Do You Really Want to Invest In A Low Volume Store?

There’s been quite bit of discussion (and controversy) regarding 7-Eleven’s program to assist low volume storeowners. Is this “new and improved” program any better than what franchisees had been offered in the past? Is the assistance being offered by 7-Eleven truly helping the low volume storeowner stay alive? No one really knew for sure, until now!

I and three other very experienced 7-Eleven franchisees (all of whom are still in the 7-Eleven system and whom have been franchisees for half a decade) have conducted extensive research into the matter, and the facts are now available and ready to be shared with you.

We spent endless hours analyzing every single detail of owning a low volume store so that current franchisees (and friends and family who are considering buying into the 7-Eleven system) will have a true understanding of what they are getting into should they decide to purchase a low volume store. Our intention is to educate you so you can make a smart, informed decision on your own as to whether or not a low volume store is worth your investment of time and money.

The chart’s calculations are based on the very real assumption that even for a low volume store, it will take at least 240 hours per week to operate it in a manner that suits SEI’s requirements. Because of the store’s poor sales, after all the expenses have been paid, there will barely be anything left for the franchisee. The only way that he or she will be able to increase his or her income is to save on labor costs by taking on more hours.

Those considering buying a low volume store need to realize this very important fact: he or she is going to be working many, many hours in order to make any kind of living from this type of store. I must point out that the calculations in the chart don’t include the annual supplemental income given by SEI (approximately $9,000 if the store’s annual sales are $1.1 million at 32 percent GP). There has been no commitment from SEI that they will continue offering the supplemental income after 2015 and, without it, a low volume storeowner would not survive.

Further, the net annual income of $4,878, which is shown at the bottom of the accompanying chart, would nearly disappear after the franchisee pays for health insurance and taxes. The only way for a franchisee to make money with a low volume store is to save on his or her payroll and work as many hours as he or she possibly can.

Working 60, 70 or 80 hours a week? What kind of a life is that? You be the judge.

If anyone is interested in learning more about how the numbers in the chart were calculated or would like further information on the research that was conducted, please contact me. We have much more detailed information, and I would be happy to share the details with you.