7 Eleven in the UK - Do They Franchise?

28/12/2018 08:00 | Start a business

7 eleven uk

Within the US, 7 Eleven are the biggest retail chain and a popular choice among consumers in all 50 states. Over the last few years, the business has also developed a strong international presence. However, this doesn't include the UK. Here, we take a look at whether the 7 Eleven brand utilises the franchise model and whether it is likely to move into the UK market anytime soon.

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What is 7 Eleven?

7 Eleven is an American chain of retail stores and one of the most recognisable brands in the world. Though the business is now Japanese-owned, it has its headquarters in Dallas, Texas and is an established part of the US retail landscape. Originally called Totem Stores," the business changed its name in 1946, as a way of advertising its new opening hours from 7 am to 11 pm, every day of the week.

The 7 Eleven chain's parent company is known as Seven-Eleven Japan and has its headquarters in Tokyo, Japan. In total, it operates approximately 66,580 stores in as many as 17 countries. With its distinctive branding and logo, 7 Eleven businesses are instantly recognisable and can be found on street corners, in shopping centres, and near public conveniences in towns and cities across the globe.

A brief history of 7 Eleven

7 Eleven can trace its origins all the way back to 1927 and the establishment of a small grocery store in the storefront of an ice house owned by the Southland Ice Company. Eventually, Joe Thompson, one of the original backers of this enterprise, was able to buy out the entire Southland Company and begin converting locations to grocery stores throughout the Dallas area. The following year, a grocery store owner bought a traditional Alaskan totem pole and placed it outside of their store. It attracted such attention that other store owners soon decided to follow suit and many stores even began to trade under the Totem Stores name.

The 30s and early 40s were a time of hardship for the company, with both the Great Depression and the Second World War threatening its very existence. However, when the brand changed its name to 7 Eleven in 1946, its fortunes began to change, too. In the 60s, the business added a number of locations to its Texas operations and also expanded into California and Nevada. In 1964, the chain adopted the franchise model and acquired 126 Speedee Mart stores in California.

The 1987 stock market crash caused enormous financial problems for the organisation and resulted in its American owners transferring a majority ownership share to its Japanese partners. The 00s was a period of rapid domestic and international growth, with thousands of new stores opening across the US and abroad. In 2011, the chain celebrated the opening of its 40,000th store, and two years later it opened its 50,000th.

Does 7 Eleven franchise?

7 Eleven has offered franchising opportunities since 1964, though the company has pursued an aggressive buy-back policy in recent years. This has resulted in some conflict with franchisees who feel that certain stores have been targeted for takeover by the 7 Eleven corporation to stifle dissent amongst franchisees. Consequently, the relationship between franchisees and the franchisor has become strained. When a new CEO, Joseph DePinto, took over, this relationship was stretched to breaking point. His approach to leadership has resulted in numerous lawsuits being filed by franchisees. More recently, franchisees critical of DePinto have been the alleged targets US immigration services. Many franchisees believe this to be orchestrated by 7 Eleven management. Despite these issues, 7 Eleven remains a popular franchise amongst US investors, and DePintos reign has otherwise been perceived as successful.

Where does 7 Eleven operate?

7 Eleven now operates in 17 countries, with a significant presence in Asia, Europe, and Australia. The takeover by Seven-Eleven Japan has resulted in an aggressive expansion in Asia in particular. This has involved the opening of stores in Hong Kong, China, Malaysia, Singapore, Taiwan, Thailand, and Vietnam, among others.

Does 7 Eleven operate in the UK?

7 Eleven opened a number of stores in London in the mid-80s. However, by 1997 the company had stopped trading in the UK and had closed all operations. Since then, there have been regular rumours that the company is considering re-entering the market, though no move has been made. In 2014, the company confirmed that it was considering opening new stores in the UK. However, these new stores are yet to materialise.

7 Eleven UK Franchise

If 7 Eleven were to move back into the UK market, its highly likely that the company would utilise the franchise model to do so. In recent years, this approach has proven useful in a variety of international markets and allows for rapid expansion. However, breaking into the UK market may prove particularly challenging for 7 Eleven, as consumers are already well served by a number of large retailers, as well as a plethora of independent, corner shop retailers.

What does the future hold for 7 Eleven?

The next few years may prove decisive in determining how 7 Elevens franchisor-franchisee relationship plays out. Tensions are particularly high at the moment, and if action isnt taken to diffuse them, its highly likely that the 7 Eleven franchising system will suffer. Considering the crucial role franchisees played in growing the business in the post-war years, such a development would be worrying for all involved.

Are there franchised alternatives to 7 Eleven?

Though there are very few franchises that can compete with the brand recognition and financial success of 7 Eleven, there are plenty of opportunities in the wider retail sector. For instance, high street electronic cigarette stores are becoming increasingly popular and profitable, with both the London Vape Company and Vapestore growing at a remarkable rate. Discount stores like Cash Converters are also thriving, and the Build-A-Bear franchise is also performing spectacularly well. Finally, one of the most successful retail franchises in recent times is CEX, an entertainment exchange that allows customers to trade in their old equipment and games and buy other second-hand products.

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