You may see more than one store along the same street. Yet for all their familiarity, not everyone knows that it is possible to own your own 7-Eleven store.
Not only is 7-Eleven the world’s largest convenience store chain with more than 71,000 7-Eleven stores across 17 countries, but it is also a franchise chain with over 400 stores of which about 50% of stores are currently franchised. The first 7-Eleven franchise store in Singapore opened in 1988.
Here’s what you need to know before setting up a 7-Eleven store in Singapore.
It Costs At Least $70,000 To Join As A 7-Eleven Franchisee
According to the 7-Eleven Singapore website, joining as a 7-Eleven franchisee in Singapore would require at least $70,000, comprising a Franchise Fee and working capital.
The one-time initial Franchise Fee starts from $30,000 depending on the performance of the store that you intend to take over/ franchise.
They also require an initial working capital of $40,000 for the cost of the store’s initial inventory, supplies, business licences, permits and cash register fund. This also acts as a security deposit.
These payments must be made in full after signing the Franchise Agreement and 7-Eleven does not provide any form of financing. The contractual agreement period is for 5 years.
To be a 7-Eleven Franchisee, you also have to meet some basic requirements.
- Singaporean or Permanent Residents above 21 years old
- GCE ‘O’ level qualifications or equivalent and above
- Excellent credit and ability to fulfill financial requirements
- Apply as a Sole-Proprietor and be a GST registered business
- Able to manage the business full-time and not operate another competing business
Franchise Fee May Be Waived Under The Franchisepreneur Management Trainee Program (FMTP)
Under their Franchisepreneur Management Trainee Program (FMTP) for young entrepreneurs, 7-Eleven will waive the franchise fee for one 7-Eleven store.
To qualify under FMTP, the franchisee must be a tertiary graduate (diploma and above) with less than 6 years of work experience and a Singapore Citizen or Permanent Resident above 21 years old. They will have to place a $20,000 security deposit (refundable upon exit) and undergo a 6-month training programme.
7-Eleven Franchise Sales
The franchisee’s net profit is derived from this formula:
Gross profit + other incomes – 7-Eleven charges – franchisee operating expenses
Expenses are salaries and employee benefits, 50% utilities, shrinkage/bad merchandise, Inventory and cash variations, license and permit fees and other miscellaneous expenses.
7-Eleven Franchises Are Fully Operational Stores
The choice of a franchise store depends on the units available after the applicant has been selected as a franchisee. You will be offered a list of stores to choose from and you can select on the preferred store locations. Pre-booking or pre-selection of franchise stores is not allowed.
There is no monthly royalty fee payable to 7-Eleven. Franchisees are fully responsible for the daily operations of each store and are required to commit 100% to the business. Therefore, 7-Eleven franchisees cannot be gainfully employed during their franchise period.
Franchisees Must Attend A 12-Week Training Programme And Will Be Coached Continuously
To ensure franchisees know how to operate and manage a 7-Eleven store independently, they are required to attend a 12-week comprehensive training programme. This includes in-house administration, operations, management and team member training. The training deposit is $5,000 and is refundable upon the completion of training or when you take over the store.
The training program will be conducted on a full-time basis and attachments to the training store on a 6-day work week and rotating 8-hour shift basis (7.00am to 3.00pm, 3.00pm to 11.00pm, or 11.00pm to 7.00am). All franchisees are required to attend the training in full.
Franchisees are responsible for hiring their own team members.
7-Eleven Assesses The Suitability Of Potential Franchisees
While no retail background is necessary as training is provided, becoming a 7-Eleven franchisee requires assessment. Some of the qualities they look out for include:
- Good interpersonal skills
- Keen business sense
- Excellent credit and ability to fulfil financial requirements
- Ability to recruit, manage and motivate own team members
- Being at ease using e-technology and equipment
- Preferably with managerial or supervisory experience
- Ability to effectively embrace change in a fast-paced retail business environment
- Willingness to put in hard work with the franchisor’s guidance
Why Set Up A Franchise VS Setting Up Your Own Business?
The biggest difference between setting up a franchise and setting up your own business is the amount of support and precedence you have. With a new business, you have full autonomy over every aspect of your business, but it also means that you have to figure everything out from scratch – there are no templates or models to rely on. With a franchise, there is already a proven business model, supply chain, training and other forms of support depending on the franchisor.
For first-time business owners, the support a franchise provides can be valuable. However, the drawback is that you would not be building your own brand but riding on the franchisor’s brand or trademark, which in this case is 7-Eleven.
Additional Reporting by Angela Teng.
This article was first published on June 6, 2022 and updated with new information.
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