7-Eleven is an international chain of over 58,000 convenience stores operating in 17 countries worldwide. 7-Eleven was the first 24/7 convenience store, has been a convenience retailer for over 80 years, and has been a leader in the franchise industry for more than 40 years.
The History of 7-Eleven
7-Eleven began in 1927 as the Southland Ice Company. As customers came to buy ice, enterprising employee John Jefferson Green also began selling milk, bread, and eggs after hours in order to reduce the need for customers to travel long distances for basic items. The ease of shopping appealed to customers, and the profitable business model turned into one of the first convenience stores.
Joe Thompson, one of the founding directors of Southland Ice Company, is credited with developing a training program that emphasized the importance of each customer receiving the same quality of service in every store. These were an early form of the brand standards that are now employed in franchising.
Early stores went by the name Tote’m, since customers “toted” their packages away. In 1946, the stores' hours were extended, opening at 7 a.m. and closing at 11 p.m. This was unprecedented at the time, and the chain was given a new name to reflect that.
Over time, most 7-Eleven locations have become 24-hour stores. But the 7-Eleven name has stuck and has helped develop into a brand with worldwide recognition. This Dallas-based company is now the world’s largest convenience store retailer, though it prefers to market itself as a “neighborhood business” in keeping with its 1927 roots.
How Much a 7-Eleven Franchise Costs
The initial investment to own and operate a 7-Eleven franchise location is based on the store's individual gross profit; this can range from $50,000 to $1,000,000. This comes with a net worth requirement between $100,000 and $250,000 and a liquidity requirement of $50,000 to $150,000.
Franchisees are responsible for a down payment on the store's inventory, licenses, permits, and bonds, which is generally around $29,000, as well as the starting cash register funds. There is also a gasoline fee (if you offer fuel) and the “initial inventory-supplies-permits-bonds, and cash register fund fee.”
Pros of Opening a 7-Eleven Franchise
As a company, 7-Eleven is highly ranked among franchise opportunities. Opening a 7-Eleven franchise allows you to upgrade an existing business to one with blockbuster branding and a high level of name recognition. The corporation provides extensive support to franchisees, including:
- Paying for water, sewer, gas, and electric utilities.
- Paying for any building rent and real estate taxes.
- Providing weekly business consultant meetings to support franchise growth.
- Obtaining and bearing the cost of land, building, and store equipment.
- An internal financing program that can offer up to 65 percent financing of the initial franchise fee.
7-Eleven has a streamlined and established franchising system, which allows you to begin operating your store as soon as you complete the franchise training program.
Cons of Opening a 7-Eleven Franchise
7-Eleven takes an active role in the franchisee’s business, which for some experienced franchise owners may feel too hands-on. This also has the potential of to lead to charges of joint employment and vicarious liability, so strong safeguards and manual language must be included in the 7-Eleven system.
Though 7-Eleven is is a top franchise opportunity, it is not as highly ranked as it was even a few years ago and not as profitable as some other franchise opportunities.
In opening a 7-Eleven franchise, you must weigh the high level of support from corporate and highly recognizable brand against lower possible profits.
7-Eleven Franchise Fast Facts
- Business Established: 1927
- Franchising Since: 1964
- Start-up Cost: Varies
- Net Worth: $100,000 to $250,000
- Liquidity: $50,000 to $150,000
- Franchise Fee: $50,000 to $1,000,000