7-Eleven Continues Franchise Push

Most Baltimore c-stores converted; new design under construction in Florida

Published in CSP Daily News

BALTIMORE -- Convenience store giant 7-Eleven Inc. is continuing its push to convert most company-owned and operated stores into franchise operations, reported The Baltimore Business Journal. In the Baltimore area, 15 stores remain available to interested franchisees, 7-Eleven officials told the newspaper. That is 16% of the 7-Elevens in the Greater Baltimore region.

Of the company's 380 stores in the Baltimore-Washington, D.C., region, 305 stores are already franchised. In Washington, D.C., 75 stores are available for franchise ownership, said the report.

The [image-nocss] c-store chain initiated its conversion plan two years ago. It has since converted 4,100 stores, or 75% of its 5,600 stores, to franchises. The company told the Business Journal that it hopes to complete its conversion plan by 2012.

"7-Eleven's movement to convert its company-operated stores offers an opportunity for people in the community to franchise their own business using an established, successful system supported by a world-class retailer," Desi Desormeaux, 7-Eleven franchise sales manager for Virginia, Washington, D.C., Maryland and North Carolina, said in late October.

Dallas-based 7-Eleven provides the land, building, equipment and a turnkey operation for its franchisees. The average upfront, total investment for a 7-Eleven franchise is between $175,000 and $250,000, although this amount may vary significantly by store and region of the country. This investment is based on the store's actual sales history and includes the store's inventory, supplies, business licenses, permits, bonds, cash register fund as well as a franchise fee, the amount of which may vary depending on the store's location.

"7-Eleven offers a proven business model and well-recognized brand," said Desormeaux. "Ours is an entry-level franchise that provides a variety of services for a new business operator. Franchisees have a vested interest in knowing their customers and communities and are in the best position to understand and respond to their local retail needs, which builds customer loyalty and sales."

Unlike other franchise models that take a percentage of sales, 7-Eleven shares in the store's merchandise gross profits.

In other company news, a 7-Eleven convenience store sporting a new design is coming to The Pointe, a major retail center under development in Poinciana, Fla. Construction of the 2,940-square-foot store with stacked stone knee wall and decorative rooftop pediments is expected to start in the next 60 days and be complete in time for a planned February 2009 opening, according to Doug Stevens, a senior real estate representative in Florida for 7-Eleven Inc., which has more than 200 stores in the Greater Orlando area.

In addition to providing fresh sandwiches and donuts daily, the 7-Eleven at The Pointe will also feature five fuel islands with 10 fueling stations, including diesel.

Belleaire Development Group of Clearwater acquired the site for 7-Eleven and is developing the property, which was purchased from Avatar Properties Inc., developer and leasing agent for The Pointe. Belleaire has handled the acquisition of at least 30 Florida sites for 7-Eleven over the past 10 years.

The 7-Eleven retail outlet will join a 148,000-sq.-ft. Lowe's home improvement store that anchors The Pointe, as well as a 7,350-sq.-ft. AutoZone that opened in August and a 2,500-sq.-ft. Colonial Bank currently under construction, according to Hank Yunes, vice president of commercial operations for Avatar. Avatar is the developer and primary homebuilder in Poinciana, a 147,000-acre master-planned community in northwest Osceola and northeast Polk counties. It is negotiating with several other national retailers considering parcels at The Pointe, said Yunes.

7-Eleven operates, franchises or licenses more than 7,500 7-Eleven stores in North America. Globally, 7-Eleven operates, franchises or licenses more than 34,800 stores in 17 countries. During 2007, 7-Eleven stores worldwide generated total sales of more than $46.6 billion.