on changes in the Index (defined below) ("Annual Increase"). An Annual Increase to such fees, payments, and amounts may occur only once during any calendar year and may not exceed the corresponding cumulative increase in the Index since the Effective Date or, as the case may be, since the date on which the last Annual Increase became effective for the particular fixed fee, payment, or amount being increased. Any and all Annual Increases will be made during the same month during each calendar year. "Index" refers to the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, All Items (1982–1984=100), not seasonally adjusted, as published by the United States Department of Labor, Bureau of Labor Statistics, or in a successor index. Notwithstanding this Section, if any fixed fee, payment, or amount due under this Agreement encompasses any thirdparty charges we collect from you on a pass-through basis (i.e., for ultimate payment to the third party), we also reserve the right to increase the fixed fee, fixed payment, or fixed amount beyond the Annual Increase to reflect increases in the third party's charges to us.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew may increase fixed fees annually based on the Consumer Price Index for All Urban Consumers (CPI-U). This index, referred to as "Index", is for the U.S. City Average, All Items (1982–1984=100), not seasonally adjusted, as published by the United States Department of Labor, Bureau of Labor Statistics, or in a successor index.
This means that 7 Brew can raise fixed fees, but the increase is capped by the cumulative increase in the CPI-U since the franchise agreement's effective date or the last annual increase. These adjustments can only occur once per calendar year, during the same month each year.
However, if any fixed fee includes pass-through third-party charges, 7 Brew reserves the right to increase that fee beyond the Annual Increase to reflect increases in the third party's charges to them. This protects 7 Brew from absorbing increased costs from vendors, ensuring these costs are passed on to the franchisee.