7-Eleven is a brand known to all. It is a multichain franchise of retail convenience stores. What makes 7-eleven popular is its round-the-clock, 24 hours running business model with easy and quick checkouts. It is one of the most popular American franchisees, with 36,000 stores in 15 countries worldwide. The financial success of 7-eleven franchises determines the success of 7-eleven companies as a whole.
“Success of 7-eleven Franchisee = success of the parent company”
Cost and Investment to open a 7-Eleven Franchise
The cost of owning the franchisee and other investments are largely dependent on the location; however, one can expect to invest $1 – $1.25 million to get the business rolling. A minimum net worth of $150,000 is a must, along with liquid working capital from $50,000 – $150,000.
Here is a table to enable an easy understanding of all the costs and fees required to own a 7-eleven franchise. However, there may be additional costs and fees apart from the financial requirements that aren’t mentioned here.
|Liquid Capital||$50,000- $150,000|
|Franchise Fee||Up to $1,000,000|
|Total Investment||$37,200- $1,635,200|
Average Sales per Year
As of 2019, 7-Eleven banks in roughly $18.66 billion dollars, with an average franchise making a sale of $1.4 million per store in a year.
What makes 7-Eleven a profit-making business?
Here are a few reasons why 7-eleven franchises outperform their peers:
When it comes to retail convenience stores making a profit, it all comes down to their location. Being at a prime location allows good foot traffic flow with minimum to negligible competition. 7-eleven has successfully cracked the code of encouraging footfall as they are located on busy roads, public transportation centers, or around office buildings. All these locations allow consumers to go to 7-eleven for a quick break to grab a coffee on the go, quick, easy meal options that are ready to eat and grab utilities for the home to and fro when crossing the store. They are also located at facilities with parking spaces so that customers have the freedom to walk in and make a purchase. The kind of store is highly dependent on the area where you want to open the store.
The kind of products that 7-Eleven offers is a big factor in why consumers support their business. However, 7-eleven considers having different brands for different locations as per customer preference, and for that, the franchise owners must do their diligence and take a call.
Ready-to-eat and microwavable food is an absolute must-have for any 7-eleven store, as they are entirely focused on providing convenience at the drop of a hat! However, the focus shouldn’t be on snacks like cookies, chips, or biscuits but instead on heated items like hot dogs, sandwiches, tacos, and churros.
3. Product Priority:
America and Americans love fast food, due to which 7-eleven ends up in competition with brands like Taco Bell, Subway, and McDonald’s. Hence, choosing the product range and brands as per location and preference is a wiser decision.
Advantages of 7-Eleven
- The biggest advantage of the 7-Eleven franchise is that can you build new stores and also convert existing convenience stores into 7-eleven franchisees. Here are a few store or utility options that can be converted into 7-elevens:
- Convenience stores
- Liquor stores
- Gas Stations
- Service Bay Stations
- Another advantage attached to owning a 7-eleven franchise is that the parent company shares gross profit with the franchise owners. This serves as an added advantage since the overall profit ends up with the franchise owner.
- 7-Eleven also offers great incentives for potential owners who may want to start a new franchise. It is amongst the very few big brands that provide financial assistance, resulting in up to 65% assistance on the initial franchise fee for the budding entrepreneurs.
- 7-Eleven covers the costs and expenses for the building of the franchise store, equipment, utilities, and the taxes from renting the unit. This leaves room for the franchise owners to focus their attention on training and store operations.
- 7-Eleven provides umpteen amounts of business management support and resources, like payroll systems and assistance, marketing, bookkeeping, in-store help, and other services that owners might need to run a modern convenience store.
- 7-eleven is the most significant player with the maximum market share of any convenience store. With its huge brand recognition, the company’s dominance is on the rise, with expected annual sales to be more than $5 billion by 2030.
Disadvantages associated with 7-Eleven
Every franchise comes with its own set of challenges, and so is the case with 7-eleven. Here are a few of them:
- 7-Eleven must be operational 24 hours, all days of the week. While this is one of the things that make 7-eleven popular, at the same time, it is taxing for the franchise owners and the employees. It becomes necessary for franchise owners and employees to work till late at night and early in the morning.
- Given the current employment situation and environment, it is difficult to find employees willing to work in regular hours, let alone odd hours. Also, with odd working hours comes uncertainty and risk of dangerous activities, such as robbery, theft, or inappropriate drunk and destructive behavior.
- 7-Eleven has more of an employer-employee relationship instead of the usual franchisor and franchisee relationship since the owners have less over the management decisions. Since 7-Eleven pays for the utilities, supplies, and other necessities, the franchise owners do not have the freedom of choice over the selection of products.
How Much Money can you make owning a 7-eleven Franchise?
The 7-Eleven Store Agreement provides a guaranteed yearly gross income of $339,000 for Non-Fuel stores and $365,300 for Fuel stores. However, if a particular franchise is not making the given amount, 7-Eleven adjusts the monthly charge to cover this minimum gross income. In terms of profit, the franchise owners can draw $50,000 – $75,000 on an average for their salary.
7-eleven is determined to grow and allow its franchise owners to grow along. 7-eleven is not just any brand; it is America’s leading convenience retail store and top-rated amongst the people for their untimely needs.
Hungry at 2 am? No Worries! Run to your nearest 7-eleven and grab a bite!