If you fail your first attempt at the Series 7 exam, your sponsor can submit an amendment to reopen a window in which you can write the exam again. This window will not open until 30 days since your last exam attempt has transpired. At this point, your window will be open for 90 days.
There is no requirement for a sponsor firm to terminate your employment should you fail. However, every time you rewrite the exam, you must pay the required $200 registration fee. So your employer they may require you to reimburse the fees paid to write the exam.
After three failed attempts, you must wait six months before you can re-write the exam for the fourth time. The six-month waiting period is appropriate since by that point you would have paid a total of approximately $600, and the cumulative expense by the fourth time would be $800. The six-month requirement is intended to provide a window in which an individual can ensure he or she is prepared for the fourth exam attempt. This process will then continue indefinately, as there is no limit as to the number of times you can attempt the series 7 exam.