7 Brew Coffee Franchise in 2024: Costs, Fee & FDD
Discover the fast-growing 7 Brew franchise—a unique drive-thru coffee experience blending speed, quality, and community. Explore the costs, potential earnings, and essential insights for potential investors in this dynamic and competitive market.
Table of Contents:
7 BREW is an up-and-coming drive-thru coffee franchise that has been gaining attention for its vibrant, high-energy approach to the coffee industry. Founded by Jax and Jen Schneider in 2017 in Rogers, Arkansas, 7 BREW was built on the philosophy of serving exceptional coffee with a smile, creating a fast and friendly customer experience. The brand has quickly carved out a niche for itself in the competitive coffee market, emphasizing not just the quality of its drinks but the atmosphere of its locations. The focus is on creating a sense of community and joy, setting it apart from the more traditional coffee chains.
The core products of 7 BREW include a variety of coffee beverages, from classic espressos and lattes to more adventurous flavored concoctions that appeal to a broad audience. They also offer an array of non-coffee drinks like teas, energy drinks, and smoothies, making it a versatile stop for customers of all preferences. The franchise’s emphasis on speed and convenience, combined with the high quality of its offerings, appeals mainly to busy professionals, commuters, and young adults looking for a quick pick-me-up. The cheerful and dynamic branding of 7 BREW also resonates with a younger, trend-conscious demographic.
Since its inception, 7 BREW has experienced rapid growth, expanding from its original Arkansas location to over 50 locations across multiple states in the U.S. The franchise is still in its early stages of nationwide expansion, but its momentum suggests a bright future. Each location typically serves hundreds of customers daily, with some of the busiest locations even exceeding that number. The brand’s success has sparked interest in further expansion, both in terms of new locations and additional markets.
For potential franchisees, 7 BREW offers a comprehensive support system, including thorough training programs for both new franchisees and their staff. The training covers everything from product preparation and customer service to operational management and marketing strategies. Additionally, the franchise provides ongoing support through a network of experienced professionals who assist with site selection, build-out, and launch, ensuring that each new location is set up for success. This robust support system, combined with the brand’s appealing concept, makes 7 BREW an attractive option for those looking to invest in the booming coffee and beverage market.
7 Brew Franchise Insights
- Since its founding in 2017, 7 BREW has grown to over 100 locations across multiple states, showing a strong trajectory of growth in the highly competitive coffee franchise market.
- Some of the busiest 7 BREW locations serve over 1,000 customers daily, highlighting the brand’s popularity and efficiency in high-traffic areas.
- While known for its coffee, 7 BREW also offers a wide range of non-coffee beverages, including teas, smoothies, and energy drinks, catering to a broad customer base.
- The brand’s emphasis on creating a joyful, community-oriented experience has led to strong customer loyalty, particularly among young adults and busy professionals.
7 Brew Franchise Key indicators
Unit Growth YOY (%)
571%
vs industry 1%
Total U.S. Franchised Units
161
3-Year Failure Rate
0%
vs industry 11%
Sales-to-Investment ratio
1.5:1
How much does it cost to open a 7 Brew franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a 7 Brew franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a 7 Brew franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a 7 Brew below from the most recent Item 7 below:
Type of Expenditure
Minimum Investment
Maximum Investment
Development Fee and First Initial Franchise Fee (minimum 2-Store commitment)
$45,000
$45,000
Rent and Security Deposit
$5,000
$20,000
Building / Build-Out Costs
$318,500
$525,000
Site Development Costs
$229,000
$784,000
Architectural and Engineering Fees
$10,000
$45,000
Store Equipment, Fixtures, and Furniture
$135,000
$217,000
Signs
$25,000
$25,000
Point-of-Sale System
$15,000
$25,000
Opening Inventory, Supplies, and Uniforms
$27,000
$40,000
Business and Operating Permits
$2,500
$25,000
Initial Training Travel & Living Expenses
$25,000
$50,000
Utilities
$750
$3,000
Insurance
$2,550
$5,500
Marketing Start-Up Expense
$25,000
$50,000
Additional Funds—3 Months
$25,000
$75,000
Total Estimated Initial Investment
$890,300
$1,934,500
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a 7 Brew franchise, the required capital involves both the initial investment costs and financial requirements set by the franchise. Let’s take a closer look below:
- Initial Investment The total estimated initial investment for a 7 Brew franchise can range from approximately $890,000 to $1.93 million. This includes the franchise fee, equipment, build-out costs, and initial inventory. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Requirement 7 Brew typically requires franchisees to have a minimum of $100,000 in liquid assets. This ensures that the franchisee has the financial flexibility to cover unexpected expenses and maintain smooth operations during the startup phase.
- Net Worth Requirement The franchise also looks for a minimum net worth of around $500,000. This requirement helps to ensure that the franchisee has a strong financial foundation and is capable of managing the business’s financial demands.
These estimates should give you a general idea, but it’s always best to contact 7 Brew directly for the most accurate and up-to-date financial requirements.
How much does a 7 Brew franchise owner make?
Calculating the salary of a 7 Brew franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a 7 Brew franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
7 Brew Revenue & Gross Sales
In 2023, 7 Brew franchises reported a median gross sales of $2,182,022, reflecting a decline from the previous year’s figure of $2,358,346. This decrease indicates some challenges in maintaining sales momentum, but it also presents an opportunity for new franchisees to innovate and drive growth in the coming years.
