7 Eleven

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 customer and provide fresh take-out foods, groceries, beverages, candy, gasoline (at more than 2,400 locations), dairy products, non-food merchandise, specialty items, certain financial services, lottery tickets and incidental services. 7-Eleven stores generally operate 24 hours a day every day of the year (except, at the franchisee's option, Christmas Day) unless a local law requires the store to close during certain hours. 7-Eleven Express stores are very similar to a standard 7-Eleven store, but are generally smaller in size and carry fewer items.

 

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 offers financing for all or a portion of the franchise fee or down payment if a qualified applicant meets all loan qualifications and displays a financial need that, in the franchisor’s sole opinion, makes it difficult for the qualified applicant to pay all of the initial fees.  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).

 

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 your franchise agreement.  The store must carry all categories of inventory specified.

 

Total Number of Units: 44,700 units.

 

Investment Tables:
Initial Investment:

Name of Fee Low High
Initial franchise fee $0 $1,000,000
Training expenses $0 $9,000
Opening inventory $33,200 $68,100
Cash register fund $300 $5,000
Store supplies $250 $2,000
Licenses and Permits $1,000 $7,000
Real Estate and Equipment Covered in “7-Eleven Charge” (see Ongoing 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
ESTIMATED TOTAL $34,750 $1,121,100

 

Ongoing Fees:

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 Gross Profit"):
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.
Audits Varies
Interest expense Varies depending on amount financed by franchisor. The annual percentage rate is currently 5.25%.
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
Close Out Fee $200

  

The above information has been compiled from the FDD of 7-Eleven along with online sources.

Year of FDD: 2012

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