What is the 'Index' used by 7 Brew to calculate the Annual Increase of fixed fees?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to increase any fixed fee, fixed payment, or fixed amount (i.e., not stated as a percentage) under the Franchise Agreement based on changes in the Index (defined below) ("Annual Increase").
An Annual Increase may occur only once per calendar year and may not exceed the corresponding cumulative increase in the Index since the Franchise Agreement's 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.
We also have the right—if any fixed fee, payment, or amount due from you under the Franchise Agreement encompasses any third-party charges we collect from you on a pass-through basis (i.e., for ultimate payment to the third party)—to increase the fixed fee, payment, or amount beyond the Annual Increase to reflect increases in the third party's charges to us (we do not expect these increases in the third party's charges to be on account of benefits we receive from the third party).
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the "Index" used to calculate the Annual Increase of fixed fees is 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. This index is a widely recognized measure of inflation in the United States.
7 Brew has the right to increase any fixed fee, fixed payment, or fixed amount (not stated as a percentage) under the Franchise Agreement based on changes in this Index. This is termed an "Annual Increase." The Annual Increase can occur only once per calendar year. The increase is capped at the cumulative increase in the Index since the Franchise Agreement's effective date, or since the date the last Annual Increase became effective for the specific fee, payment, or amount being increased.
All Annual Increases will be made during the same month each calendar year. 7 Brew also retains the right to increase fixed fees, payments, or amounts beyond the Annual Increase to reflect increases in third-party charges that 7 Brew collects from the franchisee on a pass-through basis. This condition applies if any fixed fee, payment, or amount due from the franchisee encompasses third-party charges that 7 Brew pays to the third party.