Convenience stores have become an essential part of American culture. Among them, the most prevalent one is 7-Eleven. The 2024 NACS/NIQ Convenience Industry Store Count has revealed that there are currently 152,396 convenience stores in operation throughout the United States.
It is no surprise that the 7-Eleven franchise is a top contender in the market. They offer convenience that goes beyond just snacks and energy drinks and have established themselves as a leader in the industry.
However, before taking the plunge and becoming the owner of a 7-Eleven franchise, it is crucial to consider nine factors that come with such an investment. Nevertheless, owning this type of business can be advantageous. Let’s explore some of these benefits now!
Why 7-Eleven franchise
- Anyone with enough cash at hand can take advantage of the 7-Eleven franchise opportunity. To become a franchisee, you'll need to pay an initial fee of $50,000-$750,000, which varies depending on the store you choose. You'll also need to provide a down payment of $29,000, which covers the cost of store inventory, supplies, licenses, permits, and bonds, as well as cash register funds.
- The initial franchise fee is higher in cities where 7-Eleven stores generate higher revenue. Franchise operators are expected to pay between 4% and 12% of their gross profits annually.
- 7-Eleven offers a variety of franchise options for both single and multiple locations, and its franchised products can be sold in multiple stores as well.
- Their franchisees benefit from the 7-Eleven brand name, access to a proven business system, and over 60 years of franchising experience.
- 7-Eleven offers extensive training programs and support in local training centers to help franchisees succeed. They receive guidance on store design, marketing services, product selection, and employee management systems to run their businesses with confidence and ease.
Businesses looking to join the 7-Eleven franchise network can enjoy the benefits of a strong brand reputation, a proven business model, and an extensive network of stores. Through the business conversion program, they can receive the support they need to thrive in the convenience retail industry.
Moreover, 7-Eleven is highly regarded by its new franchise owner for the dynamic communication between corporate and the current franchisee’s interest.
*The method of computing the franchise fee is fully disclosed in the Franchise Disclosure Document.
Potential franchisees are provided with a detailed legal document known as the Franchise Disclosure Document. This document is a transparent window into the franchisor’s business operations, legal obligations, and expectations. It serves as a comprehensive guide and legal requirement for both franchisors and franchisees.
9 Factors to Consider Before Investing
1. The 7-Eleven Franchise Track Record
In the Franchise Industry
The convenience store industry, to which 7-Eleven Inc. belongs, varies globally. Approximately 150,000 convenience shops are operating in the U.S. Roughly 13,000 are 7-Elevens, which have slowly been on the decline in the U.S.
In Online Market
7-Eleven franchises and other competitors have been getting hit because of online sales. 7-Eleven is overwhelmingly the largest convenience store in the U.S, with around double the stores of the second chain, Alimentation Couche-Tard Inc.
2. The Competition
There are also many convenience store chains across heavily populated states, like New York, California, and Texas, that are family-owned and operated and compete with major conglomerates. These stores can offer better prices or quality than 7-Eleven.
7-Eleven, Circle K and Alimentation Couche Tard are the largest convenience stores in the U.S as of 2024 based on the number of locations. 7-Eleven has the most number of locations with 9,492 locations across 38 states and territories.
3. The Demand Abroad
The 7-Eleven company is not just confined to the U.S. Presently, Japan boasts an extensive network of over 57,000 convenience shops, with 7-Eleven leading the market with a staggering 21,000 stores.
It is widely believed that 7-Eleven Japan’s success is due to its efficient delivery system and high-quality food offerings, compared to its US counterparts.
While this is subjective, based on extensive reviews and anecdotal evidence, it appears that Japanese 7-Eleven locations generally offer a higher quality of products compared to others in the market, especially in the United States.
Overall, 7-Eleven’s success in Japan is largely attributed to its ability to understand and meet the specific needs of the Japanese market by offering convenience, fresh food choices, and delivering proactive customer service.
