7-Eleven Start Up Costs

Many people are finding this blog with the key words, “7-Eleven Start-Up costs”, so I wanted to dedicate an entire post to the subject.

In January 2008, for the very first time, 7-Eleven, inc. unseated Subway as the #1 franchise on Entrepreneur’s: 29th Annual Franchise 500 list.

I think the reason they are finally #1 is a combination of a strong brand image, aggressive franchising in 2007 (1000 stores in the US),  and as compared to other franchises … affordable start up costs.

So if you are considering being a 7-Eleven franchisee, here are your options:

  1. Become a 7-Eleven Licensee
    • This means you will be paying 7-Eleven to license the use of the trademark in a particular region or territory.  This gives you the ability to build as many locations as you would like in that territory with almost complete control over every detail of the business. This was not what I was referring to when I said “affordable start up costs”.
  2. Become a 7-Eleven Franchisee
    • This means you will be paying 7-Eleven for the right to run a 7-Eleven store, utilizing the trademark and executing on all the things required by the franchise agreement.  This option gives you very limited control of the business, but provides steady sales and profits.
    • This is by far the most common option for most entrepreneurs.
    • You can not open your own location, you can only purchase an existing location from the company (or outgoing franchisee).
    • There are two main costs:
      • Franchise Fee – the money you pay to 7-Eleven, inc., this will be equivalent to 20% – 30% of they yearly gross profit of the specific location. The higher the store’s gross profit, the bigger the percent charge.
      • Goodwill – the money you pay to the outgoing franchisee for purchasing a franchised store. This charge could be anything that the outgoing franchisee wants to charge.  But to come up with an estimate I recommend either using 20% of store sales, or 3 years of the Franchisee’s net income. WHICH EVER IS MOST BENEFICIAL TO THE FRANCHISEE. If you are buying a corporate store there is no goodwill charge (this is typically a much more profitable business to purchase). 
    • The Inventory of a 7-Eleven is financed, so you do not need to worry about having additional money tied up.  If you do not want to have your inventory financed you could deposit additional funds into your 7-eleven account to avoid paying interest on the inventory.

Here are three rough estimates for franchised 7-Elevens with no gas: 

  1. Below average yearly sales volume – $900,000, 37%GP
    1. Franchise Fee = 0.20 * $900,000 * 0.37 = $66,600
    2. Good Will  = 0.26 * $900,000 * 0.37 = $86,580
    3. Total cost = $153,180
  2. Close to average yearly sales volume – $1,300,000. 36%GP
    1. Franchise Fee = 0.25 * $1,300,000 * 0.36 = $117,000
    2. Good Will  = 0.70 * $1,300,000 * 0.36 = $327,600
    3. Total cost = $444,600
  3. Above average yearly sales volume – $2,000,000, 35%GP
    1. Franchise Fee = 0.30 * $2,000,000 * 0.35 = $210,000
    2. Good Will  = 0.65 * $2,000,000 * 0.35 = $455,000
    3. Total cost = $665,000

The Franchise Fees listed here would be very close to the actual fee you will pay to 7-Eleven, inc. for stores with these sales and gross profit numbers, but as I mentioned before the goodwill is just an estimate of what I would expect an outgoing franchisee to charge.

If you are considering purchasing a 7-Eleven and would like unbiased answers to all of your questions as well as advice on specific store locations:

Contact me at: c-store-expert@greatconsult.com for a FREE e-mail consultation.

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46 Responses to “7-Eleven Start Up Costs”

  1. cstoreguru Says:

    Let me know if you need any help.

  2. sam Says:

    I am new to franchise business. So please excuse me if this is very basic question.
    why would I like to pay a good will if I can buy a store from 7-11 corporation without goodwill ? thanks..

    • cstoreguru Says:

      Sam, If you are in an area where there are many corporate stores for sale, it is much more advantageous to buy a corporate store. Many areas around the country are heavily franchised, with no corporate stores for sale, in which case you wanted to buy you would have to pay goodwill.

  3. sam Says:

    cstoreguru ,
    thanks for the response. Would it be possible to get a telephone consultation from you for lets say 15 minutes. of course I would compensate you for your time.
    thanks,
    sam..

  4. Joe Says:

    Please send information about 7-11, Subway, Blimpy, or other food and sundry franchise.

