7 Eleven Franchise Cost & Fees
Date of Incorporation: 1927
Franchising Since: 1964
Headquarters: Dallas, Texas
Business Description: 7-Eleven stores are extended-hour retail convenience stores that emphasize convenience to the guest and provide a broad array of products, including many not traditionally available in convenience stores, to meet the changing needs of guests. These products include an assortment of high-quality fresh food, hot food and proprietary beverage offerings, and private brand items. 7-Eleven stores are generally open every day of the year, with the vast majority open 24 hours a day, and are located in neighborhood areas, on main thoroughfares, in shopping centers, or on other sites where they are easily accessible and have parking facilities for quick in-and-out shopping.
Franchise Offer: The 7-Eleven franchise is a business system that includes: a license to use the service mark "7-Eleven" training; continuing advice and assistance on operating a store; bookkeeping services; store inventory auditing; financing; merchandising assistance; advertising; and other services as described in the disclosure document. There are two types of franchises offered:
- A Traditional Individual 7-Eleven Store:The franchisor (7-Eleven) acquires the land, building and equipment for the store, and 7-Eleven or an affiliate leases the franchisee a fully equipped and stocked 7-Eleven store that is ready to operate. The granting of a franchise to a franchisee does not give the franchisee the right to operate any additional units. In the 7-Eleven franchise program for traditional individual 7-Eleven stores, only single unit franchises are offered.
- Business Conversion Program (BCP) franchise: The franchisee is responsible for acquiring the land and building for a store site and pays a different royalty than traditional franchisees. The franchisee of a BCP is also subject to a different disclosure document than the franchisee of a traditional store.
Financial Assistance: The franchisor may finance the Down Payment and Initial Franchise Fee in certain situations. This financing may not be offered to all applicants. The franchisor also will establish and maintain an Open Account for the franchisee as part of the bookkeeping services provided (see FDD for further details). The franchisor does not offer financing arrangements from any other sources, and does not receive payments for the placement of any financing.
Training and Assistance: The Training Program consists of approximately 300 hours of training at the Store Support Center located in Dallas, TX and in a 7-Eleven Training store. Successful completion of the Training Program does not guarantee that the franchisee will be approved as a franchisee. The franchisee must have at least two individuals successfully complete the Training Program within a reasonable period of time after taking possession of the store. 7-Eleven may make training available to up to three employees before the franchisee takes possession of the store. The franchisor may offer additional training when deemed necessary based on changes in the 7-Eleven System.
Territory: The franchisee will not receive an exclusive territory with the franchise. 7-Eleven has no obligation to grant the franchisee additional franchises. The franchise agreement covers a single 7-Eleven store location designating the specific store and street address.
Term of Agreement and Renewal: The franchise term ends at the earlier of 10 years after the Effective Date of the franchise agreement or 30 days before the end of the lease of the real estate for the Store that was in effect on the Effective Date. One renewal term is available for a term equal to the number of years of the initial term in the then-current franchise agreement.
Obligations and Restrictions: The franchisee agrees under the franchise agreement to devote his or her best efforts to the store and to actively and substantially participate in the actual operation of the franchise. Franchisees further agree to work full time in their store and supervise day-to-day operations, and make themselves available to meet with the franchisor at reasonable times, at the franchisor’s request, but in any event franchisees agree to meet with the franchisor at least once a week at their store during reasonable business hours. If a franchisee is temporarily out of town or otherwise temporarily unavailable to meet with the franchisor at any time, the franchisee agrees that the franchisor can meet with the franchisee’s employees to discuss the franchisee store's business and take any action contemplated or allowed under the franchise agreement. The store must carry all categories of inventory specified. Franchisees must carry, use and offer for sale only the inventory and other products that are consistent with the type, quantity, quality, and variety associated with the 7-Eleven Image and as the franchisor specifies in the franchise agreement. Franchisees must comply with the franchisor’s merchandising and shelf life requirements for fresh foods.
Estimated Number of Units: 59,580
|Name of Fee||Low||High|
|Initial Franchise Fee||$0||$1,000,000|
|Down Payment for Opening Inventory||$20,000||$20,000|
|Additional Opening Inventory||$13,200||$48,100|
|Cash Register Fund||$300||$5,000|
|Licenses and Permits||$6,000||$8,000|
|Real Estate and Equipment||Covered in “7-Eleven Charge” (see Other Fees)|
|Goodwill||Only applicable to incoming franchisee’s buying a current franchisee’s interest in a franchise|
|Additional Funds During First 3 Months||$0||$30,000|
|Type of Fee||Amount|
|7-Eleven Charge||Variable percentage of Gross Profit.|
|Advertising Fee||The Advertising Fee is based on the Gross Profit of the store for the immediately preceding 12 months (Base Period
- If Base Period Gross Profit exceeds $400,000,the Advertising Fee is 1.5% of Gross Profit;
- If Base Period Gross Profit is between $300,000 to $400,000, the Advertising Fee is calculated using the following formula: Base Period Gross Profit multiplied by 0.045, minus $12,000, divided by Base Period Gross Profit, multiplied by Gross Profit for the current Accounting Period; and
- If Base Period Gross Profit is less than $300,000, 0.5% of Gross Profit.
|Interest Expense||Varies depending on amount financed by franchisor. The annual percentage rate is currently 5.50%|
|Indemnification||Varies, depending on loss.|
|Foodservice Operations||Varies, depending on cure costs.|
|Maintenance||Varies, according to particular store and equipment.|
|Premiums||Varies, depending on premium received.|
|Training||Varies, depending on type of training offered and location.|
|Inspection and Testing||Cost of inspection, if applicable, and cost of test.|
|Early Termination Fee||$5,000|
|Service Fees||Varies, depending on service provided.|
|Mistery Shop Fees||$6.50-$13 per shop.|
|Close Out Fee||$200|
The above information has been taken from the FDD of 7 Eleven. Year of FDD: 2016
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