7-Eleven in Asia
Many people believe that 7-Eleven stores in Asia offer a healthier and more consistently enjoyable menu. While fast food and snacks can be tempting, some consumers prioritize healthier options.
Finally, 7-Eleven stores are widely available and “convenient” for customers. They sell affordable snacks, water, and even beer. Additionally, customers can buy SIM cards and reading materials at their local stores.
Many cultural distinctions influence Franchises:
Of course, cultural differences may influence how people perceive these stores in different countries. In Asian countries, 7-Eleven has become almost like a bar, where customers can grab a drink and enjoy a relaxing streetside massage.
4. The 7-Eleven Franchise Investment Levels
It may be a much more profitable and managed business than an alternative.
Strategically locating 7-Eleven stores in Franchise City can lead to accelerated business growth. However, it is important to note that these locations are more expensive than those in rural or less desirable areas. As with any business, investing more money can increase the store’s gross profit and sales.
6. The Pros and Cons of Owning a 7-Eleven Franchise
- the franchise store is situated in consumer-driven areas,
- surrounded by lots of foot traffic,
- gas stations or commercial
It may be a much more profitable and managed business than an alternative.
Strategically locating 7-Eleven stores in Franchise City can lead to accelerated business growth. However, it is important to note that these locations are more expensive than those in rural or less desirable areas. As with any business, investing more money can increase the store’s gross profit and sales.
6. The Pros and Cons of Owning a 7-Eleven Franchise
Before you decide to invest in a 7-Eleven, you must weigh the pros and cons of owning one.
The pros include:
High returns on investment
It has been reported that some owners can make as much as $50-$80k per year after their initial investment is paid off.
A large customer base
- 7-Eleven has a worldwide presence and is one of the most popular 24-hour store models in many countries.
- A wide selection of products - they offer everything from snacks to beer, cigarettes, and even groceries.
The cons include
High start-up costs
The startup cost includes three major components: An initial franchise fee, an inventory down payment, and an initial cash register fund.
It can cost up to $750k to open a 7-Eleven store, which may be too expensive for some.
Long hours
Due to the 24/7 nature of the store, owners may need to work or operate upwards of 90 hours a week or pay employees to cover shifts.
Competition
Other convenience establishments such as Wawa, Circle K, and Speedway may be competing with the 7Eleven franchise in certain areas, making it more challenging to profit.
Aside from that, franchise business owners are frequently confronted with a few difficulties they must manage:
- competition due to other businesses opening near them;
- limited financial liberty due to franchising controllers;
- and the need to reinvest in their business.
However, all these prices can be managed by owners and accepted as the cost of doing business.
7. The Unforeseen Consequences
Owning and running a business can be risky, especially during unforeseen situations. 7-Eleven, for instance, suffered a considerable blow due to the pandemic, leaving franchisees with limited earning opportunities while most businesses were shutting down.
Being a business owner also means job security is not guaranteed, and the pandemic caused many such businesses to go under.
The franchisees were bound by enduring a long-term lease franchise agreement associated with the franchise, which they were unable to terminate or required to fulfill mortgage and rent obligations. Sunk costs and other fees are present in almost any business. And with something risky like a convenience store, they become even more present.
8. The Governmental policy
The minimum wage is rapidly rising across the US, especially in big cities where 7-Elevens are the most profitable. Considering stores must be open 24 hours a day, employment costs are even more essential.
7-Elevens could face union labor at some point and raise labor costs even more.
9. The Risks
Investing in a franchise or any business or asset can bring both advantages and risks. The same goes for owning a 7-Eleven. If you are willing to put in effort and take on some level of risk, it could be a promising path to financial success.
Conclusion
Becoming a 7-Eleven franchisee is a huge step to take, especially for those who have just gotten started in this industry. With rising labor costs and already hefty initial fees, 7-Elevens in big cities may still not be the most economical to open.
Taking alternatives, like investing in particular franchise opportunities that suit your passion and interest, can be the best way for you to start your entrepreneurship journey. Speak with a franchise consultant to help you find this type of franchise.
