One of the ways that many entrepreneurs start out is with the help of a franchise. Buying a franchise can make it a little easier to own and operate a business, since you get a degree of support from the franchisor in terms of marketing materials, supplies, and training. If you are looking for a franchise, one of the more attractive programs is 7-Eleven, because their franchise program provides franchisee with fully stocked, turnkey stores — you just have to walk in and run it using the training and systems provided by 7-Eleven.
How the 7-Eleven Franchise Works
In most cases, 7-Eleven actually owns the building (or leases it) and all of the equipment. The premises and equipment are then leased to the franchisee. When you become a franchisee, you will most likely buy an existing 7-Eleven store from another franchisee looking to exit the business. Less commonly, you can work with 7-Eleven to convert an existing land and building (or a store) to the 7-Eleven brand store.
With the 7-Eleven franchise, you get an existing store, and it is fully stocked and ready to go. It truly is a turn-key operation. Along with the store, you also receive about 300 hours of training, and you will need to send at least two employees to complete training as well.
In general, you have to meet the qualifications required to be considered to franchise a 7-Eleven store:
- Be 21 years of age or older.
- Prove permanent residency in the United States.
- Not have filed for bankruptcy within the last seven years.
- Have excellent credit.
- Retail, management and/or customer service–related business experience within the United States preferred.
Becoming a Franchisee
To become a franchisee, you must complete these 9 steps:
- Complete the prelimination application online.
- Complete the full application.
- Inteview with the 7-Eleven Sales Manager.
- Pass the qualification process.
- Select the store location.
- Business planning.
- Final interview.
- Agreement signing.
Once these steps are complete, you are officially 7-Eleven franchisees, and can begin operating the store.
The term of the franchise is 10 years, or 30 days before the end of the lease on the real estate for the store — whichever is earlier. You can receive financing help for the franchise fees, as well as other costs that you incur for running the store. It’s important that you understand all of the ins and outs of how the 7-Eleven franchise works. 7-Eleven has some fairly stringent requirements, and you need to read the agreement carefully and understand them before you get started.
How Much Does a 7-Eleven Franchise Cost?
A 7-Eleven franchise fee depends on how much the store makes, gross. To get an idea, you can look at the featured locations listing. 7-Eleven gives you the estimated start up cost for each store. If you are buying a franchise from another franchisee, you will be required to make a “goodwill” payment to the outgoing franchisee. This payment is also based on the gross receipts of the store.
You will also have to pay ongoing fees. Each year, you will pay a fee to 7-Eleven to continue operating the store. It is based on your gross profit. Additionally, you will have to pay an advertising fee, based on your gross profit for the preceding 12 months. The percentage you pay is higher or lower, depending on whether you hit certain levels or not.
If you are financing the inventory and other costs, you will also have to make payments, and you will be charged interest. 7-Eleven charges fairly reasonable interest for its financing. Make sure you are aware of other fees, including service fees, audits, premiums, and early termination fees. All franchises come with a number of costs, and 7-Eleven is no different.
Before you start a 7-Eleven franchise (or any franchise) you want to make sure that you have enough in terms of liquid assets. With a 7-Eleven franchise, it can help to have at least $150,000 in liquid assets to bring to the table. Yes, you can finance your franchise fees, but if you have something to start with, it can go better for you.
There isn’t a net worth requirement with 7-Eleven, but it still helps to make sure that you are in a reasonable financial position. Anytime you prepare to start a business, it is important to make sure that you are financially able to take on the responsibility, and that you can handle the risk.
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.