Is 7 Brew required to keep Brand Fund contributions in a separate bank account?

According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew is not required to keep Brand Fund contributions in a separate bank account. While 7 Brew will account for the Brand Fund separately from its other funds, it is not obligated to maintain Brand Fund contributions in a segregated bank account. This means that 7 Brew has the discretion to manage the Brand Fund alongside its other financial resources, which is a common practice among franchisors.

This arrangement provides 7 Brew with flexibility in managing the Brand Fund, potentially allowing for more efficient allocation of resources and investment opportunities. However, it also means that the Brand Fund contributions are not legally protected as a separate trust, and franchisees do not have fiduciary rights related to the Brand Fund. 7 Brew is permitted to use the Brand Fund to cover various expenses, including salaries and benefits of personnel managing the fund, administrative costs, travel expenses, meeting costs, and other overhead related to Brand Fund business.

7 Brew will provide an annual, unaudited statement of Brand Fund collections and expenses to franchisees within sixty days after the fiscal year-end or upon reasonable request. 7 Brew also has the option, but not the obligation, to have the Brand Fund audited annually by a certified public accountant at the Brand Fund's expense. This provides some level of transparency, but franchisees should be aware that the statement is unaudited unless 7 Brew chooses to conduct an audit. Franchisees may want to inquire about the frequency and scope of audits to ensure proper oversight of the Brand Fund.