Dark Secrets Owning a 7-Eleven Franchise
Secrets the 7-Eleven franchise does not want you to know! Top 8 reasons why you may not want to own a 7-Eleven, how much a 7-Eleven franchise owner makes, how much the franchise costs and more.
Entrepreneurs Franchise 500 has 7-Eleven listed at their #9 top franchise!
1. Nine out of ten 7-Eleven Franchise owners say running their store has negatively affected their health. How bad does a business have to be to say it is ruining your health? Why though? The National Coalition survey of 7-Eleven franchisees covering issues facing their business 82% cited staffing, more on that in a moment. Eighty-seven percent said their job is more difficult than it was five years ago, and the majority of 7-Eleven owners agreed with the statement, “The effect of running my 7-Eleven business has negatively impacted my physical health, mental health, and/or family well-being" . Let's look at those staffing challenges.
2. Staffing. 7-Eleven will tell you great things about their proprietary hiring tool "Hire Right" that it makes it easy for franchisees to hire. Yet the recent survey of 7-Eleven owners indicated 98% of franchisees using the tool still had people ditching interviews, and 95% say they are having to personally work more shifts, and overnight shifts than usual. Many states are raising the minimum wage and because franchisees have to pay up to 59% of their gross profit to corporate, and they are required to open 24/7, these payroll increases in many cases just can't be covered by franchisees. A statement from 7-Eleven franchisee coalition lawyer Eric Karp states “There are few options available to 7-Eleven franchisees who will be burdened by rising labor costs. Either they will have to work more hours themselves or lean heavily on their families to work in their stores,”
3. Micromanaging. Ever walk into a 7-Eleven store and its too hot or cold? Don't blame the store owner as they don't even have the authority to change it! All stores temperatures are literally controlled by 7-Eleven corporate office in Dallas. So not only does corporate make decisions on your inventory, your hours, products you sell, Pricing on gas and goods, but they also control your body temperature.
4. The 7-Eleven franchise contract is allegedly so one-sided and deceptive the NCASEF has asked the Federal Trade Commission to make changes to the franchise rule which they claim has led to misleading disclosures, undisclosed risks, built-in conflicts of interest and opportunistic behavior. Eric Karp a lawyer for the collation speaking about the 7-Eleven contract.
states “I’ve never in my 35 years seen a more opaque, top-down, my-way-or-the-highway franchise system,”
5. Low Earnings. You'll pay 7-Eleven corporate a minimum of about 50% of your gross profits and that amount goes up the more money you make. Most franchises reward you the more you make the less you pay in royalties, and typically have a single digit royalty around 7%, 7-Eleven starts at 48% going up up to 59%. How much does an owner make from that? It varies depending on location but Jas Dhillon who owns a very busy location in California since the 1990's has sales over 2 million per year. Jas and his wife both work the store and their after expenses profit for the business? $25,000. If you wonder why you see a lot of owners working their stores now you know why. If you want to renew your contract with 7-Eleven after your contract expires it will cost you $50,000. If you don't pay, 7-Eleven gets to sell the store again.
6. Little corporate investment in stores. Let's be honest, 7-Eleven stores have looked the same forever. Many stores just look run-down and tired. Since 2006 7-Eleven parent company has spent $28.3 billion in 39 separate business acquisitions, without investing much in many of their existing franchised stores. Sixty percent of owners said it had been more than a decade since their store received a physical upgrade worth at least $10,000.
7. Conflict of Interest. 7-Eleven has been investing billions in gas including buying Speedway for 21 billion, and the company makes great margins on fuel. As noted previously 7-Eleven controls pretty much everything including the gas prices at a store level. Corporate allegedly keeps prices higher locally than surrounding fuel stations. So 7-Eleven makes more money, but store owners get far fewer people coming to the store to buy merchandise which is their main profit center. 7-Eleven franchisees only make 1.5 cents per gallon on gas, so they feel corporate is fighting against them with the focus on gas.
7B - Crazy night shift behavior. (see video)
When asked if it were possible to sell their stores and salvage their investment 71% of owners said yes they would.
