Franchising opportunities are showing up everywhere right now. One example cropping up recently is 7 Brew, often structured as a multi-location commitment within a specific region. On paper, the projected returns can look compelling. The question I always start with is not about returns. It is about whether this is actually a passive investment.
In most cases, it is not.
Why 7 Brew Is Structured in Regional Groups
Most modern franchise models, especially fast-growing brands like 7 Brew, are built around regional ownership rather than single locations. Instead of five independent operators running five stores, the franchisor prefers one operator running all five.
From a business standpoint, that structure makes a lot of sense. A single coffee shop is extremely fragile. Staffing is unpredictable, turnover is high, and operational issues are constant. Running one store means you have to overstaff just to survive. If someone does not show up, you are the backup.
With five 7 Brew locations, the math changes. You can centralize hiring, training, payroll, purchasing, and maintenance. Employees can rotate between stores. Supplies can be bought in bulk. Problems at one location can be absorbed by the system. That scale dramatically reduces operational risk.
But none of that makes the investment passive.
The Human Capital Reality of a 7 Brew Franchise
A five-store franchise means managing fifty or more employees. It means running HR, payroll, scheduling, training, maintenance, and vendor relationships. Even with franchisor support, someone is still responsible for the day-to-day operations.
A franchise only becomes passive when you install a strong operator who truly runs the business. That person handles staffing issues, maintenance problems, vendor calls, and emergencies. Without that role filled, those calls go to the owner.
If a machine breaks at one location, someone has to coordinate repairs. If staffing falls apart at another, someone has to fix it. Without an experienced operator in place, that someone is you.
That is why experience matters so much in franchising. Investors who already own multiple franchises often have systems, managers, and playbooks they can reuse. Adding another brand becomes incremental. For a first-time franchise investor, everything is being built from scratch.
When Scale Actually Creates Distance
There is a version of owning franchises that eventually becomes more passive. That typically happens after significant scale.
An operator runs five locations successfully, installs strong management, and steps back. Then they acquire another region. At ten locations, it may make sense to hire dedicated maintenance staff. At twenty, you start functioning more like a management company.
At that point, the investor is removed from daily operations. The tradeoff is concentration risk. Everything depends on one brand. You are betting not only on consumer demand but also on franchise fees, brand reputation, and long-term viability.
That can work. It is not diversified.
Portfolio Fit Matters More Than Projections
Another critical issue is portfolio concentration. In a recent scenario I heard, the 7 Brew investment represents around 20 percent of total invested assets.
If this is intended to be a side investment while you focus on another career, that level of concentration is hard to justify. A franchise demands attention. It requires time, energy, and decision-making. Treating it as passive while allocating a large portion of your net worth creates misalignment.
On the other hand, if this investment represents a deliberate shift, the analysis changes. If you have sufficient assets elsewhere to support your long-term goals, and you want to build and run a business, committing meaningful capital to 7 Brew can make sense.
At that point, you are not evaluating a passive investment. You are evaluating whether you want to be in the coffee business.
The Right Question to Ask
This decision should not start with projected returns. It should start with a more basic question.
Do you want to run a 7 Brew business?
If the answer is no, franchising is unlikely to deliver what you expect. If the answer is yes, then the next step is determining how much capital and how much of your time you are willing to commit.
Franchises can be successful. They can also be demanding, concentrated, and operationally intense. Understanding which version you are signing up for matters far more than the spreadsheet.
This post is adapted from a recent episode of the Scholar Wealth Podcast. For more perspective on franchising, private business ownership, and evaluating concentrated investments, listen to the full podcast episode here.