1 Our Beginning...1927 The Convenience Concept Give the customers what they want, when and where they want it.
2 Global Brand Strength...the Largest Convenience Chain in the World
3 Do you have what it takes? 7-Eleven Franchisee Attributes Hiring and supervision experience Capable of building infrastructure and developing an English speaking sales team in addition to the language of the local community Ability to implement company programs & strategies to maximize sales and profits Ability to adapt to market and company changes Strong financial savings, portfolio, credit rating for the investment Desire to work with people and support the local community Desire to work within a controlled franchise system Embrace the 7-Eleven fresh food model
4 Fresh Food “Portable Fresh Food” 7-Eleven Business Model / Retailer Initiative Customer Satisfaction “The Customer” Technology “The Core” Retailer Initiative “Item-by-Item” Demand Chain “Daily Delivery” Services “Financial Convenience” Team Merchandising “Product Innovation”
5 Your Investment One time Franchise fee One time Gasoline fee (if applicable) Down payment on initial inventory and supplies Initial cash register fund State and local licenses, permits and bonds Goodwill (if applicable)
6 The Financial Picture Your Share of Gross Profit Net Merchandise Sales Cost of Goods Total Gross Profit = 7-Eleven’s Share of Gross Profit - Less expenses = Your Net Income - Less expenses = 7-Eleven Net Income
7 Your Responsibilities Payroll, Payroll Taxes Workers Compensation Insurance Business & Inventory Taxes Cash & Inventory Shortage Your share of Credit Card Fees National Advertising Fee Business Licenses & Bonds Interest Expense Telephone Janitorial & Laundry General Maintenance & Upkeep of Store Equipment Common Area Maintenance Store Supplies Share of Gross Profit – Expenses = Your Net Income
8 7-Eleven’s Responsibilities Land, Building, Equipment, Rent & Property Taxes Utilities (water, gas, electric, sewer) Record Keeping Quarterly Audits Individual Contractual Indemnification Building Maintenance & Repairs Business Consulting POP/Advertising Materials Market Research & Product Selection Price & Vendor Recommendations Ongoing Store Support Services Share of Gross Profit – Expenses = 7-Eleven’s Net Income
The 7-Eleven Franchise System 7-Eleven offers two types of Franchise systems: Traditional and Business Conversion Program (BCP) – Under the Traditional Franchise Program, 7-Eleven incurs initial and ongoing costs of the land, building and equipment and leases a turnkey business to the Franchisee – The Business Conversion Program allows property owners to maintain control of their real estate while taking advantage of the 7- Eleven Business System The BCP Franchise program is designed to accommodate stores with or without gas –The program focuses on optimizing merchandise gross profit; 7-Eleven does not share in your gas business
11 What is BCP? Is a means of new store development Is a means of new store development Provides opportunity for independent convenience store operator to convert their operation to a 7-Eleven franchise Provides opportunity for independent convenience store operator to convert their operation to a 7-Eleven franchise Both parties invest in remodeling & updating store to 7-Eleven image Both parties invest in remodeling & updating store to 7-Eleven image Allows independent to obtain all the benefits of 7-Eleven (Brand, Services, Merchandising, ETC.) Allows independent to obtain all the benefits of 7-Eleven (Brand, Services, Merchandising, ETC.)
13 Qualification the same as traditional but must also: Qualification the same as traditional but must also: –Qualify as a business owner –Have a site that qualifies for a 7-Eleven –Current 7-Eleven Franchisees must qualify via the Multiple Store Guidelines with various levels of Management approval Qualifications
14 Site Standards Store size conforms w/ability to deliver business system Store size conforms w/ability to deliver business system –At least 1800 square foot selling space – less must qualify under an exception process –Business system = daily delivery of fresh food, night time deliveries –Must be a 24 hour x 7 day operation Conflicts will be evaluated on case by case basis Conflicts will be evaluated on case by case basis
16 Franchise Fee and Deposit Due at agreement signing $25,000 initial Franchise Fee Deposit of $25,000- $40,000 depending on type of conversion. (existing c-store with inventory, non-existing c-store, major development) $35,000 minimum net worth maintained at all times
17 7-Eleven Charge Gross profit based royalty Gross profit based royalty –No charge for the first 3 months –Thereafter, 25% Add 2% for certain business arrangements Add 2% for certain business arrangements –Alcoholic beverages in Maryland
18 Benefits of Franchising a 7-Eleven Name Recognition Established Business System A Leader in Support & Training Daily Distribution of Fresh Foods Leader in Technology Innovation Continual Operational Support Over 80 Years of Business Experience
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