Rating Scale:

***** (5-Star): "Excellent Opportunity"
**** (4-Star): "Good Opportunity"
*** (3-Star): "Average Opportunity"
** (2-Star): "Below Average Opportunity"
* (1-Star): "Poor Opportunity"

Company:

7-Eleven Stores

Centercourt Rating:

***** (5-Star)

Business Type:

Franchise

Description:

Retail Convenience Store.

Mailing Address:

7-Eleven Stores
2711 North Haskell
Dallas, Texas 75204

Telephone:

800-255-0711

Fax:

214-841-6776

Web Site:

www.7-eleven.com

Direct Link Topics:

Program Summary
Program History
Franchise Components
Rating Summary

Program Summary:

7-Eleven is the leader in convenience retailing with more than 18,000 store locations around the world, including approximately 5,000 in the United States. The company believes in giving customers what they want: a reliable selection of quality products and services at fair prices, a speedy transaction and a clean, safe and friendly environment in which to shop.

7-Eleven was the first U.S. retailer to offer 24-hour service and the first to offer cups of coffee to go. Today, 7-Eleven stores have the largest network of ATMs in the world.

The company also is famous for many proprietary products, such as Slurpee® frozen-carbonated beverage, the Big Gulp® fountain drink and the Big Bite® hot dog, which are valuable amenities of the franchise. As customers' demands and tastes change, so does the variety of products available at 7-Eleven. Thanks to a growing system of combined distribution centers and "partner" commissaries/bakeries located around the country, many 7-Eleven stores now offer customers fresh products, such as sandwiches, entrees and baked goods, which are made and delivered daily.

In 1999, the company plans to open about 200 new stores in major markets throughout the country, and many of them will be available for franchise. Like older 7-Eleven locations that were remodeled during a recent nationwide refurbishing effort, these new stores will feature wider aisles, brighter lighting, new layouts and high-tech security systems. Many will have gasoline and offer pay-at-the-pump credit card readers.

7-Eleven franchisees receive initial training on how to operate and manage their stores and receive extensive ongoing support. Management personnel visit with franchisees -- at least once every week for a several-hour appointment -- and counsel with them on all aspects of their business. While the company provides experienced assistance and advice, store business decisions are made by the franchisee.

7-Eleven owns or leases the land and building on which the store sits, provides the store equipment and pays the utilities. The 7-Eleven franchisee leases or subleases the building and equipment from the company as part of the franchise agreement but purchases and maintains the store inventory.

Program History:

In 1927, an innovative employee began selling milk, eggs and bread from his Dallas ice dock as a convenience to customers. Since then, that humble ice dock has grown into more than 18,000 7-Eleven stores in 19 countries, including approximately 5,000 U.S. stores.

7-Eleven joined the world of franchising in 1963. Today, more than 2,900 U.S. stores are operated by franchise owners, and approximately 35 percent of those franchisees operate more than one 7-Eleven store. Presently, franchise opportunities are available on the West Coast, in the Northeast and Southwest and in the Great Lakes area.

Franchise Components:

7-Eleven franchisees pay a one-time initial franchise fee which averages approximately $51,000, depending on the store's gross profit (this may vary significantly depending upon the area) Franchisees are required to make an initial cash payment to Southland in an amount equal to the cost of the store's initial inventory, supplies, business licenses, permits, etc., a portion of which 7-Eleven will finance. The company will also finance the franchisee's continuing operating expenses. A typical initial cash payment for a 7-Eleven franchise is about $73,000, which includes a down payment on the store's opening inventory and related expenses.

If a prospective franchisee wishes to purchase an existing 7-Eleven franchisee's interest in his or her franchise, the prospective franchisee must negotiate a price with the current franchisee. This is called a "goodwill" sale, and the "goodwill" price is paid to the existing franchisee is over and above the typical initial cash payment of $73,000.

7-Eleven franchisees are responsible for payroll, inventory and cash variation, supplies, business taxes, licenses and other controllable in-store expenses. 7-Eleven may provide various forms of advertising for the stores, as well as its products and services and support for many of the franchisee's promotional and community relations endeavors.

Franchisees receive individual contractual indemnification to help protect them from many of the risks against which most small business persons must insure, often at considerable expense.

Another unique aspect of the 7-Eleven franchise system is that the company offers a 180-day "trial" or "test-drive" period, except in the state of Ohio. A 7-Eleven franchisee may terminate the franchise agreement during the first 180 days of operation and receive a refund of the franchise fee, minus training expenses paid by the company, as well as the current amount of his or her investment in the business. On the other hand, 7-Eleven is committed to the franchisee is firm from the first day of operation and does not have that termination option.

7-Eleven franchisees are independent contractors, and the company's relationship with them is multi-faceted. The company is not only a franchisor, but also serves as landlord, financing source, business advisor and record keeper to the franchisee.

The initial franchise fee may vary for each store. The method of computing the franchise fee is fully disclosed in the Uniform Franchise Offering Circular. Franchisees who are selling the franchise interest in their 7-Eleven stores may also seek an additional payment. Franchised stores are only available in certain states.

This is not an offer to sell or solicitation of an offer to buy a franchise. Franchises are not available to residents of North Dakota, South Dakota, Minnesota, Wisconsin, and Hawaii. An offer is made by prospectus only. 7-Eleven is an equal opportunity organization.

Rating Summary:

7-Eleven's Franchise Program has been rated at a 5-Star (*****) franchise offering by InterAct Concept Development Corp., a franchise and business opportunity management and marketing firm with 12 years of experience in the franchising industry.

The factors that led InterAct to assign its highest franchise program rating include high scores involving the following components:

1. 7-Eleven's proven track record as an industry leader with high trademark recognition.

2. Extensive ongoing support to franchisees including initial training and continual once a week meetings. In addition, 7-Eleven serving as landlord, financing source, business advisor and record keeper to the franchisee.

3. 7-Eleven's unique 180 day trial or test-drive period offered to franchisees (except in Ohio).

4. Excellent growth potential to franchisees for multiple units