    I’m looking in an area that is within the major Baltimore-Washington corridor, surrounding area and including central Maryland and western Maryland region. Within one and a half hours of Columbia, Maryland.

  5. JJ Says:

    I am interested in comparison between becoming franchise for 7-11 and subway,specially around bay area, california.
    WHich one would have better profit? which one comes with less people mangement hassle?
    Thanks!

  6. A. McCoy Says:

    Does 7-11 Franchisees normally have the start up cost in cash or do many of them get loans or investors to loan them the capitol?

    I have 8,000 to start with. How far would i get with an investor to loan me the rest of the money? say with a close to average store?

    • cstoreguru Says:

      Many Franchisees find financing to get into 7-Eleven. A majority borrows money from friends and family, others are able to negotiate some seller financing from the outgoing franchisee. Unfortunately $8,000 is not going to be enough money for you to get started even with some of the lowest sales stores.

  7. keavan thompson Says:

    i would like info on stores for sale in the 95826,and the 95758,area codes,and what are the start-up prices,thank you

  8. parita Says:

    Is the 20% goodwill rule based on the gross profit or overall gross?

  9. derek Says:

    i wanna open a 7/11 in poconos pensylwania what woud be a cost to start i have 80000 thousand and considering take loan-thank you

    • cstoreguru Says:

      You can not just open a 7-Eleven. 7-Eleven corporate does the “opening”, you just need to get approved as the franchisee for that location. The cost will be at least $150K, but depending on the store could be significantly more.

  10. Aries Shen Says:

    Dones a goodwill fee include all facilities in a store such as POS machine, computer, shelves and etc. Thanks!

    • cstoreguru Says:

      It absolutetly does. That’s why you’re splitting your profits with corporate. They give you a completely operational store that stocked and ready to go.

      • Max Says:

        The goodwill fee has nothing to do with the fixtures and equipment unless the owner is including personal property like cameras. The franchise fee includes the store equipment and fixtures.

  11. ali Says:

    i need more information about opening up an 7-eleven so if you can just e-mail me that would be great thanks

  12. YP Says:

    about how much would u need to start a below average or average store

  13. magnet Says:

    you say that starting cost is at least about $150k. However if you are buying a corporate store it doesn’t have a goodwill. Therefore according to your calculation it should be about $66k. Also why did you multiply by 0.37 in the following equation,
    0.20 * $900,000 * 0.37 = $66,600

    you didn’t explain why you multiplied by 0.37.

    so if you are buying a corporate store can you buy it for below $75 k

    • cstoreguru Says:

      GP stands for gross profit, so %GP is the percentage of gross profit that 7-Eleven keeps from every dollar in sales.

      The comparison I have is kind of a moving target for the sake of realism … I assumed that you wouldn’t buy a low sales volume store with a low GP, and I assumed that you won’t be able to find a high sales volume store with a high GP.

      So .37 means that they’re keeping 37 cents out of every dollar in sales (from their $900,000).

      Lastly, yes it is possible to get a low volume corprorate store cheaper than $75K, but I hope you are not looking to buy yourself a job with a minimum wage salary :-)

  14. avery Says:

    anyone know to the startup budget necessary to operate a 7/11

    • cstoreguru Says:

      The main budget necessary is to buy it (around $300K-$500K depending on the store)… since 7-eleven finances the inventory , you don’t need special operating funds, you start making money right away. I would still have 3-6 months worth of expenses in your savings account, in case you have a bad audit.

  15. Marlene Dacken Says:

    Please advise what the potential profit would be say on a $900,000 per year gross profit store. Also I never did see the owner at any of these franchises. Is it true that owners end up being a worker, or buying yourself a job? I for one do not need a job I want to run a profitable business. Thank you.

    • cstoreguru Says:

      With a gross profit of $900K (not sales, but gross profit), a good franchisee will probably be making between $150K-$200K … depending on the amount of payroll the store requires. The owner is required to spend at least some time at the store (be available for weekly meetings with the field consultant and other). This kind of store would be the closest thing to a 7-Eleven Business vs a manager job, since you can afford to hire a full time manager. Good luck!

  16. Ephrem Says:

    Why is the good will fee for store number 2 highe?
    It looks three times higher than store # one.
    Thank you for your advise.

