There are few businesses that have the kind of universal recognition that 7-Eleven does. This is one of the major pros to consider if you’re looking into opening a 7-Eleven franchise.
Of course, for all the advantages of franchising, there are also downsides to consider as well—as is the case with any business venture. Whenever you’re looking into franchise opportunities, you want to make sure you have a clear-cut idea of what to expect and a strong ballpark of what you’re going to pay. In this article, we’ll look at all of the information on opening a 7-Eleven franchise, including details, expectations, and, of course, 7-Eleven franchise costs.
7-Eleven Franchise Overview
If it seems like 7-Eleven has been around for a while, you’re right. The company started in 1927 when it was founded in Dallas, Texas. It used to be called “Tote’m,” but was renamed 7-Eleven in 1946 when the store’s hours were extended from 7 a.m. to 11 p.m. Now stores are open 24 hours, which is a signature of theirs. They were actually the first 24/7 convenience store.
Now, there are about 60,000 7-Eleven franchise locations. Over the past year, they’ve grown their store footprint almost 4%; over three years, it’s been close to 17%. 7-Eleven’s parent company is a Japanese company called Seven and i.
Types of 7-Eleven Franchises
There are a few different types of 7-Eleven stores. The company offers three different types of setups for franchisees to consider when deciding what kind of 7-Eleven franchise to open:
- Standalone stores: These are single-site 7-Eleven stores, which is likely the kind with which you’re most familiar.
- Business Conversion Program (BCP) stores: These are stores that convert into 7-Elevens from delis, convenience stores, and more. Here, the franchisee is responsible for acquiring the land and building (we’ll explain more below) in exchange for a different royalty. If you’re interested in BCPs, make sure you request the franchise disclosure document that’s specific to them.
- Micro-market stores: These are stores within other spaces—office buildings, airports, universities, hotels, etc.—and have more limited footprints. These also have different franchise disclosure documents.
7-Eleven Franchise Information
There’s a lot to understand before you decide on the right franchise opportunity for you. Among the things you’ll want to consider are the corporate framework, the franchisee expectations, and, naturally, costs. We’ll go through much of this here.
7-Eleven Franchise Costs
Of course, cost is one of the most important considerations of any business venture. How much is a 7-Eleven franchise? As with any franchise, there are several 7-Eleven franchise fees you should know about. Here are some of the most important 7-Eleven franchise costs:
Initial investment: Initial investments will vary significantly based on your location and experience—and we mean significantly. On the low side, you can expect to invest around $50,000; the high end can be upward of $1.1 million.
Franchising fee: The franchise fee can be $0 for some, all the way through $100,00 on the highest end.
Net worth: The current net-worth requirement is between $100,000 to $250,000 of assets.
Cash liquidity: Liquidity requirements range between $50,000 to $100,000.
Beyond the initial investment you’ll make, 7-Eleven also requires you to pay ongoing fees. There are a few different types, but the most important to mention among them are:
Royalty fee: The 7-Eleven franchise royalty fee is variable based on gross store sales. You can expect to pay a percentage of your sales to the 7-Eleven franchisor in predetermined time increments (i.e. monthly or quarterly).
Advertising and marketing fee: You can expect to pay around 1% for marketing and advertising supported by 7-Eleven’s corporate HQ. The advantage to this is you don’t have to think of your own marketing strategy and you’ll benefit from the corporate efforts instead.
Additional 7-Eleven Franchise Information
Here is some additional information that is essential to understanding 7-Eleven franchising.
You’re required to have seven to 10 employees to open up, which is on the lower side compared to some other franchises.
The length of the first franchise term is 15 years, which is pretty average, and if you’d like to renew, you’ll get the same terms as your initial agreement.
Education and Training
7-Eleven requires about 300 hours of training, including 240 hours of on-the-job training. First, you’ll travel to Dallas, Texas, for LAUNCH, a three-day orientation that introduces you to the 7-Eleven brand. Once that’s complete, you’ll participate in six to eight weeks of C.O.O.L. (College of Operations Leadership) in-store training in your area.
Along with initial training, you might also be asked to complete additional or ongoing training. Both the franchisee and their employees must complete some level of training (though, obviously, it’ll be far more intensive if you are the owner).
Like many other franchises, 7-Eleven offers an incentive to veterans who open up stores. They’ll get a discount of between 10% and 20% off the franchise fee, maxing out at $50,000. Veterans may also receive preferred interest rates and special financing opportunities on any loans they take to start their 7-Eleven.
Beyond advertising and training, 7-Eleven offers lots of other types of support to franchisees. This includes paying for utilities (water, gas, sewer, electricity) and rent and real estate taxes. As you’re starting up, you’ll also appreciate that 7-Eleven will take on the cost of land, building, and store equipment.
Be aware that with this support comes an additional element of the relationship between franchisor and franchisee. Some have said that the touch from corporate is a little heavy compared to other franchises, so take into account how comfortable you are with this.
7-Eleven Franchise Financing
It’s likely that you’ll need some sort of franchise financing to help you open a 7-Eleven, especially if you don’t have a ton of liquid capital.
Unlike some other franchises, 7-Eleven does have some options for internal financing, particularly to help with the franchise fee and down payment. This can cover up to 65% of the cost. Not every candidate will qualify, so you’ll want to know what your other options are, too. 7-Eleven also has some third-party relationships with lenders, which can help with things including equipment, payroll, and inventory.
You might also want to look into other third-party sources as you search for financing. There are several different types of lenders who can help with the best financing for franchises, including loans such as equipment financing, term loans, personal loans for business, and more. Strong candidates will have good credit and, if possible, other successful business experience.
7-Eleven Franchise Pros and Cons
One of the most important steps beyond simply looking at the 7-Eleven franchise costs is to look at the pros and cons comprehensively. Weigh which ones are more significant than others, and see how the other elements do or don’t balance them out.
Name recognition: As a high-profile brand, 7-Eleven is well known and customers understand what they’ll find inside when they see your sign.
Streamlined system: 7-Eleven has intentionally designed a very streamlined franchising system in which you can begin operating your store very quickly—generally, in three to six months.
Corporate support: 7-Eleven headquarters kicks in to pay a variety of expenses.
Lower initial investment: While still a significant investment, 7-Eleven has a lower initial investment than many other franchises. If you’re especially cost-conscious, though, consider these low-cost franchise options.
Territory: The 7-Eleven franchise license covers only one location, and does not include territory protection, which shields franchisees from other approved franchisees coming into your area and setting up a competing business.
Profits and fees: Though 7-Eleven is still a well-rated franchise, it has reported lower store profits recently. Some franchise owners have also complained about fee arrangements that have cut into their personal salaries and store profits.
Corporate support: Although the monetary support is strong, some franchisees feel that the parent company is too hands-on.
The Bottom Line
There’s a lot of name recognition for 7-Eleven, which can be a huge advantage for franchisees looking for the right opportunity—and for business owners as a whole. It’s just one of the many things to take into consideration as you’re deciding whether or not you should open a 7-Eleven franchise of your own.
If you are interested in pursuing a 7-Eleven franchise, you should fill out an application on their website. Then, if it’s a good fit, an account executive will reach out to you so you can both learn more. As the process progresses, you will also receive the franchise disclosure document (FDD)—this is crucial to understanding the franchisor’s expectations, support, and responsibilities, as well as what you’re expected to bring to the table.
As you do your due diligence and learn more about the franchise, don’t hesitate to reach out to current and former 7-Eleven franchisees to get their firsthand experiences working with the company. If everything looks good, you can soon be running a 7-Eleven franchise of your own.