Does 7 Brew receive any compensation from ure Franchise, LLC based on franchisee purchases?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) We may periodically designate and approve Brand Standards, manufacturers, suppliers, and/or distributors for the Operating Assets, products, and services we periodically authorize 7 BREW Stores to use or sell. You must purchase or lease all Operating Assets, products, and services you use or sell at 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, certain of our affiliates, and/or other restricted sources). We and/or our affiliates may 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. That revenue may or may not be related to services 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 may retain and use without restriction
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 FDD, 7 Brew may receive revenue from designated suppliers based on franchisee purchases. 7 Brew has the right to designate and approve suppliers from whom franchisees must purchase operating assets, products, and services. 7 Brew and its affiliates may then derive revenue from these suppliers in various forms, including promotional allowances, volume discounts, commissions, performance payments, signing bonuses, rebates, and free products.
This revenue may or may not be related to services that 7 Brew and its affiliates perform for the suppliers. All amounts received from these suppliers, regardless of whether they are based on franchisee purchases, are the exclusive property of 7 Brew and its affiliates. They can retain and use these funds without any restrictions.
For a prospective franchisee, this means that 7 Brew has the potential to profit from the required supplier relationships, in addition to the initial franchise fee and ongoing royalties. While this arrangement is common in franchising, it's important for franchisees to understand that 7 Brew benefits financially from these relationships and is not obligated to ensure that franchisees directly benefit from these supplier payments or to account for the use of these funds.