Are there people here who are running a 7-Eleven convenience store? I am looking into the options of opening a store with my wife. I've read on the company's website the franchise fees and startup costs should be between one and three million baht, which seems reasonably on par with what it would cost to start a small(ish) business to original concept.

I am wondering about returns though. After paying all the bills and taxes, how much are you really left with? I am by no means looking for a 'get rich quick' scheme, but considering the investment, I would hope to make a reasonable living. Would it be possible to make, say, upwards of 100,000 THB a month from an average 7-Eleven?

I find it pretty difficult coming up with a 'guesstimate' based on the 7-Elevens close to my home. I know they're doing alright though. I'm gonna have myself a chat with some local owners soon, and perhaps sign up for one of the info meetings if I'm liking what I'm hearing. Thought I'd try for info here first though.

A friend of mine looked into it. He was knocked back due to the fact his wife is a ex bargirl. I don't know your circumstances but that is something to consider.

The "Type B" franchise, which requires 1.5MM baht investment, will earn the franchisee between 20k-30k baht per month, and no more, based on meeting specific target results. You are essentiall buying a job as a manager in this scheme, and no more.

The "Type C" franchise, with a 3MM baht investment (and you also provide the location, owned or leased) pays 7-11 44% of gross margin, with the franchisee keeping 56%. Depending on your location, you COULD make a decent return, but it is far from guaranteed. And you would have no exclusivity with 7-11 for you area, meaning 7-11 could open another location within close proximity.

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.

@ Bubblehead: Hah, yeah, I can imagine not wanting to shell out the cash if you're not entirely sure about your partner. My wife is well educated, I met her at work, we've been married for over a year now and we have a son. I guess it's a slightly more stable relationship that way.

Just looking for options to start our own business on a down-to-earth budget. Not entirely decided on the 7-Eleven idea yet, but definitely something I'll be looking into more.

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.

Rchapstick,
I was wondering where you got your info from. Is this info available to anyone? Once you come up with the franchise fee and are in business for awhile can it be sold or are you on a time limit ?(you buy the franchise for a set amount of time then can renew the contract) I tried to get some info by e-mailing the 7=11 franchise person but did not receive a reply. Also, if the average 7-11 makes 20 to 30,000 bht per month does that include paying someone to manage it or would the owner have to work the store? Any hinfo you might be able to give me would be helpful. Thanks.

My GF looked at 7-11 before deciding to pursue another buisness start-up. I sat in on the presentation with her ... it was all in Thai but easy to decifer (with some help from the GF after translating the important bits).

To your questions:

• We did not get inot the contractual obligations per se, but it is my understanding that a Thai corporation can own a franchise, and as such the franchise could be sold. The contract is for 9 years. I would also suspect that the 7-11 could veto an ownership transfer if they did not approve of the new franchisee.
• A "Type B" franchise can only make between 20k-30k. For a "Type C" there is no upside or downside limitation. The franchisee would be considered the manager, so if you farmed out the job to someone else, then your return would diminish accordingly.

Let me know if you have other questions.

Thank you for the reply. It seems that if you have someone mange the store for you at the going rete for 7-11 manager of 15000 if they assume the owners duties that it would leave a paltry 15000 income in the best of circumstances. At worst you might break even. Not a good return on a 1.5 million baht investment Then there is the head ache of worrying about whether your employees, including the manager, are ripping you off. You could run the store yourself but if you are not Thai you can't even pour a cup of coffee for a customer. There has to be a better way to make a decent living there. n

Just to clarify, for the Type "B", the 1.5 million is not what is really "at risk". of the 1.5M, 0.5M is for the franchise fee and related start-up costs, and 1.0M is for a working capital account (0.5M inventory, 0.5M other WC) that is returned to the shareholders at the end of the contract.

My impression fo the Type "B" franchise is this is the sort of thing some Hi-So guy would buy for his wayard kid to teach them responsibility, and to give them a managerial job. It is a lousy return on investment, but a cheap way to help junior with a bit of resume building. As a legit buisness opportunity, only Type "C" would quality, and only in a superb location.

