Does 7 Brew owe franchisees fiduciary obligations regarding the Brand Fund?

According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew does not owe franchisees fiduciary obligations regarding the Brand Fund. The FDD explicitly states that the Brand Fund is not a trust and that 7 Brew does not have fiduciary duties to franchisees related to the fund's maintenance, direction, or administration. This means that 7 Brew has more latitude in how it manages the Brand Fund than if it were held to a fiduciary standard, which would require them to act in the best interest of the franchisees.

7 Brew maintains control over the Brand Fund's activities and directs all programs financed by the fund. This includes deciding how to prepare marketing materials, administer websites, and manage advertising programs. While 7 Brew aims to benefit all 7 Brew stores with these programs, the FDD clarifies that the company doesn't have to ensure that expenditures in any specific geographic area are proportional to the contributions from stores in that area. This means that some franchisees may contribute more to the fund than the direct benefits they receive in their specific market.

7 Brew will account for the Brand Fund separately from its other funds but is not required to keep Brand Fund contributions in a separate bank account. The company can use the Brand Fund to reimburse itself and its affiliates for various expenses related to managing the fund, such as salaries, administrative costs, travel, and overhead. 7 Brew will provide an annual, unaudited statement of Brand Fund collections and expenses to franchisees within 60 days after the fiscal year-end or upon reasonable request. While 7 Brew may choose to have the Brand Fund audited annually at the Brand Fund's expense, it is not obligated to do so.