7-Eleven corporate can take 50 percent of a franchisee's revenue.
A 7-Eleven store closed its doors around the end of July, and is now boarded up. It was located on University Avenue at Herman Avenue in North Park, across the street from CVS Pharmacy. Before 7-Eleven moved in, the storefront was occupied by a financial company branch office.
That store had been dealing with shoplifting for sometime, according to an employee I talked with a while back after I saw a shoplifter leaving the store with some snacks. She said they could do nothing about it; employees couldn’t chase after a petty thief, and calling SDPD was useless for such crimes.
In recent years I have noticed homeless individuals and shady characters hanging out in front of this store, or close by. That could have scared away customers, wanting to avoid unpleasant confrontations.
Angela Landsberg, executive director of North Park Main Street said, “I do not know if 7-Eleven has plans for another operator to take possession of the property. The former 7-Eleven has a 10-year lease that was not fulfilled.” Landsberg hopes the company will keep “the boarded-up building free of trash and graffiti until the space is filled.”
René Vidales, chair of North Park Planning Committee, told me: “My two cents is that they could not sustain their business without securing a liquor license. Their business model is probably set up that way. How many 7-Elevens do you know that don't sell liquor?”
Franchise City does not see a 7-Eleven franchise as a good investment for most people. The website advises: “Despite the relatively large investment you will make, typically $150,000 or more, 7-Eleven corporate will take close to, or in same cases, over 50 percent of your revenue. Franchise owners often find they have to work in the store themselves in order to make any money at all.”
You rarely see a Caucasian owner of a 7-Eleven franchise, due to the long workdays required. Quoting a lawyer for 7-Eleven corporate, Franchise City indicated: “7-Eleven has taken folks from Pakistan, India and Vietnam, taught them how to operate a store, and introduced them to the American economic system.”
The amount the owner will make varies by location and by other factors. But “a very approximate estimate is 5 percent of store sales, so a store doing $1 million in sales would generate about $50,000 for the owner,” says Franchise City.
Attorney Seth Kaplowitz is a lecturer in finance with SDSU’s Fowler College of Business. Kaplowitz addressed the importance of location: “A business can fail based on any number of factors ranging from pure management, financial stress, embezzlement, and/or poor location. If customers perceive that visiting the location is easy and convenient, that business will draw clientele. If the location of the business is perceived as inconvenient and more of a hassle than it's worth to make a trip to that location, it will be passed by.”
Corporate communications at 7-Eleven Corp. did not immediately reply for comment on this particular store closure. Their website states this about franchisees: “How well you operate your store and serve your customers will definitely impact your profit margin. Sometimes a store underperforms, and in these cases, 7‑Eleven does have a short-term income support program that provides temporary financial support if gross income falls below certain levels.”
Another North Park 7-Eleven is located at University Avenue and Texas Street. Unlike the closed store, it does sell liquor, beer, and wine.