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Пікірлер: 100
Worked night shift for 7-Eleven, this can happen at ANY location sadly. I nearly got my head blown off while mopping the floor. (Random drive by)
@kenrose2523
2 жыл бұрын
Unless you're really in a messed up financial situation, I would have just quit on the spot. It is not worth losing my life for any employer(especially those that pay barely below minimum wage)
@coreyanderson7424
Жыл бұрын
I work at 711 now, and a part of me worries.
Lot of these people looking to buy franchises, need to listen to you for a reality check.
@vickipedia3253
2 жыл бұрын
I just did!! Thank goodness
I’m so glad That your channel provides very informative advice thanks.
@FranchiseCityOnline
2 жыл бұрын
Thanks for watching!
There are 5 7-11s in my area. The one dude that owns them gave up and locked up the store tight between 8pm and 7am. He's trying to sell, no luck.
@FranchiseCityOnline
2 жыл бұрын
Be interesting to see if he gets disciplined for closing!
@E4439Qv5
Жыл бұрын
@@FranchiseCityOnline almost certainly
We got a new 711 here about 2 years ago. It was great, great staff, great deals, you name it. ut I noticed changes there a few months ago and over heard the cashiers staying how the owner opened a new store and wanted them to work there. I think some other "drama" was going down too. But the store as a whole went to $#!T!!! They didn't even have hot dogs. Coffee lids were dirty, I mean just gross. There were not deals either, I had to pay full price for coffee. the horror. hahahaha. I think in this case it was a bad business move having the employees move to another store, because a lot of them quit. I don't know why the owner wanted another store but they should have just kept this one the way it was because now it sucks and I don't go there anymore.
Rising Labour costs. Perhaps a lot of these businesses have been effectively bust for years, were it not for the previously available cheap labour.
in my area, if you need fast $$$, get a job at 711. Turnover rate is FRICKING HIGH as hell. Like new faces every 3 or 4 days.
I own multiple 7-eleven locations in NYC. Company has reinvested in automated coffee systems and other qsrs are coming in near future. The only issue is variable profit. They used to have 50/50 profit split but its variable.
I would worry about my employees working the overnights not just me.
@FranchiseCityOnline
2 жыл бұрын
Me too, sadly that's not how everyone thinks :-)
The most depressing part is that they take ~ 50% gross margin on lottery. If a store does $5000 / day sales of lottery, it means that operator needs one employee on the lottery machine. Now 6% gross margin in NY will give the operator $300 / day. Now that extra person on lottery machine - lets say 18 hours ( instead of 24 hours) is 18 * 15(min wage) is 270. Looks like profitable- 300-270= 30/ day. But guess what -NO-, because 7-11 takes 50% of gross margin on lottery too ( where gross margin is only 6%). Basically operator put a guy on lottery machine to be in negative gross profit. Disgusting.
@FranchiseCityOnline
2 жыл бұрын
Wow - very helpful information thanks for sharing.
I was living in Thailand a couple of years. Every time there was a franchise in an area running great. 7 eleven opened their own 7 eleven, with a big parking almost next to the franchise 😬
711 in our neighborhood has a problem with keeping fesh goods in store. Ive gone there each time to find mold on certain products. Expired chips and even yogurt. I even know the store manager by name. They've only been open for 6 years. I stopped going there.
I work at a 7/11. Corporate gives our store no chance to succeed. We aren't staffed or given the hours to keep the coolers stocked.
This very useful advice thanks
@FranchiseCityOnline
2 жыл бұрын
Thanks for watching!
Where I live in Altoona PA, we have Sheetz. They’re all corporately owned, they’re in 7 states and coming to Michigan in 2023. Their food quality is excellent, overall service is excellent, they’re famous for their clean bathrooms and how well they treat their employees. If they ever decide to franchise out stores, they should buy into Sheetz
I had my business doing very well when the approached me many times begging to switch my store to 7-eleven. He literally told me that I have cleaner , better customer service and full of inventory. But, he also said an important clue that customers like the brand more than anything. They were changing 11% back then +++. They will come inside and take everything out and even the floors and bring their own equipments and merchandise and advised me to sell everything for half price. They even bring their own ATM where they keep all the fees from that. I heard they open one store every 2 hours around the clock and I believe a Japanese company owns them. Thank you for sharing the important information
@bestprice1776
2 жыл бұрын
Buy Bitcoin, you will make more
@chaz000006
2 жыл бұрын
@@bestprice1776 Not lately, and with more countries looking at banning it, not in the foreseeable future.
