Is 7 Eleven Franchise A Good Investment?

7 Eleven Franchise | Franchise Coach

The American people enjoy quick and easy accessibility. Stores such as 7Eleven provide a fast solution for the customer. To start a business in the United States, entrepreneurs seek the best business opportunity.

It is luckily possible for a successful franchise company to profitably invest. It’s very likely you’ve seen a 7-Eleven store anywhere. Across the world, there are over 70,000 7 Eleven franchises. This sustainable and growing business model is recognized by franchisees and franchise owners worldwide.

Why 7-Eleven franchise

A 7-Eleven franchise opportunity is available to anyone, particularly for those who have enough cash at hand. To become their franchisee, you’ll be required to pay the franchisor:

7 Elevens in cities demand a higher initial franchise fee because of higher revenue. Store owners expect to pay between 4% and 12% of their profits annually.

7 Eleven provides multiple franchise options to single and multiple locations for its customers and is also able to sell its franchised products in multiple locations as well.

9 Factors to Consider Before Investing

1. The 7-Eleven Franchise Track Record

In the Industry

The convenience store industry, to which 7 Eleven belongs, varies globally. Approximately 150,000 convenience stores are operating in the United States. 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 United States, with around double the stores of the second chain, Alimentation Couche-Tard Inc

2. The Competition

There are also many convenience store chains across the heavily populated states, like New York, California, and Texas, that are family owned and operated and compete with major conglomerates. These convenience stores can offer better prices or quality than 7-Eleven.

3. The Demand Abroad

The 7-Eleven company is clearly not just confined to the United States. The country with the most 7-Eleven franchises, even more than the United States, is Japan. Of the roughly 50,000 convenience chains in Japan, just over 20,000 are 7-Eleven franchises.

It is said that the success of the Japanese 7-Eleven is because of efficient delivery and food quality compared to its US counterparts. 

Of course, much of this is subjective but from extensive review patrolling and anecdotal evidence, it is clear that the Japanese 7 eleven represent greater quality options relative to the rest of the competition when compared to the United States. 

7 Eleven Asia | FranchiseCoach

7-Eleven in Asia

It is also said that the Asian 7-Elevens have healthier and more consistently edible menus. Filling up on fast food and snacks may be appealing once in a while but for many, healthier options are imperative. 

Finally, 7-Eleven is said to be extremely abundant and “convenient” for consumers. They sell water, cheaper snack options, and even beer. Customers also cite options to buy sim cards and even reading materials at their local stores.

Many cultural distinctions influence Franchises:

Of course, cultural differences may drive many consumers to feel differently about stores in different countries. 7-Eleven is said to have almost evolved into a bar overseas, especially in Asian countries. Customers can enter a 7-Eleven franchise store, grab a drink, and head to the streets for a relaxing streetside massage. 

4. The 7-Eleven Franchise Investment Levels

7-Eleven franchise owners should have different expectations everywhere. A 7-Eleven franchise in the heart of a city could run you close to 3 quarters of a million to get up and running but on average, according to mobile cuisine, the average 7-Eleven franchise does 1.4 million sales a year.

Of course, 1.4 million in sales does not translate to nearly that much in profit. Furthermore, rural 7-Eleven franchise stores would likely drastically bring down this number while their city counterparts could be many times the average. 

5. Profit maximization

Profits could be high and while it may take some time to recoup your initial investment, it is clear why the 7-Eleven franchise is only of the biggest and most successful franchising across the globe. 

Furthermore, this business model is not easy to run and this must be considered before taking the jump to open one. The store must be opened 24-7. This means that your 7-Eleven store must be staffed and functioning all day and night, every day of the week. 

7-Eleven Store must be open 24-7

Store managers can work upwards of 90 hours a week to save employment costs or must pay employees to shift work all around the clock. To add to this, the rising cost of employment and the opportunity cost for operators to work many hours at their 7 Eleven store may scare potential franchisees away. 

Buying a job is a tricky and slippery road to go down. Buying and owning an asset like a 7-Eleven franchise may be an economically poor decision if certain factors are not met, such as:

It may be a much more profitable and managed business than an alternative.

Of course, 7-Eleven in these sites is more expensive than in more rural and less desirable locations. Like anything in life, you must spend money to make money.

6. The Pros and Cons of Owning a 7-Eleven Franchise

Furthermore, owning and operating a franchise has many advantages and disadvantages that potential franchisees must consider before making any final decision. 

A franchise is not necessarily too difficult to run because they get support from the existing headquarters and have stronger success rates than startup businesses. Besides, it has built-in brand recognition and does not need to spend money on advertising.

Despite countless positives, a franchise comes with downsides as well. In addition to long, grueling hours, labor costs, and the restriction of freedom, franchise owners are prone to multiple problems that they have to deal with, such as: 

7 Eleven Franchise (Pros and Cons) | FranchiseCoach

7. The Unforeseen Consequences

Owning and operating any business opens you up to tremendous risk in other ways. 7-Eleven was hit hard during the coronavirus pandemic. And franchisees had little opportunity to make money from their stores while almost everything was shutting down.

Job security is not existing when owning a business model like 7-Eleven and the Covid-19 pandemic caused many businesses to go under.

Their franchisees had long-term lease agreements they could not get out of or needed to pay mortgage and rent. Sunk costs 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 24-7, employment costs are even more essential.

7-Elevens could face union labor at some point and raise labor costs even more.   

9. The Risks

Owning a franchise or any business or asset has inherent advantages and risks. 7-Elevens are the same. If you are willing to put in work and simultaneously take on risks, it may be a good route to take for financial victory.

Conclusion

Becoming a 7-Eleven franchisee is a huge step to take, especially for those who have just 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 a franchise opportunity that suits 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.

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