Blackstone Brews Success: Investment Boosts 7 Brew Coffee's Drive-Thru Expansion
New York-based asset manager Blackstone has invested in 7 Brew Coffee to fuel the drive-thru beverage company's expansion across the United States.
Terms of the deal were not disclosed.
Since 7 Brew opened its inaugural coffee stand in Rogers, Arkansas, in 2017, its mission has been clear: to craft custom drinks — over 20,000 combinations — while spreading happiness with each sip. Today, 7 Brew is a top franchisor, earning the title of QSR Magazine's Breakout Brand of 2023.
The investment by Blackstone Growth and affiliated funds will accelerate 7 Brew's expansion in collaboration with its franchise partners.
"This investment illustrates Blackstone's thematic focus on investing in strong franchise businesses alongside highly skilled operators," said Brian Cornyn of Blackstone.
It's not the first time Blackstone has invested in a franchise. In 2021, it invested in the fitness franchise Snap Fitness to support the company's growth plans and digital transformation, according to franchise news platform 1851 Franchise.
Franchising is a business model where a franchisor grants a franchisee the right to use their brand name, business model and support systems in exchange for a fee or royalty. In 2023, it was estimated that 805,500 U.S. franchise establishments would generate an economic output of about $860 billion, according to Statista. An estimated 8.7 million people work at franchises.
Arkansas-based 7 Brew recently surpassed 200 locations in 22 states. The stores are about 500 square feet with a total land size of about 15,000 square feet to accommodate two drive-thru lanes. Each store generates about $2.35 million in annual sales. Each store costs between $900,000 and $1.8 million to build, but the company is working on reaching $1.3 million or less.
"We are on a strong growth trajectory thanks to our outstanding team, the Brew Crew, and are so excited to have found in Blackstone a true partner who understands our culture and whose global reach and incredible resources will enable us to reach this next stage of growth," 7 Brew CEO John Davidson said. "Blackstone brings everything we are looking for to help serve our customers and support our franchisees — industry and market knowledge, franchisee relationships, data science, operations and real estate expertise."
About 2,000 development agreements for 7 Brew stands had been reached by the end of 2022.
"The opportunity is just massive, and anything is possible," 7 Brew CFO Nicole Miller Regan told Nation's Restaurant News in September. "The whole idea of what we're doing translates across the globe. We want to break sales and development records. The most important thing is we make sure the leadership structure amplifies so that as the business evolves, we grow it safely to protect the human capital investments we've made. They're everything."
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