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Test Drive

If you don't like your new 7-Eleven, return it.
July 1, 1999
URL: http://www.entrepreneur.com/article/17980

Officially, it's called the "180-Day Termination and Refund Program," but The Southland Corp., franchisor of 7-Eleven convenience stores, likes to call it a "test drive." Since 1981, franchisees in every state but Ohio have been able to take the helm of a fully equipped store with the option of terminating the franchise agreement any time during the first 180 days--all that's required is 10 days advance notice. The franchisee then receives a refund of his or her current investment and fees, less any training expenses incurred by Southland.

It may sound like a temptingly easy way out, but the success rate of the program is a testament to its effectiveness. Of the 300 to 400 7-Eleven stores franchised each year, less than 5 percent take the termination option. The program is good for both the franchisor and franchisee, according to Margaret Chabris of Southland. "The purpose is to take some of the risk out of the franchise process," she explains. "And it helps the company ensure that people who decide to franchise a 7-Eleven store want to stay for the long term."

Chabris also believes 7-Eleven is uniquely suited to this kind of arrangement because Southland controls the land, building and equipment. "If a franchisee chooses to take the refund," says Chabris, "the company can take back the property, building and equipment, and re-franchise that location." Offering an offramp for franchisees may be the best thing since, well, Slurpees.

Contact Source

7-Eleven Inc., (800) 255-0711, http://www.7-eleven.com