Anyone Bought, Managing or Running A 7-Eleven?

[Damaz6052]

May I ask why you need to be part of a franchise?

Dont you think the location you mentioned would be ok with your own convenience store name?

Shore,you dont have their group buying power but look at other positives.

We had a private mini-mart at our petrol station. Sales about 10k per day, maybe 15-20k on the weekends. Profit about 20k+ per month.

A few years ago 7/11 approached us about putting a franchise on our our site. We ended up with a "company run" store where we take a percentage of sales as profit, with an option to buy in any time within the next ten years.

We have nothing to do with the day to day operations of the store & no costs for development of the property.

Sales are about 2mil baht per month (not including bill payment services) (roughly a five to six fold increase on our privately run mini mart) and we are paid about 40k per month in "rental".

For those interested, there are many threads concerning 7/11's in this forum and business forum above on TV. Just use the TV search function with 7/11,seven eleven & petrol station etc. as key words.

TV member chang_paarp is very knowledgable on the mini mart business & small business in general. A search of his posts in this forum will also deliver a wealth of information of people looking for comparissons between franchises & do it yourself operations.

Cheers,

Soundman.

When you say petrol station do you mean one with pumps etc?

[soundman]

Correct, one with pumps (bowsers).

[torrenova]

what is them secret to have a 5/6 fold increase ?

I would have to say that "brand recognition" has a major effect on sales in the minimarket game.

I completely agree with this.

There is a Thai guy in Buriram who I have known for 18 months or so and who has a non branded mini mart. I often sit with him for a couple of beers and we chuck business ideas around. Quite recently he moved to the end of a row of shop houses from the middle to gain a better lease and more development potential.

I ran through numbers with him on many things and did some comparisons with 7/11 and what sticks out is the simple fact that because of the homogeneity of 7/11 stores and their product range, people head there and will make additional purchases at prices which are over those which they could get elsewhere. Additionally, you cannot just copy 7/11. For instance, say a particular 7/11 is doing massive trade on a certain slush drink, you cannot just put the same machine in your store and sell exactly the same thing for 75% of the price because few if anyone will come. In Thailand, 7/11 has achieved a sort of upmarket quality status.

However, I was was amazed at just how much money rolls in from what on the face of it seems to be very few customers at all. He takes about 15-20k a day and makes around 45-50k a month. His major outlay is stock, he and his wife are the only "employees" and his daughter helps out when university is on holiday. He doesn't seem to be able to increase business and he's doing everything including running mobile phone top ups as a re-seller.

I think a 7/11 would work very well in his location on the edge of town, on the main road with some parking available. However, even assuming he had the 3m, why would he go in for it if he could only get the same money (as per previous posters) ? I guess he would need to pick up at least a minimum 33% return on his 3m on top of his 600k or so which would be around 1.5m or 125k a month and it doesn't seem as though he could earn that through 7/11 ?

[Sam Drucker]

I think a 7/11 would work very well in his location on the edge of town, on the main road with some parking available. However, even assuming he had the 3m, why would he go in for it if he could only get the same money (as per previous posters) ? I guess he would need to pick up at least a minimum 33% return on his 3m on top of his 600k or so which would be around 1.5m or 125k a month and it doesn't seem as though he could earn that through 7/11 ?

One reason that immediately jumps out at me is: Does he feel secure that it is not likely (or inevitable) that a 7-Eleven will eventually open near his store anyway? And if one did open, what would be the impact to his business? In his situation, it might be a good move simply from a defensive standpoint, in order to hold onto the business he already has (and which would also no doubt grow if he franchised with 7-Eleven.)

[RAZZELL]

One question...what happens at the end of the franchise period?

[hl2u]

@gilbreth: please send me the soft copy too.

