What are 'Operating Assets' defined as for a 7 Brew store?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You must operate the Store according to our Brand Standards. Brand Standards may regulate, among other things, types, models, and brands of furniture, fixtures, signs, and equipment (including components of and required software licenses for the Computer System) required for the Store (collectively, "Operating Assets"); required, authorized, and unauthorized products and services for the Store; and designated and approved manufacturers, suppliers, and distributors of products and services. You must buy or lease all Operating Assets and other products and services for the Store only according to Brand Standards and, if we require, only from manufacturers, suppliers, or distributors we designate or approve (which may include or be limited to us, our affiliates, and/or other restricted sources) at the prices the suppliers choose to charge.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–32)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, Operating Assets are defined as the types, models, and brands of furniture, fixtures, signs, and equipment (including components of and required software licenses for the Computer System) required for the store. Franchisees must buy or lease all Operating Assets according to 7 Brew's Brand Standards. If required, franchisees must buy or lease Operating Assets only from manufacturers, suppliers, or distributors that 7 Brew designates or approves, which may include 7 Brew, its affiliates, and/or other restricted sources, at the prices the suppliers choose to charge.
This means that as a 7 Brew franchisee, you will have limited flexibility in choosing the specific items used to operate your store. 7 Brew maintains control over the brand's image and quality by specifying the Operating Assets, ensuring a consistent customer experience across all locations. This standardization can be beneficial in terms of operational efficiency and brand recognition.
However, it also means that you may not be able to source cheaper alternatives or use your preferred vendors for these items. The FDD indicates that 7 Brew and its affiliates may derive revenue from suppliers through various means, which may incentivize them to designate specific suppliers. While this arrangement aims to benefit the franchise system as a whole, it's important to recognize that 7 Brew and its affiliates may not always obtain the best pricing or most advantageous terms for franchisees.
Prospective franchisees should carefully consider the implications of these restrictions and the potential impact on their operating costs. It would be prudent to discuss the supplier approval process, pricing structures, and any potential conflicts of interest with 7 Brew before making a final investment decision. Understanding the specific criteria for Operating Assets and the approved supplier list will be crucial for managing expenses and maintaining profitability.