Do you want to start a 7-Eleven franchise and want to know the fees, agreement, details? If YES, here’s how much it will cost to buy a 7-Eleven franchise for sale. The convenience store market is a very competitive market in the United States with both small and large conglomerates jostling for the hearts and pockets of Americans.
A particular popular convenience store chain that has really stood out in the American convenience store industry is 7-Eleven Inc. So popular is the company that you are likely to spot a 7-Eleven store in a random street in the US. This green, orange, red and white store that became popular with its big cup offerings has grown into a global conglomerate over the years, while operating in over 18 different countries of the world.
7-Eleven is a very good example of a successful business that fought tough challenges and still managed to come out the other end stronger than before. If you want to become part of this success story though buying their franchise, then you need to read on to discover how you can go about it.
How Much It Cost to Open a 7-Eleven Franchise for Sale
- Franchising Options
- 7-Eleven Fees and Costs a Franchisee Must Take Note of
- Buying a 7-Eleven Franchise – Financing Options
- Choosing a Suitable Location for your 7-Eleven Franchise
- Costs Covered by 7-Eleven Inc. for the Franchisee
- 5 Criteria for Becoming a 7-Eleven franchisee
- 6 Steps to Acquiring a 7-Eleven Franchise
- A Brief History of 7-Eleven Franchise
7-Eleven offers its franchisees 3 different franchising options. They include; single store franchise, multiple-store franchise and business conversion program.
- Single-Store franchise: the single-store franchise is recommended for any entrepreneur who wishes to start his or her career as a business owner. This approach allows the franchisee to open one store and learn the business. They are allowed to expand their business when they have the capability.
- Multiple-store Franchise: this option is reserved for entrepreneurs who have strong retail and management experience and who are interested in charting the tough waters of business ownership. You need to have the requisite experience and financial standing before going this route.
- Business conversion program: 7-Eleven business conversion program (BCP) is designed for current owners of convenience stores who want to incorporate 7-Eleven into their brand. If you are interested in taking your business above and beyond that of your competitors, then this program is ideal for you.
7-Eleven Fees and Costs a Franchisee Must Take Note of
- Initial franchise fee: varies by store but it can be between $50,000 and $1,000,000
- Down payment on the store’s opening inventory – $20,000 approximately
- Bonds – varies by state
- Gasoline fee – (one time) – $10,000 to $40,000 (if the store also operates a gas station)
- Additional opening inventory – $13,000 to $48,100
- Cash register fund – $300 to $5,000
- Store supplies – $250 to $2,000
- Licenses and permit – $8,000
- Additional funds during first 3 months – $60,000
- Early termination fee – $5,000
- Mistery shop fees – $6.50 to $13 per shop
- Close out fee – $200
- Advertising fee – based on gross profit of the store for the immediately preceding 12 months, but basically 2 percent.
From the time the franchise application is made to the time you open your store for operation can be anywhere between 3 to 6 months. This startup time also includes training. This duration can be considered as very fast when compared to other franchise offerings.
The franchise duration expires 10 years after the effective date of the franchise agreement or 30 days before the end of the lease of the real estate of the store. Only one renewal is available to franchisees.
Buying a 7-Eleven Franchise – Financing Options
7-Eleven in some occasions do finance the down payment and initial franchise fees of certain stores. The company will also establish and maintain an open account for the franchisee as part of its bookkeeping services.
- Initial investment – $31,200 to $1,635,200
- Net worth requirements – $100,000 to $250,000
- Liquid cash requirements – $50,000 to $150,000
Under the 7-Eleven policy, Veterans get 10 to 20 percent off their initial franchise fee, and they equally get certain special financing asides what other franchisees get.
7-Eleven offers training to its intending franchisees. The training duration is approximately 300 hours and it takes place at the store support center in Irving, TX, and in a 7-Eleven training store. All intending franchisees should note that the successful completion of the training program does not guarantee that the person would become a 7-Eleven franchisee. The franchisees would be offered additional training when deemed necessary by the company.
Choosing a Suitable Location for your 7-Eleven Franchise
A franchisee is not allowed to open his or her store. Such a person can only purchase an existing location from the company or from an outgoing franchisee.
- Number of Employees
A typical 7-Eleven store requires about 7-10 employees to effectively run the store.
- Average income earning
What an average 7-Eleven franchise store makes varies greatly depending on the individual store; and what you sell does not determine what you make.
A store that makes $1,300,000 sales will make roughly $65,000 as profit. This percentage is calculated based on store sales, store GP percentage, payroll (including taxes and benefits), and other expenses.
General profit is split with 7-Eleven on a basis of 48-52 for a typical store (in favour of 7-Eleven), but the rate goes high if sales increase also in favour of 7-Eleven. Your general profit decreases when your sales increase.
So, the overall range of a 7-Eleven franchise that does not operate a gas station, and with sales between $900,000 and $2,000,000 is between $30,000 and $120,000.
But the 7-Eleven Store Agreement provides franchisees with a guaranteed yearly gross income of $310,000 for fuel stores, and $340,000 for non-fuel stores. If a franchise is not making this amount, 7-Eleven will adjust its monthly charges to cover his minimum gross income.
Costs Covered by 7-Eleven Inc. for the Franchisee
In the franchising of its single and multi-unit traditional programs, 7-Eleven obtains and bears all ongoing costs of the land, building and store equipment. In addition to that, 7-Eleven provides a fully stocked turnkey operation so franchisees don’t have to worry about that. Franchisees essentially move in once they have completed their franchise training program.
