7 BREW

Can you provide historical detail on the 14 unit transfers in 2024—were these initiated by franchisees seeking to exit, or transfers to new owners approved by 7 Brew?

Given the royalty rate of 7.0% is above the typical 5.0-6.0% range for coffee franchises, how does this compare to competitor rates, and what additional value or services justify this higher rate?

The franchise has grown from 40 to 321 units in 3 years (100.2% annual growth rate). What factors are driving this exceptional growth, and is this growth rate sustainable?

With a 3-mile non-compete radius being below the typical 5-25 mile range, how is the franchisor protecting existing franchisees from company-owned locations or new franchisees opening nearby?

The average unit volume of $2.0+ million is significantly above typical for the category. Are these figures from all unit types (standalone, co-branded, kiosks), or do certain formats drive higher sales?

What is the actual investment cost to open a 7 Brew location, given the investment score of 47/100 is below typical? Are there hidden costs or variable expenses not reflected in the franchise fee?

The operating assets sourcing requirement allows only franchisor-designated or approved suppliers with no alternative sourcing. What specific products or equipment fall under this requirement, and how are prices determined?

Can you clarify the dispute resolution clause requiring binding arbitration with a class action waiver? Have any franchisees challenged this provision, and is there any scenario where litigation outside arbitration is permitted?

The personal guarantee clause covers all financial and non-monetary obligations. Can you define what constitutes 'non-monetary obligations,' and what happens if a franchisee cannot personally guarantee the agreement?

With a 15-year initial term (above typical 10 years) and total potential term of 25 years, what are the renewal requirements and fees? Are there performance benchmarks required to qualify for renewal?

How many of the 321 current units are company-owned versus franchisee-owned? This breakdown is important for understanding whether the financial performance data reflects franchisee earnings or includes higher-margin corporate locations.

Among the rapid unit expansion, what percentage of new units have opened in existing franchisee territories despite having 'protected' but non-exclusive territory? How are encroachment disputes being resolved?

The transfer fee of $10,000 equals the renewal fee. If a franchisee sells their unit, does the buyer pay both the transfer fee and a new franchise fee, or are they treated differently?

Given zero litigation in 3 years despite explosive growth to 321 units, are there formal alternative dispute resolution mechanisms franchisees use before escalating to arbitration?

What percentage of new unit growth is attributable to multi-unit franchisees versus single-unit operators? Are growth incentives driving expansion, and do they apply equally to all franchisees?

The franchise requires operating through franchisor-approved suppliers for pricing control. Provide specific examples of products/services subject to this requirement and typical cost variation across suppliers.

Has 7 Brew terminated any franchise agreements for underperformance, and if so, at what sales threshold or performance metric would termination be likely?

Regarding the 2-year, 3-mile non-compete: if a franchisee chooses not to renew after 15 years, can they open a competing coffee operation immediately, or does the 2-year restriction apply post-termination?