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ubonr1971

Is the 7-11 franchise out of control. A street in Pattaya has one ever 50m to 100m

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I was shocked to see one street in Pattaya (Khopai Rd which is 5min from Soi LK metro area) that has a 7-11 convenience store every 50 to 100m. I laughed at one point when I saw a very small soi separating two  7-11 stores right opposite each other on the same side of the road. I couldn't believe how many there were in that one street alone. Are they all owned individually or by one rich dude? 

 

I assume anyone buying this franchise takes on the risk that the governing body will allow any other business owner to open another store right next door. Why would they do this to their investors. The profitability of each shop will evidently be reduced the more 7-11's there are in the street. I dont understand the business model to be honest.

 

From what I understand the business owner has to pay 35% of profits to the central office. Also each shop has to buy the stock from the central office who can dictate the prices. It seems to be a high risk business to invest in when the governing head office allows one to be opened virtually next door to each other. Very daft business model or am I missing something?....

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I wonder how many ‘bing-bong’ noises are going off at any given time Here.I bet its a fair few!

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10 minutes ago, URMySunshine said:

i.e if you do well then they will steal your thunder after you took the risks and determined the market. 

got it in one

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26 minutes ago, impulse said:

 

The theory behind the franchise is that they have proven the market, they've developed the sourcing and distribution and inventory system.  Basically, you're buying a complete system that generates cash.  If you work it, you bought a job.  If you hire someone to work it, you've bought a cash flow- contingent on some smarts on your part.

 

The franchisees all know that going in...  

 

I would love to know what the average franchisee gets pa and for what investment. 

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2 hours ago, URMySunshine said:

CP have been ruthless and efficient operators to become the second richest family in Thailand in just 90 years. There are a lot of busy fools running a franchise who find out the hard way that it is a stacked deck and that the house always wins even if they don't.  

Yes I would never buy a franchise business Thailand or anywhere  else. You never make a living. It is the same in the western world. Most of them go bankrupt and left with nothing.

 

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Look in Jomtien too. There is one every Soi from the Police Box to Soi 9...and all of them are making money.

 

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15 hours ago, URMySunshine said:

I would love to know what the average franchisee gets pa and for what investment. 

One of my near neighbours has 4 7/11 franchises. I don't know what his annual returns are but he doesn't live a lavish lifestyle.

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