Franchisees are allowed to retain control of their land and building. By this, they become responsible for their land and building improvement costs during the conversion process, but they would also get the help of 7-Eleven’s development team during the conversion of their store.
7-Eleven also takes care of the following costs for its franchisees;
- 7-Eleven picks up some of the bills of the franchisee’s store including water, sewer, gas and electricity.
- 7-Eleven pays for the rent of the building and real estate.
- 7-Eleven finances all expenses that get run up by the store.
- 7-Eleven provides support structure as well as a business consultant who meets with the franchisees weekly to help them maximize store performance.
- 7-Eleven provides bookkeeping, bill paying and payroll devices for store operators.
After having extended all these help to its franchisees, 7-Eleven gets its recompense from the franchisees by sharing their gross profit which amount to 50 percent in the least.
5 Criteria for Becoming a 7-Eleven franchisee
For you to own a 7-Eleven franchise, the company expects you to have fulfilled the following requirements.
i. Be a Citizen of the united states: 7-Eleven expects any intending franchisee to be a citizen of the United States, or to have acquired a permanent residency. Such a person has to be at least 21 years as at the time of the application.
ii. Obtain and Maintain License: franchisees are expected to be able to obtain and maintain all licenses that would be required to open a store. This means that the franchisee has to be financially mature to handle the processes by himself.
iii. Have Excellent Credit: this is a very important requirement that all franchisees must fulfill. Without a good credit history, the franchisee may find it difficult to access loans, so having a good credit history is very necessary.
iv. No Fraud Records: the intending franchisee must not have any former record of felony convictions, or any other criminal record for that matter, that would likely taint the reputation of the company.
v. Have Requisite Experience: the franchisee must have the required business/work experience. He has to have retail, operations or management experience; food experience (not compulsory); 5 to 10 years’ experience in multi-unit management if such a person is interested in a multi-unit franchise; past business ownership experience; and he must have served in a branch of the United States military.
6 Steps to Acquiring a 7-Eleven Franchise
The following are the steps an intending franchisee has to take when acquiring a 7-Eleven franchise
1. Apply: An intending franchisee has to make his intentions known to 7-Eleven by first sending in an application. The application is made online on the company’s website. You are required to submit your personal details, credit history, as well as business experience. If your application gets approved, you would be invited by the company’s Franchise Sales Representative for a chat/interview process.
2. The Meeting: when you meet with 7-Eleven’s Franchise Sales Representative, you would be requested to take a business Leadership Inventory (BLI), which is basically a form of personality assessment where it would be determined whether you have what it takes to handle a business.
Next, you would also take a Business Acumen Evaluation (BAE) for the company to evaluate your business skills. The company on its own would run a background check on you to ensure that the information you provided is accurate. If all goes well, you would then be invited for a final discussion with the 7-Eleven Franchise Management Team.
3. Shop for your Store: After you have scaled through the marathon interviewing and assessment process, it is now time for you to pick the location of your store. You need to pick out a community you intend to locate your restaurant in. Once you have done that, 7-Eleven Franchise Sales Representatives will help you locate an available store or stores from their available store list. So, the decision about location does not lie with the franchisee alone.
4. Pay the Fees: If all goes well in picking your store, it is now time for 7-Eleven to offer you a franchise agreement, and you are also requested to pay all the listed initial fees.
5. Training: For you to succeed in your 7-Eleven franchise, you need to undergo extensive training, and this is where it begins. The training takes place at 7-Eleven store support center in Dallas, Texas for about 3 days. The training introduces the franchisee to the 7-Eleven brand.
If you have multiple stores, all your store designees will also attend. After the 3-day launch class, you would go back to your community for 6 to 8 weeks College of Operations Leadership Training (COOL). This is a company based training that takes place in an actual store, and it teaches the franchisee everything he or she needs to know about running a business while also providing hands-on experience.
6. Hold your Grand Opening: Every 7-Eleven restaurant deserves a grand opening. 7-Eleven would help franchisees organize a big opening to ensure that it becomes a resounding success.
A Brief History of 7-Eleven Franchise
- Business established – 1927
- Date of Franchise – 1964
- Headquarters – Irving, Texas, United States.
Every company that has ever achieved success has its own unique history, and the same is true for 7-Eleven Inc. The company started as an ice store that sold ice to households in the community who do not have refrigerators to preserve their food. Subsequently, it opened four other stores, and it was called the Southland Ice Company.
The store started selling a little grocery for the convenience of those who lived within the vicinity. Jefferson saw a need to stock these everyday staples that customers needed frequently in order to prevent them from going grocery shopping all the time, especially when the stores close down on Sundays. Around that period, the new company had eight ice plants and 21 retail ice docks.
In 2003, the company opened its 25,000th store, and in November 2005, the company became a wholly owned subsidiary of Seven and I Holdings, a diversified retailer, formed a few months earlier by Ito-Yokado. The signature products of 7-Eleven include Slurpee, an iced drink introduced in 1966, and the Big Gulp, a 32-ounce cup for fountain drinks that was introduced in 1976. Every year, starting from 2002, 7-Eleven gives away hundreds of Slurpee drinks to celebrate the company’s birthday which was pegged on July 11 (7-11).