Why 7-Eleven Franchisees May Have to Pay Another $50,000 and Work on Christmas

Would you pay $50,000 to maintain profit rates? That's the conundrum for 7-Eleven franchisees.
Why 7-Eleven Franchisees May Have to Pay Another $50,000 and Work on Christmas
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Entrepreneur Staff
Associate Editor, Contributed Content
2 min read

is a staple of the Entrepreneur Franchise 500. In 2017, 7-Eleven was ranked as our top franchise, and this year it’s No. 2. However, according to an article by The , the tension between the company and its franchisees has been growing for years.

Franchisees cite several reasons for that tension, including requirements that force franchisees to carry 7-Eleven-branded items -- which tend to carry higher margins, but often underperform compared to name-brand competitors -- and an evolving revenue-sharing model.

“It’s no longer, ‘You make a , we make a dollar,’” Michael Jorgensen, the owner of three stores in Florida, told The Times.

7-Eleven has offered its franchisees the chance to lock in current -sharing rates, with a couple of catches:

  1. Franchisees must agree to keep the store open on Christmas. According to The Times piece, only 1.7 percent of franchises close for Christmas, and it’s one of the company’s best-performing days of the year.
  2. Franchisees must pay a $50,000 franchise renewal fee. That number can, in some cases, be more than the total investment for a 7-Eleven, which ranges from $37,550 to $1,149,900. According to The Times, regulatory filings show that for the 65 stores in the Northern Chicago region, average revenue was between $971,000 and $1.8 million last year; gross profits were between $353,000 and $655,000. However, those numbers can vary depending on store, location and more.

What would you do in this situation? Would you be willing to pay $50,000 to maintain profit-sharing rates or not?

Related: 24 Top-Ranked, Affordable Franchises You Can Buy for $25,000 or Less

7-Eleven franchise information

  • CEO: Joseph DePinto
  • Business headquarters: Dallas
  • Franchising since: 1964
  • Initial investment: $37,550 to $1,149,900
  • Initial franchise fee: $10,000 to $1,000,000
  • New units in 2017: 3,336 units (5.7 percent)
  • Training: 240 hours on the job, 24 hours in the classroom
  • support: Co-op , ad templates, national media, regional advertising, , SEO, website development, email marketing, loyalty program/app

Related: The 5 Best Pizza Franchises You Can Start Today

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