Which key factors impact the average revenue performance of 7 Brew franchisees?
The performance in 7 Brew’s U.S. franchisee median gross sales revenue could be attributed to several factors. One likely contributor is the increased competition within the drive-thru coffee market, with more brands entering the space and existing players expanding aggressively. Additionally, economic factors such as inflation and shifts in consumer spending habits may have impacted discretionary spending on specialty coffee beverages. Changes in operational costs, such as rising labor and ingredient expenses, could also have squeezed profit margins, leading to a decline in overall sales. Lastly, market saturation in certain regions might have limited growth potential, making it harder for individual locations to maintain previous sales levels.
7 Brew Franchise Operational Costs
When opening a 7 Brew franchise, it’s essential to be aware of the key ongoing operational costs that will impact your profitability and business sustainability. These costs include:
- Rent and Utilities The cost of leasing the location and covering utilities like electricity, water, and internet is a significant ongoing expense.
- Labor Costs Wages for staff, including baristas, managers, and any additional support personnel, form a substantial part of your monthly expenses.
- Inventory and Supplies Regular purchasing of coffee beans, syrups, milk, cups, lids, and other necessary supplies to maintain stock and meet customer demand.
- Marketing and Advertising Ongoing local marketing efforts, promotional materials, and contributions to national or regional advertising funds are essential to driving traffic.
- Maintenance and Equipment Costs for maintaining, repairing, and occasionally replacing equipment like coffee machines, blenders, and refrigeration units.
- Insurance Regular payments for business insurance, including liability, property, and workers’ compensation coverage.
These costs are crucial to factor into your budget to ensure the long-term financial health and success of your franchise.
7 Brew Franchise Fees
Owning a 7 Brew franchise involves specific ongoing fees that franchisees must pay to operate within the franchise system. Here are the key fees associated with running the franchise:
- Royalty Fee This fee is calculated based on the store’s weekly gross sales. If a store’s gross sales are less than $20,000, the royalty fee is 4.5% of weekly gross sales. For gross sales between $20,000 and $25,000, the fee increases to 5.5%. If the store’s weekly gross sales exceed $25,000, the royalty fee rises to 7%.
- Brand Fund Contributions Franchisees are required to contribute to the brand fund, which is typically 1% of the store’s weekly gross sales. This fee supports national advertising and brand promotion efforts.
- Additional Costs Franchisees may also incur additional costs, such as training fees, technology fees, and other expenses related to operational support provided by the franchisor.
These fees are crucial for covering the costs of brand support, marketing, and other operational assistance provided by the franchise system.
7 Brew Franchise Earnings
Based on the provided data, a 7 Brew franchise in 2023 saw median gross sales of $2,182,022. For owner-operators, this translated to estimated earnings of approximately $327,303, while semi-absentee owners earned a bit less.
However, at such high gross sales the earnings potential remains significant, making 7 Brew a noteworthy consideration for potential franchisees who are prepared to navigate a competitive and evolving market.
How to Open a 7 Brew Franchise
Becoming a 7 Brew franchisee involves a series of steps that start with an initial inquiry and culminate in the start of operations. Here’s an overview of the process:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Preliminary Interview After reviewing the inquiry, the 7 Brew franchise team conducts a preliminary interview. This is an opportunity for both parties to assess mutual compatibility and discuss the franchise opportunity in more detail.
- Application Submission If the preliminary interview goes well, the prospective franchisee is invited to submit a formal application. This application includes more detailed financial information and personal background checks.
- Review and Approval The 7 Brew franchise team reviews the application and conducts a thorough background check. If the applicant meets the qualifications, they are approved to move forward in the process.
- Discovery Day The prospective franchisee is invited to a Discovery Day at 7 Brew’s headquarters. This event allows them to meet the corporate team, learn more about the brand, and ask any remaining questions.
- Signing the Franchise Agreement If both parties are satisfied after Discovery Day, the franchisee signs the franchise agreement, officially becoming part of the 7 Brew family.
- Site Selection and Build-Out After the agreement is signed, the franchisee works with the 7 Brew team to select an appropriate location for the store. The franchisee also begins the build-out process, which includes design and construction according to 7 Brew’s standards.
- Training The franchisee and key staff members attend an extensive training program provided by 7 Brew. This training covers everything from daily operations to customer service and marketing strategies.
- Grand Opening Once the build-out is complete and the team is trained, the franchisee holds a grand opening event to launch the new 7 Brew location. The franchise team provides ongoing support to ensure a smooth start of operations.
Pros & Cons
Pros
Simplified Menu: The streamlined menu focuses on quality over quantity, making operations easier to manage and reducing waste.
Growing Market: The specialty coffee market is expanding, and 7 Brew’s focus on speed and customer service positions it well in this competitive industry.
Strong Brand Recognition: 7 Brew has a growing reputation for its unique drive-thru coffee experience, which can attract a loyal customer base and lead to consistent sales.
Cons
Potential for Seasonal Fluctuations: Sales could be subject to seasonal variations, especially in regions where drive-thru traffic decreases during colder months, impacting overall profitability.
Competition: The coffee market is competitive, with established brands like Starbucks and Dunkin’ dominating. Standing out may require extra effort in marketing and customer service.
Operational Demands: Running a 7 Brew franchise, particularly in a drive-thru format, requires efficient management and staff to maintain the quick service the brand is known for.