@FranchiseCityOnline
2 жыл бұрын
Great info! Thank you. And yes, Japanese company Seven & i Holdings bought 7-Eleven in 2005. Many franchise owners claim it was at that time that things started going downhill.
@bestprice1776
2 жыл бұрын
@@chaz000006 here is a fact... The Bitcoin network currently transfers more total dollars than Visa. You obviously don't realize how big Bitcoin already is and growing larger every day.
@bluejedi723
2 жыл бұрын
@@FranchiseCityOnline at the 711 1/4 mile from my house, they are selling a lot of Japanese branded items. Example- the 10 oz of foldgers coffee you brew at home in your coffee pot they have in the sad little "grocery" section- has Spanish, English AND japanese directions
2 Million dollars reveneu and 25k profit??????? Are you nuts??? I have a store in a third world country that dont sell half of that and i think i earn more than this. This is insane! Why they dont break the contract and use their own name?
@hassanbazzi3545
2 жыл бұрын
You think that would be the solution but breaking the contact you would lose everything including the property. 7-eleven are protected by lawyers and too big to mess with. It is so sad
@edwinbetancourt3958
Жыл бұрын
@@hassanbazzi3545 most franchisees aren't the property owner dude...neither is 7-11. They pay a lease. I know because I'm a franchisee.
Very valuable video
@FranchiseCityOnline
2 жыл бұрын
Thanks for watching!
I am a 711 franchise owner for the past 14 years and own multiple stores. I Agree with everything you say here. But why do people keep buying these stores? Why? Also how is 711 even considered a franchise with the micro managing business model that they have? We literally dont even control the thermostats in the store. In fact we don’t even have thermostats in the store. 711 from there corporate offices in dallas controls it. I don’t even pay my own bills in the store. So I don’t know what and how much things cost. Also 711 charges full franchise fees everytime the store sells. Not transfer fees but full franchise fees. I do make money though. I guess that’s why I am in this business
@FranchiseCityOnline
2 жыл бұрын
Thank you for the comment!
@facteer
Жыл бұрын
Can I ask how much you make and it's okay if you don't want to disclose the correct amount
@RoshanAryal84
7 ай бұрын
I am interested to own may i need help ?
@ctobin22
7 ай бұрын
@@RoshanAryal84 sure anytime
@zonein9169
6 ай бұрын
How did you get started ?
And now that stealing $950 from a store is legal......
Did you break the story about “broken” ice cream machines at mcdonalds? That’s a real screw job!
@6:53 LMMMFFFAO!!!! 🤣🙃😂🤣🙃😂
Bob, I absolutely love your videos! I'm 68 and retired, but I thoroughly enjoy the videos nonetheless. I wish I would have had your advice during my working years. Keep doing what you're doing, and I'll do the same. Thank you!
@FranchiseCityOnline
Жыл бұрын
Thank you for the kind words and all the best in 2023! 🙂
I'm banking sales wise, over 100k a month. At the end of every month...I'm told the store makes no money🤷🤣 I receive zero compensation and on top of that 7-11 claims I owe them money. No wonder they're being sued all over the U.S. Check the pile of mounting lawsuits issued by unified franchisees in various states.
7-eleven just raised all stores fuel prices 15 cents higher than rest of the city today in San Antonio in an attempt too price gouge the market I am a store manager for a franchisee
@FranchiseCityOnline
2 жыл бұрын
Thanks for sharing!
7 Eleven's are big in Japan. It's like Tim Horton's in Canada.
@FranchiseCityOnline
2 жыл бұрын
true - much higher profits as well.
