Who owns the amounts 7 Brew receives from suppliers based on franchisee purchases?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We and/or our affiliates have the right to derive revenue—in the form of promotional allowances, volume discounts, commissions, other discounts, performance payments, signing bonuses, rebates, marketing and advertising allowances, free products, and other economic benefits and payments—from suppliers that we designate, approve, or recommend for some or all 7 BREW Stores on account of those suppliers' prospective or actual dealings with your Store and other 7 BREW Stores (including affiliate-owned 7 BREW Stores). That revenue may or may not be related to services that we and our affiliates perform. All amounts received from suppliers, whether or not based on your or other franchisees' purchases from those suppliers, will be our and our affiliates' exclusive property, which we and our affiliates have the right to retain and use without restriction for any purposes we and our affiliates deem appropriate. Any products or services that we or our affiliates sell you directly may be sold to you at prices exceeding our and their costs.
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, 7 Brew and its affiliates retain exclusive ownership of all revenue received from suppliers, regardless of whether these amounts are based on franchisee purchases. This revenue can take various forms, including promotional allowances, volume discounts, commissions, performance payments, signing bonuses, rebates, and marketing or advertising allowances.
This means that 7 Brew has the right to use these funds without any restrictions and for any purpose they deem appropriate. The FDD clarifies that these revenues are the exclusive property of 7 Brew and its affiliates. This arrangement is common in franchising, where franchisors often negotiate with suppliers on behalf of the entire system and retain a portion of the resulting benefits.
For a prospective franchisee, this indicates that while they are required to purchase from approved suppliers, any financial benefits or incentives those suppliers provide accrue solely to 7 Brew. Franchisees do not have a claim on these supplier revenues. This arrangement allows 7 Brew to potentially offset other costs or invest in system-wide improvements, but it also means franchisees do not directly benefit from the purchasing power of the collective 7 Brew network.