Franchising Convenience

7-Eleven, the #1 franchise according to Entrepreneur magazine“There are currently 5,580 7-Eleven franchises in the U.S. and 25,062 abroad. In fact, a new 7-Eleven opens somewhere in the world about every four and a half hours,” according to Joseph Depinto, who is the CEO of 7-Eleven, as reported in Entrepreneur magazine (which also ranked 7-Eleven the #1 franchise for 2008).

That is over 30,000 franchised units worldwide. I have a feeling that 7-Eleven is doing a lot of things right.

Would you ever consider opening up a 7-Eleven, or for that matter, any convenience store? I certainly wouldn’t consider it, as the hours required to successfully operate one are too long for in my current situation.

Of course if I were going to consider getting into a retail convenience store franchise, 7-Eleven would have to be taken seriously. They seem to have a great marketing team. They created a strategic partnership with The Simpson Movie, last year, and also worked with Citibank to put ATMs in 5,500 US stores.

Even if you don’t see yourself running a 7-Eleven, one can’t deny the power of the brand. Huge franchise companies like 7-Eleven, McDonalds, Jani-King, and others, can approach big corporations, and create synergistic marketing alliances, that benefit both parties. Being a franchisee of a well branded franchise concept that uses smart and aggressive marketing and PR professionals to it’s advantage, means more foot traffic, which equals higher income potential.

The investment for a 7-Eleven ranges from $65,000 to $227,000. 7-Eleven also does a couple of unique things as a franchisor. Consider the following, which appears on the 7-Eleven website:

We obtain and bear the ongoing cost of the land, building and store equipment
– We pay water, sewer, gas and electric utilities
– We pay for any building rent and property taxes
– We provide financing for all normal store operating expenses
– We provide record keeping, bill paying and payroll services for store operations
– We provide a support structure and a field consultant who meets weekly with the Franchisee to help provide the opportunity to maximize store performance and profitability

On the other end of the spectrum are convenience store franchises that are also in the gasoline business. BP’s ampm is a growing franchise concept. Unlike with 7-Eleven, in the BP franchise business model, the franchisee buys the land, the building, and the inventory. The investment range is from $2,583,616 to $6,661,716. Not only is the financial commitment substantial, but the time commitment is too. There are 3 ways to get into this franchise, according to the BP website:

- Develop a new to industry ampm facility including land acquisition and construction of the improvements
– Re-brand an existing (non ampm) gasoline c-store facility
– Competitive bid of an existing BP ampm company owned, company operated facility

Some other competitors in the franchise convenience store space include AmeriStop, Express Mart, and Shefield Gourmet.

There are over 3,000 different franchise opportunities to choose from, and it is an increasingly crowded market. For some, owning a convenience store/gas station type franchise is the way to go. For others, food franchises, retail specialty franchises, or something in B2B is a better fit.

Choices, and the people that make them, are what makes our world go round.

* * * * *

Joel Libava on 2008 franchise trends About the Author: Joel Libava is President and Life Changer of Franchise Selection Specialists. He blogs at The Franchise King Blog.

8 Comments ▼

Joel Libava - Franchise Expert


Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

8 Reactions

  1. Franchising sounds interesting, but, I dunno, I just don’t think I’d have it in me personally. I’d rather build something from the ground up…

  2. I too don’t think I would be up to owning a convenience store. They seem like a time consuming business with a lot of employee turnover. Judging by the investment options, 7-eleven looks like a bargain compared to BP.

  3. Ander/Amanda,
    Lots of hurdles. Lots of headaches. Part of small business ownership, I guess.
    7-Eleven seems to be doing just fine.
    Joel Libava

  4. Actually, I would normally never consider franchising but given what I’ve seen from the 7-Eleven franchise. . .if I were to do it – that’d be my pick. And they’ve got the right idea, too. Assisting the franchise owner with such things as payroll can really help to increase your chances of success as a franchise owner. Sounds like the 7-Eleven franchise realizes that their success depends on the success of the franchises themselves – not just how many they’ve sold. For me, personally, a franchise such as this sounds like a 24/7 situation. Not sure it’d work for me, but apparently it’s working just fine for thousands of others.

  5. Hi Joel, interesting contrast between the BP and 7-Eleven approaches.

    To what do you attribute the differences in philosophy?

    Anita

  6. Anita,
    That is a great question.
    Am I allowed to NOT have an answer???
    JL

  7. Sure, Joel! :)

    You mean you don’t have all the answers????

  8. 7 Eleven has done a great comeback here in Sweden. The company was under pressure from the unions and others due to their opening hours, but now people are more custom to open early close late stores.

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