[aussiexpat]

Hi, based on a recent post in The Nation, 7-Eleven is offering financing for privately run franchises. I wanted to re open this thread, but also close some loops by developing the attached profit model. I do not want to address any other side issues (e.g., exclusivitiy, wife's education, etc). I simply wanted to try to figure out if this is a good investment. Can anbody shed light on the attached?

I am only considering Type C, the Type B seems to be "buying a job." I own several businesses here in Thailand, and from what I can see, this seems like a great payback (13 months) with big upside if one can get a fairly decent location. Could anyone in the know review the attached and point me in the right direction if I am missing something? Can I assume that CP let's you keep all incremental profits since a franchise has paid the "store management fee?"

I will be pleased to send the soft copy for any constructive comments!

Thank you much!

I think you're issing a major point which is the ongoing franchise fee of the gross profit margin (I think it 56% in Thailand). The Australian websites states the following:

7-Eleven receives 57% of the gross profit to pay for:

• Rent and building outgoings
• Equipment costs
• Utilities (heating, cooling, lights and water)
• Specified maintenance
• Book-keeping and generation of monthly financial reports
• Quarterly merchandise stocktake
• Financial reports
• Merchandising expertise, product selection and cost negotiations
• Advertising and promotional support
• Point-of-sale material for promotions
• General business advisory assistance
• Payroll processing and payslip generation
• Insurance for certain losses as well as public liability

Franchisees receives 43% of the gross profit to pay for:

• Payroll
• Worker's compensation and superannuation
• Telephone costs
• Business license, permit and taxes
• Cleaning services
• Landscaping and security expenses
• Cash variation
• Bad Merchandise (product spoilage)
• Inventory variation
• Miscellaneous store expenses
• Store supplies

Consering you only keep 43% and still have to pay wages (I know wages are cheap), however I'm starting to wonder how viable it is.....

[Svadhistana]

Unfortunately the thumbnailed report is completely wrong!

I have the official numbers from CPAll (7Eleven).

First of all you get 54% of the gross margin (which is 20%, not 27%). Second,the op.exp. are about 140-150 KBaht. Therefore the net profit (with 1,500,000 monthly revenues) are about 15,000 baht only!

Fortunately an average 7Eleven has revenues around 2-2,5 MBaht. Therefore the net profit can be between 70 and 120 KBaht a month.

[garrfeild]

Thanks for the responses, much appreciated!

I am looking into a location ATM. Here in town there already is a Seven Eleven, but I am pretty sure the place could handle another one. (how does the company determine if there's enough capacity? Do they just count traffic?) The location I'm looking at is right next to a school, and right around the corner from a well visited market. The market is crowded from 4 in the morning until about mid day. The street sees reasonable traffic throughout the day as well.

It's not the companies problem how many 7-11's are in a given area, they want your 1.5 or 3 million baht. that is their only interest. they are not lossing money if you don't make any money. All in all a bad idea.

Better to open your own convenience store emulating 7-11 if that is really what you want to do?

Edited August 17, 2011 by garrfeild

[randy723]

if it cost you 1.5 million for the Francie and which is good for 9 years and you make 20kto 30k each month it would take you 5 years to get your investment back. In other words after 9 years it comes out that you really only made about 12k to 15k per month. That is if you are very lucky and do make 25k per month. You could take  the 1.5 million and put it in a   mutual and make at least 8% guanteed  which would be 10k per month and no work, no head aches, no law suits, no worrying about 7/11 opening another store near you. Plus you do not have to open a corporation which would cost 20k plus corporation tax each year

What do you think? 

[George5]

hello! is anyone engaged in trading on the seven-eleven franchise in Thailand?I am interested in approximate investments and net profit after all expenses.I read all the statements above.they are more motivating than frustrating.however, this information is quite old.now someone can tell you how these things are in Thailand.judging by the fact that the Family Mart retail chain has sold out, perhaps this market has somehow changed?is it worth buying a franchise from 7/11 now?I would like to hear the figures of expenses and profits from those who are currently engaged in this

Edited November 10, 2023 by George5