How Much to Franchise 7-Eleven? (Cost + Profit)
Over 71,000 7-Eleven locations are operated, franchised, or licensed globally across 17 nations. Most people agree that 7-Eleven stores are the best place to go for quick meals, drinks, snacks, and, of course, Slurpees. If you’re trying to break into the convenience store industry. Here is a thorough analysis of the industry below and listed how much would be required to start a 7-Eleven franchise.
About 7-Eleven
Shopping has become increasingly convenient since 7-Eleven introduced convenient shopping to the world in 1927. More than 81,000 7-Eleven locations can be found in 18 countries, making it the largest retailer in the world as of today.
Speedway, Stripes, Laredo Taco Company, and Raise the Roost Chicken and Biscuits stores are just a few of the many banners and brands that 7-Eleven, Inc. now runs across the country.
Additionally, the company has a history of firsts, including self-serve soda machines, coffee-in to-go cups, and 24/7 hours, to mention a few. Not to mention legendary goods that have become a part of American society, like Slurpee and Big Gulp drinks.
The top-10 franchisor ranking that 7-Eleven continuously receives as the largest convenience retailer in the world is a true monument to our entrepreneurial spirit. 7-Eleven also had a key role in the development of the franchise model.
Although they have expanded tremendously over the years, they are still totally committed to developing to satisfy client needs. Currently, Seven & I Holdings Co. Ltd. owns a 100 percent stake in 7-Eleven, Inc.
Capital Required to Start a 7-Eleven Franchise
The primary financial requirements to launch a 7-Eleven franchise are listed below. Remember that these figures represent only the minimum financial requirements, and additional fees and expenditures may result.
Liquid Capital $50,000 – $150,000
Net Worth $150,000
Total Investment $37,200–$1,635,200
Franchise Fee $0 – $1,000,000
The cost of starting a 7-Eleven franchise can be further broken down below;
Initial Franchise Fee; $0-$1,000,000
Training Cost; $0-$9,000
Initial Down Payment for Opening Inventory; $20,000-$20,000
Additional Opening Inventory; $15,100-$44,500
Cash Register Fund; $500-$1,500
Store Supplies; $250-$2,500
Licenses and Permits; $8,000-$10,000
Real Estate and Equipment; Covered in “7-Eleven Charge”
Insurance $1,500 -$7,500
Grand Opening Fee; $8,000
Goodwill; Only applicable to incoming franchisees buying a current franchisee’s interest in a franchise.
Additional Funds During First 3 Months; $0-$60,000
Estimated Total; $1,163,000
Average Sales of 7-Eleven
In 2019, 7-Eleven reported revenues of about $18.66 billion, with $1.4 million in average annual sales per franchise.
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Things that Help a 7-Eleven Business Succeed
Location
It all depends on their location whenever it comes to retail convenience stores generating a profit. A good foot traffic flow with little to no rivalry is made possible by being in a desirable location.
Given that they are situated near office buildings, public transportation hubs, and busy roadways, 7-Eleven has figured out how to attract customers.
Customers can visit any of these 7-Eleven outlets for a brief break, a coffee on the go, quick, simple food alternatives that are ready to eat, and pick up utilities for the home while traversing the store.
Additionally, they are situated in buildings with parking lots to allow clients the option to stroll in and make a purchase. The type of store you wish to open is heavily influenced by the location.
Products
Consumer support for 7-Eleven is significantly influenced by the types of products it provides. However, 7-Eleven thinks about using various brands for various locations based on client choice, so the franchise owners must exercise due investigation and make a decision.
Every 7-Eleven store must have ready-to-eat and microwaveable meals because its entire business model revolves around convenience. The emphasis should instead be on cooked foods like hot dogs, sandwiches, tacos, and churros rather than on snacks like cookies, chips, or biscuits.
Product Priority
Because of the popularity of fast food among Americans, 7-Eleven is forced to compete with companies like Taco Bell, Subway, and McDonald’s.
Therefore, it is advisable to choose the product line and brands based on region and choice.
Requirements to be Accepted to Join 7-Eleven
Not all businesses that seek to join the 7-Eleven franchise are qualified. The criteria for stores that are already open are as follows:
- Your store must have been functioning at its current location for at least a year.
- Your store’s licenses must be current and free of recent violations.
- You would require a lease with a minimum term of 10 years and an estoppel certificate signed by the landlord if you were leasing your store.
- For them to review, you will need to keep a history of your verified sales and earnings.
- After the store is converted, 7-Eleven prefers that the selling space be at least 1800 square feet, although they will still take into consideration establishments that are at least 1400 square feet.
