What is the relationship between the initial franchise fee for 7 Brew in Item 5 and the potential for economic concessions mentioned in Item 6?

According to 7 Brew's 2025 Franchise Disclosure Document, the initial franchise fee and potential economic concessions are related, particularly for multi-unit developers. The standard initial franchise fee for the first 7 Brew store is $35,000, and $25,000 for each subsequent store developed under a Development Rights Rider. These fees are generally uniformly imposed; however, 7 Brew may grant economic concessions to franchisees, especially those committing to develop a large number of stores.

The FDD specifies that 7 Brew previously provided royalty concessions to certain franchisees and their affiliates who committed to developing 10 or more 7 Brew stores. This concession involved increasing the gross sales level at which they would be required to pay a higher percentage royalty fee. This indicates that 7 Brew is open to negotiating terms to incentivize multi-unit development.

Item 6 states, "We might in the future grant economic concessions to certain franchisees depending on the size of their proposed multiunit development and other business considerations." This suggests that the size of the development commitment is a key factor 7 Brew considers when deciding whether to offer economic concessions. These concessions are not guaranteed and are subject to 7 Brew's discretion based on various business factors. A prospective franchisee interested in multi-unit development should discuss potential economic concessions with 7 Brew, as these are assessed on a case-by-case basis.