7-Eleven claims that the unique financial arrangement of its franchise opportunity is advantageous for its franchisees.
7-Eleven franchisees pay a sizeable upfront franchise fee and deposit (about $190,000, on average) for the right to operate the store and split the ongoing profits with the franchisor.
According to the 7-Eleven franchise brochure, “7-Eleven obtains and bears the ongoing cost of the land, building, and store equipment. Then, we lease or sub-lease a fully equipped, ready-to-operate 7-Eleven Store complete with inventory; however, the franchisee does not obtain any ownership interest or equity in the store site or equipment.”
This arrangement, according to the brochure, “provides a business person the opportunity to franchise a nationally known convenience store for a moderate investment.”
Some franchisees strongly disagree.
They contend that the structure enables 7-Eleven to collect huge fees from and transfer business risk to new franchisees, then terminate them and collect new fees from new groups of franchisees… a predatory practice known as franchise churning.
Is 7-ELEVEN Exploiting Its Franchise Owners for Profit?
An UnhappyFranchisee.Com commenter named Roger, who claims he has owned a 7-Eleven franchise for more than a decade, writes:
Plain and simple truth:
Look at it this way.
Joe DePinto [president and CEO of 7-Eleven, Inc.] needs to increase his profits.
He obviously can’t just force people in stores to increase sales. Best way for him to show profits is “inventory turn” Franchises are inventory, he needs to get them in and out of the system as much as possible. Why??
Because when a new franchisee comes in the system he pays his $150,000 franchise fee. He leaves in 5 years, they get another $150,000 from the new franchisee. Best way to get people out of the system is by breach of contracts, threats and force them to work beyond their means and set unrealistic standards. Write them up for everything and steal profits and make the franchisee work work work until they are fed up.
7-Eleven is opening new stores at every corner. Yes that is stealing your sales as mentioned above, but guess what.. 7-Eleven gets their franchisee fee of $150k and they still get their sales as they rotate through franchisees :-) Wonderful idea!!
7-eleven owns 9000+ stores and still opening in the U.S. If Joe DePinto get get 2% of franchisees to rotate through the system by driving them nuts and working them until they simply cant work anymore, he rotates through 180 store franchisees a year. 180 x 150,000= $27,000,000 in extra profits while keeping the stores clean and franchisees working. Its a plain and simple scam. Once you’re in you have no choice but to work your behind off and get your money back.
My story: I purchased my store with okay sales. A year after owning my store my market manager came and told me they are pulling my gas pumps. Ever since my pumps have been pulled (5 years ago) my sales have never been the same, im not making any money and I’m working constantly. The only money I make is when I pay myself 10 dollars an hour to pick up a shift and in the summer months I’ll make a couple thousand. But aug-jun… forget about it. Worst Franchise EVER! Trust me! Its a shame!
… This is the WORST WORST WORSSST franchise to own. DO NOT even consider franchising a store. 7-Eleven is not your business partner, they are your boss and treat you like dogs. Constant threats for breaches because you threw out 10 sandwiches, but accidentally missed one.
You have weeds in your parking lot. The list just goes on. This company is a joke, they treat you like dogs and have absolutely ZERO respect when talking to you. All they know how to do is yell and threaten you. I have talked to so many franchises, NOBODY IS HAPPY! The list just goes on and on.
TAGS: 7-Eleven, SEI, 7-Eleven franchise, 7-Eleven franchise complaints, 7-11 franchise, 7-11 franchise complaints, Seven Eleven franchise, franchise complaints, 7-Eleven franchise cost, 7-Eleven complaints, 7-11 complaints, franchise churning, Joe DePinto