7 Brew Franchise Cost, Profit, Failure Rate 2024

Drive-through businesses have been continuously growing ever since the COVID-19 pandemic. Companies doing business in the drive-through concept have grown way more than other businesses and 7 Brew is one of those brands that gradually expanded. If you are an entrepreneur thinking about owning a franchise, 7 Brew might seem like a good idea.

7 Brew Franchise

With growing reach and strong popularity, 7 Brew indeed looks like a lucrative franchise opportunity.

In this article, we will go through 7 Brew, its history, franchise system, what you can expect, costs, and all other details to help you get a broader understanding.


About 7 Brew And 7 Brew History

7-Brew is an American coffee drive-through franchise chain that was founded in 2016 with the hopes of delivering premium coffee shorter than its competitors. The company have been operating since 2016 and growing rapidly.

They were sold to Drink House Holdings in 2021, when they also started to franchise. They specialize in premium coffee and similar drinks, and all of their stores are drive-through.

Now, the company has hit over 100 outlets and continues to grow with its franchise program. They have been franchising non-stop since 2021, when the company was acquired. They have an exceptional training system to get the franchisee owners settled and succeed.


Franchise Model Table

Cost Or FeesAmount
Initial Investment      $887,300-$1.8 million (2-store commitment)
FranchiseYES
Franchising Since2021
Franchise-Fee$35,000
Royalty-Fee4.5%-7%
LiquidityN/A
Estimated Outlets100+

How Much Does It Cost To Open A 7 Brew Franchise?

To open a 7 Brew franchise, you must commit to at least two stores and invest enough for 2 stores. The expected average investment for  2 stores is between $887,300 and $1.8 million on average. This includes the $35,000 franchise fee and all the other related startup costs.

These numbers are just average numbers that the franchisor uses from previous franchisees. The real numbers might be outside of this average, depending on the number of outlets you open, their sizes, and locations.


Franchise Requirements of 7 Brew

There is no statement about what kind of requirement they are looking for in franchisees. This means that you do not need to possess a certain financial requirement, such as minimum net worth or liquidity. This could be enough if you have enough capital funds to make the necessary investment.

On the other hand, they are not specifically looking for franchisees experienced in the area or experienced in a managerial role. However, having these experiences might be a huge benefit in getting your application accepted.


7 Brew: Profit & Revenue

According to the company’s latest financial statements, they had a total revenue of $772,000 in fiscal year 2021. In the same year, their net revenue was $206,000.


Failure Rate Of 7 Brew Franchise

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020000
202101+1
2022124+23

For the Franchised outlets:

  • In 2020, the failure rate was (0)/0×100≈0.00%
  • In 2021, the growth rate was (1)/0×100≈Can’t be divided by 0
  • In 2022, the growth rate was (23)/1×100≈2300%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202078+1
2021813+5
20221316+3

For the Company-Owned outlets:

  • In 2020, the growth rate was (1)/7×100≈14.2%
  • In 2021, the growth rate was (5)/8×100≈62.5%
  • In 2022, the growth rate was (3)/13×100≈23.07%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202078+1
2021814+6
20221440+26

For Total outlets:

  • In 2020, the growth rate was (1)/7×100≈14.2%
  • In 2021, the growth rate was (6)/8×100≈75%
  • In 2022, the growth rate was (26)/14×100≈185.71%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets for 7 Brew grew from 2021 to 2022. On the other hand, for company-owned outlets, the growth rate of 7 Brew was lying in the range between 14.2% and 23.07% for the period from 2020-2022.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the 7 Brew franchise has expanded in the years 2020-2022 showing a total growth rate between 14.2% and 185.71%.


Payback Period Of 7 Brew

With a midpoint investment of $1,186,400 and an estimated 10% profit on the average net sales of $2,394,112, the yearly profit would be $239,411.2.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Midpoint Investment / Yearly Profit = $1,186,400 / $239,411.2= 4.9 years

Based on these figures, it will take approximately 5 years to pay back the initial investment for 7 Brew. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


7 Brew: Overall Sales

In their latest franchise disclosure document, we see that, on average, franchised stores made $2.3 million annually in 2022. This number is for all the franchised outlets that were open for the entire year in 2022.

The highest-earning franchised store was $3.1 million, and the lowest was $1.6 million in 2022.


Training and Support Of 7 Brew

Training and Support Of 7 Brew

7 Brew provides initial training for the store owners, store management, and the store’s employees. Each of these trainings are different and take different times to finish. There are 2 to 4 hours of classroom and 138 hours of on-the-job training.

Both take place in Arkansas, their headquarters. Store ownership people’s training is for 2 days, managers’ training is for 14 days, and the store’s employees are for 3 days.

The company also provides ongoing support before and after the store’s opening. They review the potential site for the franchised store, give template plans for the store’s construction, and identify all the necessary equipment to be used in the store.

There is also an opening team to support the opening of the store that helps with operations and marketing. They also provide additional training if or when necessary.


Terms of Agreement and Renewal

The initial term of the franchise agreement with 7 Brew is for 15 years. After the initial 15 years, a renewal is possible for 2 additional 5-year renewal terms. You must be in good standing with the franchisor to be able to get the renewal. 7 Brew must approve your renewal request.


Obligations and Restrictions Of 7 Brew

The franchisee is obligated to appoint a managing owner that is approved by the franchisor. This managing owner is responsible for communication between the franchisee and the franchisor and has authority over business decisions in the store.

This managing owner could be the franchisee or someone else. There must be at least 2 fully trained managers on-site managing the store.

The franchised store must offer products and services that 7 Brew periodically sets and specifies for their franchised stores. The store can’t also sell any products and services that 7 Brew doesn’t approve of.

The store must also be operated completely in line with the brand standards that are specified in the operations manual of the franchise disclosure document. This brand standard identifies all the things, such as types, models, and brands of furniture, equipment, signs, fixtures, and things in the store.


7 Brew: Financial Assistance

7 Brew doesn’t provide any kind of direct or indirect financial assistance. They do not guarantee any kind of financial note, lease, or obligation. It is under the franchisee’s obligation to find the financing.

Entrepreneurs considering a venture into the coffee franchise sector might explore options such as Dunkin’ DonutsBlue Bottle CoffeeDutch BrosAroma Joe’s, and Cosmc’s franchises.


7 Brew Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Scooter’s Coffee$40,0006%$797,000-$1.3 million
Dutch Bros Coffee$30,0004%$350,000-$450,000
7 Brew$35,0004.5%-7%$887,300-$1.8 million

Conclusion

7 Brew is a relatively new drive-through coffee chain concept. However, they took advantage of the growing market trend, grew to over 100 stores in a very short time, and started offering franchising. With good overall sales numbers per franchised outlet, lower entry points per store, and increasing business, 7 Brew definitely looks like a great opportunity.


FAQs

Who bought 7 Brew?

In March 2021, Drink House Holdings bought 7 Brew by acquiring a majority stake in the company. They had only 9 stores at the time, and they are still the owners of the company.

How many 7 Brew locations are there?

7 Brew recently surpassed 100 locations in the United States. This means that they have over 100 locations nationwide.

Where is the headquarters of 7 Brew?

The headquarters of 7 Brew is located in Fayetteville, AR.

Who founded 7 Brew?

7 Brew was founded by Ron Crume. It launched it in 2017.

Sources

https://www.franchimp.com/?page=pdf&f=123652_2023.pdf
https://www.worldcoffeeportal.com/Latest/News/2023/June/Arkansas-based-7-Brew-Coffee-surpasses-100-US-stor

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