What are the requirements for a 7 Brew franchisee regarding gift/loyalty/stored-value card programs?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You must participate in, and comply with the requirements of, our gift/loyalty/stored-value card and other customer loyalty programs.
We may draft from your bank account all monies paid to you for gift/loyalty/stored-value cards and similar customer loyalty initiatives and hold those monies until the gift/loyalty/stored-value cards and similar customer loyalty initiatives are redeemed at your Store (or another 7 BREW Store).
However, we may keep any prepaid amounts that are not used by customers to the extent allowed by Law.
We have no obligation to reimburse you for any costs you incur in participating in our gift/loyalty/stored-value card and other customer loyalty programs, including for providing products or services to customers without compensation;
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, franchisees must participate in and comply with the requirements of 7 Brew's gift, loyalty, and stored-value card programs, as well as other customer loyalty programs. 7 Brew may deduct from the franchisee's bank account all monies paid to the franchisee for these cards and initiatives. These funds will be held until the cards are redeemed at the franchisee's store or another 7 Brew location. However, 7 Brew may retain any prepaid amounts that customers do not use, to the extent permitted by law.
7 Brew is not obligated to reimburse franchisees for any costs incurred while participating in these programs. This includes providing products or services to customers without direct compensation when they redeem rewards or use stored value cards. This means franchisees need to factor in the potential costs of these programs, such as the cost of goods given away as part of a loyalty program, without expecting reimbursement from 7 Brew.
This policy is fairly common in the franchise industry, where franchisors often implement loyalty programs to drive customer retention and brand consistency. However, the financial responsibility for unredeemed cards and the lack of reimbursement for associated costs are important considerations for prospective 7 Brew franchisees. Franchisees should carefully evaluate the potential financial impact of these programs on their store's profitability and cash flow.