Does the Item 7 table provide an estimate for rent and security deposit costs for 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Development Fee and First Initial Franchise Fee (minimum 5-Store commitment) (Note 1) | $75,000 | Lump sum | Upon signing first Franchise Agreement and DRR | Us |
| Rent and Security Deposit (Note 2) | $5,000 to $20,000 | Monthly | As incurred | Third Party (your landlord) |
| Building / Build-Out Costs (Note 2) | $318,500 to $600,000 | Lump sum or financed | As incurred | Our Affiliate or Third Parties (your landlord and/or contractor) |
| Site Development Costs (Note 2) | $200,000 to $800,000 | Lump sum or financed | As incurred | Third Parties (your landlord and/or contractor) |
| Architectural and Engineering Fees | $10,000 to $60,000 | Lump sum or financed | As incurred | Third Parties (your landlord and/or contractor) |
| Store Equipment, Fixtures, and Furniture (Note 3) | $185,000 to $250,000 | Lump sum or financed | As incurred | Approved Suppliers and Our Affiliate |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Item 7 table does include an estimated cost for rent and security deposit. The table estimates this cost to be between $5,000 and $20,000. This payment is typically made monthly to a third-party landlord as incurred. Note 2 further clarifies that this estimate covers one month's rent plus one month's security deposit. The FDD also estimates annual rent to be between $30,000 and $120,000.
It is important to note that real property costs can vary significantly based on geographic location, traffic, property values, and demographics. For example, rent costs are likely to be higher on the West Coast and East Coast, as well as in major metropolitan areas like Chicago. The typical 7 Brew store requires a lot ranging from 8,000 to 50,000 square feet, with the modular building itself being 510 square feet. 7 Brew stores are typically located on an out-parcel to a shopping center with street exposure in an urban or downtown location with heavy population, preferably with highway exposure or proximity.
The FDD also states that commercial leases are typically "triple net" leases, which require the franchisee to pay rent, all taxes, insurance, maintenance, repairs, common-area-maintenance costs, merchants' association fees, and all other costs associated with the property. Franchisees might also have to pay percentage rent and make an initial payment into an escrow fund to cover estimated real estate taxes. Franchisees have the option to lease or buy the real estate on which the store will be located. However, the Item 7 table does not include potential real estate purchase costs.