Convenience stores are now popular than ever. A lot of them are popping out in every country throughout the world. Today, there are many different brand names of convenience stores. And one of this 7 Eleven. This convenience store is already growing and expanding internationally, from the United States down to Asia. As of today, there are at least 58,000 7 Eleven stores that are currently operating in 17 countries worldwide. If you are planning to franchise a convenience store, 7 Eleven might be the best option. But how much does 7 Eleven franchise cost?
Average 7 Eleven Franchise Startup Fee
To be precise, 7 Eleven is the very first convenience store that operates 24/7. And the company is operating for around 80 years. 7 Eleven is also the rank #1 in the industry of franchises for more than 40 years or so. 7 Eleven started at Dallas in 1927 with the name Southland Ice Company that sells ice. But as soon as they noticed that they are getting a lot of customers, they began selling extra products such as bread, milk, eggs, and much more.
Today, 7 Eleven is now the largest retailer of convenience stores in the whole world. There is also a rumor than Southland Ice Company is the first ever convenience store in a name “Tote’m”. The name was then changed to 7 Eleven because of their opening and closing time which is 7 a.m. up to 11 p.m., even if the stores eventually became a 24-hour convenience store, they still continued with the name 7 Eleven.
As of today, 7 Eleven in rank No. 7 in Top 500 Entrepreneurs’ Franchise List.
Before you can franchise a 7 Eleven, you will need to qualify with their criteria. Here are some of it:
- First of all, you must be 21 years old or more.
- You have to prove permanent residency in the United States or anywhere you want to establish your business.
- You haven’t filed for bankruptcy within the last 7 years.
- You should have excellent credit.
- 7 Eleven also prefers an individual who has experience with any management related business.
7 Eleven is also looking for franchisees who have a mix of personal qualities and a good financial standing. For your financial standing, you must have a net worth of around $100,000 up to $250,000 and liquid assets of around $50,000 up to $150,000.
7 Eleven franchise cost can run around $37,000 up to $1,200,000. And it all depends on a lot of factors. Here is the breakdown of the cost:
- Franchising Fee – This is the first cost that you will have to make whenever you want to franchise a business. However, unlike other businesses, 7 Eleven franchise startup fee depends on the gross profit on the individual store. This means that the startup cost can run around $10,000 on the lower end and up to $1,000,000 on the higher end.
- Training – In every franchised business, you are also required to complete the training course required by the company. Training expenses before you can open a 7 Eleven store can run around $9,000.
- Opening Inventory Down Payment – 7 Eleven also requires you to pay a down payment for your startup inventory. The cost runs around $20,000.
- Extra Opening Inventory – After paying the down payment, you are also obliged to purchase your extra opening inventory. Expect to spend around $13,200 on the lower end and $48,000 on the higher end for this factor.
- Supplies – Supplies needed to operate your business may cost you around $250 on the lower end and $2,000 on the higher end.
- Licenses and Permits – Before you can fully run your 7 Eleven franchise, you are required certain licenses and permits which usually costs around $6,000 up to $8,000.
These are some of the factors that you should consider. You should not worry about the utilities such as water, sewer, electric, and gas since 7 Eleven will be the one that will be paying it. 7 Eleven will also be the one to pay the building rent and taxes for real estate.
Extra Fees
Now that you have an idea how much does 7 Eleven franchise cost, you should also know the additional fees you will need to make to completely operate your business. Here are some of them:
- Charge – Because 7 Eleven will be the one to pay for the utilities, rent or taxes, and sometimes equipment, you will be obliged to pay 7 Eleven charges. The cost is a variable percentage of your gross profit.
- Advertising Fee – The fee for this one is based on the gross profit of your store for the next 12 months after opening. You will have to pay an advertising fee of around 1.5 percent of your gross profit if your base period gross profit surpasses more than $400,000. On the other hand, if your base period gross profit is less than $300,000, your advertising fee will be 0.5 percent of your gross profit.
- Interest Cost – This factor greatly depends on the amount that was financed by your franchisor. As of now, the yearly percentage rate is currently 5.50%
- Termination Fee – This is only applicable if you want to end your business even if the term has not yet expired. 7 Eleven termination fee usually runs around $5,500.
- Conversion Fee – This is only applicable if you already have an establishment that you are planning to convert into a 7 Eleven. However, you can’t just easily convert one, you will have to qualify some of their requirements. The conversion will require you an initial fee of around $25,000 and an inventory down payment of around $20,000 up to $40,000. You will also have to pay the initial cash register fund.
Benefits
One major benefit of franchising 7 Eleven is that the company will help you shape your business. They will also help you obtain and bear the ongoing expenses such as land or building rent, equipment of your store, record keeping, the payment of the bills, and much more. You can’t find any other convenience store that you can franchise where the company will be the one to pay for these.