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.

For someone looking for a location, I suggest Nong Hin, Loei. The nearest 7-11 is 30 kilometers from here. You would have at least one good farang customer.

This is what i did when i was considering a 7-11. Make more money and have to do absolutely nothing.
Now our goal is to 'score' as many small pieces of land in strategic locations. Beats working and managing.

My understanding of the company's policy is to allow a franchise to open in a new area to establish the brand - then if it does well 7-11 look to open there own store in the same location. In Pattaya and Bangkok you will see 7-11 and the other names close to each other where both franchise and company owned stores are being run in competition. Location is everything - and as the poster above states if you can lay claim to the land that is attractive to these stores you are onto a winner.

Not entirely correct Cuban.

7-11 has in mind a "capacity" for a store, somewhere in the neighborhood of 2.5mm baht per month of sales (though this can vary based on the size of the store, number of registers, etc.). Once the store begins to exceed capacity, then they look to open another store nearby. The idea being that once capacity is exceeded, then customer service will suffer and people will go elsewhere.

A good example is the two shops literally across the street from each other on Asok, just norht of the Grand Millenium. The shop on the west side of Asok, a franchise, does better than 3mm amonth, while the company owned store on the east side does about 2.5mm baht per month. Both are very busy, and very profitable. Would not surprise me if 7-11 would look to open another shop nearby soon.

One the other hand, the shop on Suk Soi 23 does better than 4mm a month. 7-11 would love to open another location nearby, but cannot get a lease.

Hi, thanks for the insight - it does make business sense for the good of the brand. To the casual observer (me) it does look like making money off of someone else's effort to risk the first store. The problem with getting the second lease I understand - the owners of the availible plots will see the money they can charge increase if there is a profitable store already in the locale. A lesson for would-be owners indeed.

So would CP give the "ground breaking" franchisee the opportunity take on another store?

Would they put in another franchise or a company store in the second or subsequent site?

I think that depends on a number of factors. But for a franchisee that CP likes, and who has the capital and is willing to take on the additional investment, then the answer is they would let the franchisee take on a second store nearby.

If, however, the franchisee is not seen in a favorable light, or cannot/will not make the investment, then CP will move quickly to set up a company store, if they can get a favorable lease.

I looked into that 4 years ago and realized I could not make it.

7-11 decides who works in there, wife could not be a manager as she had no retail experience.
It's not possible to bring family members to work in there and a minimum of high school certificate is required for employees.

Other threads on this forum later showed that the returns are rather modest...all the work and you end up with about 40K per month, like an English teacher.

[quote name='soundman' date='2008-04-30 05:46:34' post='1954690']

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".

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

[quote name='rchapstick' date='2008-05-10 02:32:49' post='1972787']

7-11 has in mind a "capacity" for a store, somewhere in the neighborhood of 2.5mm baht per month of sales (though this can vary based on the size of the store, number of registers, etc.). Once the store begins to exceed capacity, then they look to open another store nearby. The idea being that once capacity is exceeded, then customer service will suffer and people will go elsewhere.

The 7 near my place has to extend and buy the block next door

This post has been edited by simcity: 2008-05-13 10:11:10

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

so do i.
i go to 7 11 coz i know they have fresh stuff to sell.

i bet thsoe thai ma and pa stores still selling coke cans from 1999..........lol.

This post has been edited by ralph444: 2008-05-13 12:33:02

How is 7-Eleven about dealing with foreign franchisees?

One impression I've gotten since looking at their website a few times over the years is that maybe they are not really welcoming to foreign investors/franchisees? The website has no English language toggle to read about franchising. Anybody out there that has actually dealt with them, and has an opinion on this?

http://www.7eleven.co.th/corp/franching_ho...a_franchise.php

CP group, which holds the license to the 7/11 franchises in Thailand does not take on foreign franchisees at all.

They only take on Thai franchisees, and are actually quite selective, i.e. only university graduates etc...

We farangs are just not that important. I looked at the Australian 7-11 site and they didn't have a "Thai toggle" .. funny that!