Year Business Began: 1927
Franchising Since: 1964
Headquarters: Irving, Texas
Estimated Number of Units: 85,135
Franchise Description: 7-Eleven, Inc. is the franchisor. The franchisor’s direct parent is SEJ Asset Management & Investment Company, which is wholly controlled by Seven-Eleven Japan Co., Ltd. The franchisor’s ultimate parent is Seven and i, a Japanese corporation. Franchisees operate an extended-hour retail convenience store under the tradename and service mark “7-Eleven” which sells a broad array of products, including many not traditionally available in convenience stores. These products include an assortment of high-quality fresh food, hot food and proprietary beverage offerings, and private brand items. The stores generally operate every day of the year, usually 24 hours a day. There are two types of franchises offered:
- A Traditional 7-Eleven Store Franchise: The franchisor offers franchises for a single site that it owns or leases.
- 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.
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Territory Granted: The Franchise Agreement covers a single 7-Eleven store location. Franchisees will not receive any minimum territory. Franchisees will also not receive an exclusive territory.
Obligations and Restrictions: Franchisees agree under the franchise agreement to devote their best efforts to the store and to actively and substantially participate in the actual operation of the franchise. The franchisor may require franchisees to sell any interest they have in other businesses. If franchisees are married, the franchisor prefers that both spouses sign the Franchise Agreement and actively participate in the franchise business. If franchisees form an entity, the principals must sign the guaranty and actively participate in the franchise business. The store must carry all categories of inventory specified. Franchisees may stop carrying an inventory category only with the franchisor’s prior written consent. 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 maintain in the store at all times a reasonable and representative quantity of all proprietary products listed in the Franchise Agreement or that the franchisor otherwise lists in writing. Franchisees must carry at the store a reasonable and representative quantity of all designated nationally or regionally advertised or promoted products. Franchisees must comply with the franchisor’s merchandising and shelf life requirements for fresh foods.
Term of Agreement and Renewal: The length of the initial franchise term is 15 years. One renewal term equal to the number of years under the then-current franchise agreement for franchise renewals is available, if requirements are met.
Financial Assistance: The franchisor may finance the down payment and franchise fee in certain situations. 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). In addition, the franchisor must maintain a minimum investment in the inventory and other items it finances (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.
Estimated Initial Investment
Name of Fee | Low | High |
Initial Franchise Fee | $0 | $1,100,000 |
Training Expenses | $0 | $13,650 |
Down Payment for Opening Inventory | $20,000 | $20,000 |
Additional Opening Inventory | $42,000 | $240,000 |
Cash Register Fund | $2,500 | $15,360 |
Store Supplies | $1,000 | $3,700 |
Licenses and Permits | $7,150 | $11,000 |
Real Estate and Equipment | Covered in “7-Eleven Charge” (see FDD for more detail). | |
Insurance | $1,500 | $36,000 |
Grand Opening Fee | $8,000 | $8,000 |
Goodwill | Only applicable to incoming franchisee’s buying a current franchisee’s interest in a franchise. | |
Additional Funds During the First 3 Months | $60,000 | $180,000 |
ESTIMATED TOTAL | $142,150 | $1,627,710 |
Other Fees
Type of Fee | Amount |
7-Eleven Charge (Royalty) | Variable percentage of gross profit. |
Advertising Fee | The advertising fee is 1% of the gross profit of the store for the current month. |
Renewal Fee | $50,000 |
Audits | Varies. |
Interest Expense | Varies depending on amount financed by franchisor. The annual percentage rate is currently 9.5%. |
Indemnification | Varies, depending on loss. |
Foodservice Operations | Varies, depending on cure costs. |
Maintenance | Varies, according to particular store and equipment. |
Replacement 7-Eleven Equipment Fee | Varies. |
Premiums | Varies, depending on premium received. |
Initial Training | Varies. |
Ongoing 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. |
Mystery Shop Fees | $9.00 - $10.25 per shop. |
Close Out Fee | $200 |
Management Fee | Not to exceed 5% of gross profit, plus out-of-pocket expenses. |
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