7-Eleven wants to add 100 new convenience stores in Orange County by 2010 including five this year and plans to do it mostly by converting other businesses rather than building new shops.
If you’re a mom-and-pop business with at least 2,000 square feet of space - it doesn’t even have to be a food store or retailer - you can apply to convert it to a 7-Eleven franchise, says spokeswoman Margaret Chabris.
O.C. currently has 128 7-Eleven stores.
Of course, you’ll have to get used to paying 7-Eleven 20% of your operating profits. Most franchisors charge an ongoing royalty of around 4% to 6% of gross revenues plus 2% or so for marketing. Cost of goods will determine which is a better deal for franchisees.
The benefits for mom and pop, Chabris says, include:
- A globally recognized brand
- Operating system that includes payroll and billing handled by the franchisor
- Operating information down to such details as the latest weather forecast to help determine whether to brew more coffee before the freeze or stock more ice ahead of a strong Santa Ana condition
- National and local advertising
Converting existing businesses has a couple of advantages for 7-Eleven:
- It’s faster than finding, negotiating and building new ones, as little as 23 weeks.
- Orange County and many other locations have few prime locations that don’t have buildings on them already.
The chain, which started franchising in 1963 with Speedy Mart in San Diego, Chabris said,
has 32,000+ stores worldwide including 5,600 in the United States. The conversion strategy is part of 7-Eleven’s goal to add 1,400 U.S. stores and transition to an all-franchise operation. Some areas, such as Florida, have a lot of corporate-owned stores. Those can be sold to franchisees, but in areas like Orange County where 95% of 7-Elevens are already franchises, business conversions are the way to grow.
A business conversion costs the franchisee $25,000 up-front, some of which will pay for employee training and grand opening. The corporate office will spend as much as $250,000 to convert the store from new Slurpee machines to computers that run the operation, Chabris says.
She touts the advantage franchisees gain by being part of a company whose stores sell:
- 33 million gallons of fountain drinks a year
- 156 million Slurpees a year
- A million cups of coffee a day
- 100 million hot dogs
Click here for more about 7-Eleven’s business conversion program.
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I love 7-11. I wish I had one closer to me in Irvine.
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