  17. WAIS HASSAN Says:

    I HAVE 25000$ AND I WANT OPEN 711 STORE IN OTTAWA ONT AREA ,IS 25000 ENOUGH THANKS

  18. adam mukher Says:

    How do I calculate the goodwill and franchise for a 7 eleven store that has 170k a month sales, with a GP around 37%.
    Thank you.

  19. sree nair Says:

    Am hoping to sell my 7 11 francise in colorado springs down town had it for over 2 y
    have to relocate out of colorado

  20. Pat Says:

    What should the goodwill be on a 7-11 in good area in montgomery cty md sales 1.7 mill a year gp37percent? What price should be paid for this store to 7-11 inc.

  21. Got one 7-11 Says:

    If you are willing to move North Texas DFW metroplex area there are plenty of Stores available from corporate 7-11 check it out on 7-11 website

  22. Anonymous Says:

    does the va help in any way?

  23. rhett g Says:

    Please don’t take this question as racist or anything other than a legitimate question. … why are most all of the 7-11 owners / management seem to be foreign? Mainly muslim, Saudi Arabian, etc.
    Do they have some sort of advantage over American born people?
    Special loans or financial help? …… I’m very curious. I just don’t think its a big coincidence. … I am interested in being a franchisee , but feel like I’m missing something.

    • cstoreguru Says:

      There are different reasons for this. Interestingly enough, 7-eleven used to be a very, very “white” dominated company, but over time, the convenience store business has become less and less glamorous and more and more work, which tends to attract hard-working foreigners, without an american education that are looking to make it in this country and often times have money to invest. Meanwhile, the “average american” (whatever that means) is working a regular job, has a small mountain of debt and has no money to invest.

  24. Poanne Says:

    Hello, I am interested in owning a gas station in general, but particularly a 7-11. Currently there is only ONE 7-11 in the entire city in which I reside which is also the state capital. What if I only wanted to apply the branding to an existing gas station. Also, I would like to avoid selling alcohol and cigarettes because the location is near 2 schools and 3 churches. Would 7-11 allow me to dictate what items I could sell in my own location?

    • cstoreguru Says:

      If you want to avoid selling alcohol and cigarettes than the convenience store business (at least the typical convenience store business) is not for you. You might be able to get with doing that in an urban convenience store that’s all about food, but not with a typical gas station store.

      In a typical store, if you’re not selling cigarettes and alcohol, you’re probably losing around 70% of potential sales (almost guaranteeing the failure of your store). 30% of sales are cigarettes, 15% are alcohol, while the other 25% is related business from customers that will go elsewhere for what they need. Every store is different, but these are the rule-of-thumb numbers.

      Maybe open a pizza place instead?

  25. Adam Says:

    Your examples in this article about start-up costs, and in your article about income potential, both exclude locations with gas sales. How does the sale of gas factor in? Is it run as a separate business with the petroleum supplier, or as part of the 7-Eleven franchise?

    • cstoreguru Says:

      In my area, there are very few gas stores so I don’t have many useful averages to share. Gas is a part of the business, not a separate business, but it works a little different. The franchisee earns $0.015 per gallon of sold gas, so the profit depends on how many gallons are pumped. For some stores gas can be a significant contributor to both direct profit and extra traffic in the store, while for others it’s more of a nuisance because the cost to maintain it cancels out the profits.

  26. Ali Says:

    I have $35,000 can i finance 711 from bank?

  27. Anonymous Says:

    I have about $83,000 to about $140,000. Would that be enough to get a store in the San Diego area? Also how do I pass their tests? Or what are they looking for in their interviews? I have many years in retail.
    Thanks D

  28. Kai Says:

    Let’s say; The store costs $ 100,000. If financing available, and what could be my front-up pay. What kind of loan, I can be qualified? If my credit score is over 700. Thanks

  29. Al Says:

    I’m thinking of purchasing a 7-11 store from corporate. Sales are around $1.2 mill and gross profits is around $490K. What would be my split? This may sound silly but the store is running 24/7 therefore, about how much time does a typical owner-operator work in a week? I am curious of the time because I would like to know if it is possible for a owner-operater to run more than one 7-11 store.

    • cstoreguru Says:

      Some owners work 14-16 hour days, others barely work at all, it all depends on you, your abilities of hiring/training employees, and the amount of money you’re trying to make.

      You can certainly run multiple stores. I have see franchisees run as many as 4 personally, but I think there are some that have even more.


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