- They also require three service zones and a minimum of 600 amps.
- If the county or location allows, your store must be open twenty-four hours a day, every day.
- They prefer the 7-Eleven signage and stripe pattern décor on the store if you’re a fueling station.
Advantages of Opening a 7-Eleven Franchise
1. 7-Eleven has the ability to convert existing convenience stores in addition to building new ones for their franchises. The kinds of existing stores that can be transformed into 7-Eleven are as follows:
- Grocery stores.
- Gasoline pumps.
- Stations with service bays.
- Alcohol retailers.
- Confined convenience stores.
2. One significant distinction for 7-Eleven franchises is that 7-Eleven distributes its gross revenues to franchisees. Therefore, rather than being based on the net profit of sales, the royalty fee owners often pay is linked to lucrative sales.
Since the franchise owner ultimately receives the majority of the profits, this does offer a benefit.
3. For potential new franchise owners who wish to launch a new business, 7-Eleven also offers fantastic incentives. If not the only one, 7-Eleven is one of the few major brands that provide financial aid.
4. For the initial franchise cost, their internal financing program may provide up to 65% help. For those who are eligible, they will also provide further cash support.
This is extremely uncommon considering that the majority of firm brands with franchise programs only provide third-party possibilities.
5. In addition, 7-Eleven pays the taxes associated with leasing the space and paying for the real estate, as well as the costs of developing the franchise store. They also pay for the costs of utilities and equipment.
6. Additionally, 7-Eleven offers a wide range of company management resources and assistance, including payroll systems and support, bookkeeping, marketing, in-store assistance, and other services that proprietors require to operate a contemporary convenience store.
7. 7-Eleven is a well-known brand. With a market share of 2.19%, the franchise has the highest market dominance of any convenience shop. By 2030, the brand is anticipated to generate annual sales of more than $5 billion.
Disadvantages of Opening a 7-Eleven Franchise
1. Various difficulties are present in every franchise. One of the challenges faced by 7-Eleven is that, at least in the regions where they permit stores to operate, your franchise must be open around-the-clock, every day of the week.
In order to manage a 7-Eleven store, franchise owners must have workers who can work late into the night and early in the morning.
2. Although it might be challenging to find workers for regular hours, the midnight shift can be particularly challenging in the present job market.
Additionally, there is a chance that risky events like robberies, drunken behavior, and other disruptive behaviors, which tend to occur more frequently late at night, will occur.
3. With their franchisees, 7-Eleven operates under the operator model, where they receive approximately half of the sales. Franchises may occasionally receive rewards for exceptionally strong performance and high sales, including a reduction in the royalty rate.
4. The more you take, though, the more you have to give back to 7-Eleven. Franchise owners may end the year just breaking even or even losing money as a result of this having a significant influence on their profit margins.
5. Since owners of 7-Eleven have less influence over how they can run their stores, the relationship between the franchisor and franchisee may resemble that of an employer and employee more so than the typical franchisor and franchisee relationship.
Franchises are not given the option to select the things they offer because 7-Eleven pays for the supply, utilities, and other essentials.
6. This strategy is not for you if you enjoy trying out new foods to sell or different methods of operating. For entrepreneurs who are more imaginative, an independent store is a superior choice.
Things to Consider When Choosing 7-Eleven
Although, they will also have preferred products to stock, such as Slurpee, Big Gulp, and other beverages or snacks that are specifically for 7-Eleven.
7-Eleven undertakes local research to determine what kinds of snacks and products are popular and will request franchises to stock in those. This indicates that they’ve already done the research for you to determine which goods are the best to have in stock in order to generate steady sales.
You’re in for a treat if you choose to join the 7-Eleven franchise program and are a veteran. Veterans can take advantage of benefits like special financing support of up to 65% and a 20% first franchise fee discount. Additionally, they offer thorough training and assistance to individuals who require it.
In order to maintain the cooperation with the franchise, you must be ready to pay 7-Eleven some significant costs. To bring home a respectable wage, you’ll need to create a healthy profit margin.
You should also be aware that 7-Eleven and you will have an employer-employee relationship rather than a franchisor-franchisee one, which will limit your management options.
Despite this, 7-Eleven will oversee a large portion of the franchise’s finances and operations, including supply, equipment, and utility costs.
They will conduct the necessary research to determine the kinds of goods you should carry in stock in order to maximize sales and determine what is well-liked in the neighborhood. You will have to do less work and could make more money as a result.
Even though it could require some thought, if the 7-Eleven franchise seems like it will be a good fit for you, you might be close to opening your own 7-Eleven. Visit the company’s official franchisee website by clicking here to learn more about opening your own franchised business.
