Larry Wilson summed up how 7 Brew stands out from its giant coffee company competitors this way: “It’s Chick-fil-A marrying Starbucks and having a child.”
“It’s the kindness of Chick-fil-A and ordering and delivering directly to the vehicle. We’re physically bringing the coffee to you,” he continued. That service and what he said is tangible positive energy, coupled with an almost singular focus on beverages (the only food items are muffin tops), sold him on the model in a big way.
Wilson, also the founder of healthy fast-casual franchise CoreLife Eatery, and business partner Brandon Sebald plan to develop 212 locations of the drive-thru coffee concept under their Brew Crew LLC. The franchisees have 11 stores open in Arkansas, Missouri, Kentucky and Tennessee, and Sebald said they’re opening a new unit every two weeks on average, with the expectation of 26 total this year.
“I knew from day one as a customer it was special,” said Sebald, who lives in Fayetteville, Arkansas, where 7 Brew is based. “Then I got behind the curtain. You see the positive energy, which is hard to find today, that positive customer experience. The minute I stepped into a stand, I called Larry and said, you’ve gotta get in on this.”
7 Brew got its start in Rogers, Arkansas, in 2017 when co-founder Ron Crume opened his first location. A group of entrepreneurs formed parent company Brew Culture and bought 7 Brew in January 2020, said CEO John Davidson. In March 2021, the then-nine-unit company attracted a new majority owner in Drink House Holdings, an investment partnership created by Jimmy John Liautaud, the founder of the Jimmy John’s sandwich, and Lone Star Steak House founder Jamie Coulter.
Brandon Sebald is a former multi-unit Planet Fitness franchisee who with CoreLife Eatery founder Larry Wilson is developing 7 Brew across four states.
“We believe the drive-thru category is ripe for reinvention and rapid growth and we’re well positioned to disrupt and lead,” Liautaud said in a statement at the time.
Along with the investment came the launch of a franchise program, and 7 Brew has since grown to 56 stores open and is “closing in on 3,000 units sold,” said Davidson, whose experience spans real estate, technology and consumer sectors. The brisk expansion, he continued, comes as 7 Brew is signing agreements with “best-in-class franchisees” such as Wilson and Sebald, along with Tacala Companies and K-Mac Enterprises, which are among the largest Taco Bell operators in the United States. Davidson noted that franchise prowess will help 7 Brew hit its sizable development targets.
7 Brew’s modular, prefabricated 500-square-foot stores have double drive-thrus with canopies and employees who take and deliver every order to customers, infusing what Davidson called the “brew crew magic” into every interaction. “It’s like Norm at ‘Cheers,’” he said by way of explaining the service style and training of employees who get to know customers’ names and drink preferences. “Everybody wants to feel like they’re a regular.”
Employees in the stores, meanwhile, benefit from a culture that Davidson said is all about “creating the best job on the street.” That includes competitive pay, he noted, along with an atmosphere that promotes learning and development, “and that flows to the customer.” There’s a career pathway from “brewista” to shift lead to store manager and even franchise owner. That approach and willingness to invest in culture is helping 7 Brew open stores fully staffed and keep turnover below 30 percent, Davidson said.
It’s also what helped 7 Brew attract Nicole Miller Regan as its chief financial officer. Formerly the managing director and head of the consumer equity research practice at investment bank Piper Sandler, Regan came on board in December and said she’s “grateful to unlock 22 years of domain experience.”
After a career spent analyzing the role of human capital and how it impacts the success of restaurants, Regan said she was excited to see 7 Brew’s investments in those areas and “just decided to jump with both feet.”
7 Brew’s C-suite also includes COO and Director of Franchising Drew Ritger, who joined the company in 2021 from Zips Dry Cleaners, where he was CEO. Before Zips he spent 22 years at Sonic Drive-In.
With its modular, prefabricated units, 7 Brew franchisees can get stores open quickly, says Larry Wilson of Brew Crew LLC.
Drive-thru coffee franchises such as Scooter’s Coffee and Dutch Bros, each with hundreds of locations, are quickly expanding, while Starbucks and Dunkin’ continue to build more drive-thrus. Plenty of smaller brands are in the mix, too, including Ziggi’s, Aroma Joe’s and Ellianos, all with a small-format, kiosk model.
Wilson doesn’t consider 7 Brew a kiosk model, however, because that implies a transactional experience, not the relational one he said the brand provides. Employees connect “on every single interaction,” the franchisee said, which resonates across all age demographics, including younger consumers.
Wilson got feedback from two of those consumers before moving forward with his deal. His daughter and son, both in their early 20s and both involved in other franchises, his daughter in Buff City Soap and his son in Jersey Mike’s, visited 7 Brew “and validated that this was something young people wanted.” Employees, he added, are “coming to work at 5:30 in the morning and they’re having fun.”
Sebald, meanwhile, a former Planet Fitness franchisee who at one point had more than 90 locations, called the financial model “fabulous.” “We’ve been blowing out our pro forma, even in new markets,” he said.
Average gross sales at eight company locations were $2.39 million in 2021, according to Item 19 of the company’s franchise disclosure document. It lists a post-royalties and brand fund EBITDA, or cash flow, of 19.68 percent. That calculation uses a 7 percent royalty fee and 2 percent brand fund expense.
7 Brew has a two-store minimum commitment, with a total investment range of $790,800 to $1,582,000.