What is the maximum Management Fee that 7 Brew charges, and what expenses are included?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Type of Fee(1, 6) | Amount(2) | Due Date | Remarks |
| Management Fee | Up to 10% of Gross Sales, plus any out of-pocket expenses incurred in connection with Store's management | As incurred | Due if we assume Store's management in certain situations. |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, a franchisee may be subject to a Management Fee of up to 10% of Gross Sales. This fee also includes any out-of-pocket expenses incurred by 7 Brew in connection with the management of the store.
This Management Fee is only charged if 7 Brew assumes the store's management in certain situations, which are not defined in the provided documentation. It is important for a prospective franchisee to understand the specific circumstances under which 7 Brew might take over management and impose this fee.
The fact that the fee is calculated as a percentage of Gross Sales means the amount could vary significantly depending on the store's revenue. Additionally, the inclusion of 'out-of-pocket expenses' means the total cost could exceed 10% of Gross Sales, depending on the specific expenses incurred during the management period. A prospective franchisee should seek clarification on what types of expenses are included and how these are documented and charged.
Understanding the conditions that trigger the Management Fee and the types of expenses that could be charged is crucial for a prospective 7 Brew franchisee to assess the potential financial implications and risks associated with this fee.