@whyisblue923taken
2 жыл бұрын
Convenience stores in general are big in Japan. Family Mart was huge before the expansion of 7 Eleven. They have the overworking culture and eating hot meals at the store thing going for them there.
This is why I buy private gas stations. I own multiple Mobil and Shell gas stations but with a private grocery store and own the property. I am able to maximize profits and not have to work having employees for everything since they all close at 12 am.
@FranchiseCityOnline
2 жыл бұрын
Thank you for the comment!
our 711 gas is always on par
I wonder how much 711 the corporation makes annually and I think that the store owner should keep 65 percent not 50 or less. Wow. They wouldn't make much money. Also, there needs to be way more advertising for deliveries and that's also doable. They need a whole new marketing strategy to make money.
Ok so 711 does not control the retail prices inside the store, as a franchisee owner I have the rite to mark prices up down anyway I like
Please give me your opinion concerning the Krystal burger franchise.
@FranchiseCityOnline
2 жыл бұрын
You can get (free) reviews and a lot more in 48 hrs if you are seeking a franchise! kzread.info/dash/bejne/enimqMeghbC5iqw.html
i didn't think we needed anymore.
@FranchiseCityOnline
2 жыл бұрын
7-Eleven holds the lease!
Homeless people like to loiter in front of 7-11.
@metaparcel
Жыл бұрын
Help'em out if you can.
Im a former Field Consultant and Zone merchandiser for 7-11. I won’t disagree with everything but I do disagree with the gas. Yes, 1.5 cent per gallon but franchisees also do not pay for any of the gas pump maintenance, fuel, credit card fees or structure maintenance, utilities.. etc . 7-11 corps pays all that. The FZ earns a commission cuz they literally do not occur any cost to operate the fuel station. lastly, FZs literally can earn over $12K a year in incentive, plus free products, national discounts and not to mention the use of a brand that’s existed over 90yrs. lastly, FZs 100% control pricing in their stores. They do not control fuel pricing because 7-11 owns the gas, the franchisees on the inventory. So, that’s just not true.
@edwinbetancourt3958
Жыл бұрын
Franchisees do not "own" the inventory. Your shit company charges interest on the inventory. Among the many magical charges and magical financial numbers they give out every month.
Yea the 7 eleven workers and owners are out of touch with the local area they're in.
Hi
I bought a 711, On 7/11... By 7:11pm I was out of business
Wow 2mil gross, but you have to give 1mil to the franchise, and you only keep 1% (25k) per year after expenses. That's really low. I wonder what the initial investment you have to put in?
@esingh7933
2 жыл бұрын
That’s not how it works, it’s gross profit. But still it’s still not a lot, the owner isn’t treated like a owner. It’s more like your a manager for 7-Eleven. They literally got their own security cameras and do many other things that they would do on employees working for them. You basically don’t own it. The Japanese destroyed the franchise model
@edwinbetancourt3958
Жыл бұрын
The initial investment depends on the location. It's not a cookie cutter deal for all locations. It depends on the sales volume and other factors.
Wow, horrible
5th comment
lol what in the world
Bitcoin is by far a better investment than a 7-11
@chaz000006
2 жыл бұрын
Not lately, and with more countries looking at banning it, not in the foreseeable future.
@bestprice1776
2 жыл бұрын
@@chaz000006 do some research... Bitcoin is the best asymmetrical asset to ever come along in our lifetime
@bestprice1776
2 жыл бұрын
@@chaz000006 JP Morgan chase said way back in 2017 Bitcoin was a scam, Ponzi, etc.... And all the time they were buying Bitcoin. Don't listen to what they say, watch what they do. They are not on your side.
@chaz000006
2 жыл бұрын
@@bestprice1776 Sure, they are out for your money, but if they don't convince you with verbiage, they'll get their government buddies to legislate it into illegality, so either way they win and you lose. Then they can tell you 'I told you so'.
@bestprice1776
2 жыл бұрын
@@chaz000006 multi billionaire Bill Miller has over 50% of his net worth in Bitcoin, Mr Wonderful from Shark tank has over 20% in crypto just to name a couple famous one....are you smarter than these people?