The Evolution Of The 7-Eleven Brand

Eric H. Karp, General Counsel

The saying “the only constant is change” is often attributed to the ancient Greek philosopher Heraclitus. It essentially means that everything is in a state of constant flux, and nothing remains static or the same forever. So it is with your franchisor.

7-Eleven has come a long way since it introduced the convenience store concept in 1927, began using the 7-Eleven brand in 1946, started offering franchises in 1964, was acquired by its current parent through a tender offer in 2007, purchased 1,030 Sunoco stores in 17 states for $3.3B in 2018, acquired the 3,800 units in 36 states Speedway chain from Marathon Petroleum Corp. for $21B in 2021, and acquired an additional 204 stores from Sunoco in April 2024. The three most recent events have further changed the profile of the system, both internally and compared to its competitors.

As of this writing, the merger talks between the parent companies of 7-Eleven and Circle K have advanced to the point of having signed a non-disclosure agreement, engaged in due process disclosure of information, and solicited bids to sell 2,000 stores in the United States in order to increase the likelihood of antitrust clearance from the Federal Trade Commission. The parent company of 7-Eleven has also announced plans to take the U.S. operations public in the first half of next year. By the time you read this, there may be much more consequential news on this front, so there is no reason to speculate on what the next few months may bring. But it is useful for franchisees to understand the metamorphosis of the system, from viewpoints both within the system and outside the system.

Outside The 7-Eleven System

According to the most recent report from Convenience Store News, the convenience store market in the United States consists of approximately 152,000 stores but remains highly fragmented. Only 30 percent of those stores are operated by the top 100 chains, and just 19 percent by the top ten chains, in each case measured by the number of locations.

The top three chains are 7-Eleven, Inc., Alimentation Couche-Tard, Inc. (ACT)—the parent company of Circle K—and Casey’s General Stores. These top three chains account for a little more than 21,000 locations and approximately 14 percent of the convenience store market. Notably, 7-Eleven has more than twice as many locations as ACT, and ACT has more than twice as many locations as Casey’s General Stores. No chain ranked below #3 has more than 1,500 locations.

While approximately 60 percent of the 7-Eleven stores are franchised, Convenience Store News reports that Circle K has 603 franchised stores and Casey’s has none. Significantly, the convenience stores rounding out the top ten chains, occupying ranks 4 through 10, have exactly 1 franchised store among them. The import is that although the percentage of 7-Eleven locations that are franchised has decreased in recent years, the system is still an outlier in that more than 60 percent of its U.S. locations are the subject of franchise agreements.

Inside The 7-Eleven System

Here are some observations about how the 7-Eleven system in the United States has changed in material ways that are highly relevant to franchisees:

• For 10 years beginning in 2011, the number of franchised stores in the United States climbed steadily, reaching 7,474 in the year of the pandemic, 2020. Since that year the number of franchise stores has declined by a total of 245 locations.
• The number of company owned locations jumped significantly with the acquisition of the Sunoco chain in 2018 and the Speedway chain in 2021, resulting in more than 5,200 company owned locations at the end of that year, which included the Sunoco, Speedway, Stripes and Laredo Taco locations However, 7-Eleven closed 737 company owned locations in 2024, dropping the total number of company owned locations for the second year in a row.
• These acquisitions changed the profile of the system from one that had 39 percent of its locations with gas in 2017 to 64 percent in 2024, a dramatic increase by any measure.
• The 2025 FDD of 7-Eleven states that as of the end of last year, it operated 3,801 other convenience store locations under names other than 7-Eleven … primarily under the “Speedway” and “Stripes” brands. We do not offer franchises for any of these other convenience store brands, but we may convert some of these other stores to 7-Eleven stores and franchise some of them after conversion.
• Another result of these changes is that the percentage of total locations that are franchised fell from 89 percent in 2017, to 80 percent in 2018 and 58 percent in 2021. In part as the result of the closing of corporate stores in 2024, the percentage of locations that are franchised now stands at 60 percent.
• The number of corporate stores sold to franchisees was on a steady downward trend from 485 stores in 2016 to 161 stores in 2022. The number of stores sold to franchisees recovered slightly in 2023 and 2024 to 277 and 300, respectively.
• We define the Franchise Turnover Rate as the percentage of locations repurchased by 7-Eleven as well as those which were abandoned by the franchisee or which otherwise ceased operations. Over the last four years, the Franchisee Turnover Rate has averaged 7.6 percent per year while the number of franchised locations has declined by an average of 1 percent per year.
• The recent decline in the number of franchised stores taken together with the decline in the percentage of total stores that are franchised has resulted in a parallel decline in the percentage of the franchisor’s revenue that is derived from the gross profit split paid by franchisees. The percentage of such revenue declined from more than 15 percent in 2016 to 4.9 percent in 2024, a more than 2/3 reduction.

While these changes are indeed material and, in some cases, transformative, they may pale in comparison in the event there is a transaction with ACT or if the parent company of 7-Eleven moves forward with its plan to take the U.S. operations public in 2026. Either way, these events are quite consequential to every franchisee in the United States, and we will continue to carefully monitor them and report everything that is made available to us.