Learn The Success Factors of the 7-Eleven Franchise

The “Master Franchisee of the Year” award is presented to 7-Eleven Malaysia as a recognition of its robust franchise system. The award was given at the 23rd Malaysia Franchise Awards Night 2021, an event organized by the Malaysian Franchise Association (MFA). A total of 13 categories of awards were presented to encourage franchising in Malaysia as it continues contributing to the growth of the Malaysian economy.

7-Eleven Malaysia has been around for 30 years. When we talk about convenience stores, the very first name in mind is 7-Eleven. They have been carefully selected as Master Franchisee of the Year on the basis of several criteria:

i. the demonstration of successful ownership;

ii. the willingness to personally manage day-to-day operations, grow sales, and manage a team; and

iii. the passion to create a happy shopping environment for customers.

The 7-Eleven Business Model

7-Eleven’s business model is fascinating. Founded in 1927 as an ice and beverages stand in Dallas U.S.A., 7-Eleven first launched its 24/7 store in 1960 and rapidly got success. Now its business model is admired by many competitors. They have stores across 17 countries globally, predominantly in Asia and the Americas.

Take a look at Japan on this map!

7-Eleven hits 70,000 stores worldwide as of 2020.
Source: 7-Eleven Corporate

In 1980, the company expanded its operations and opened stores in popular countries. Unfortunately, they ran into a financial crisis due to the American stock market crash. Not losing hope, they eventually sold 70% of the company to Japan’s largest convenience store company, Ito-Yokado, and 7-Eleven re-established themselves as the global convenience store leaders and continues to grow to this day.

7-Eleven Success Factors

Have you ever felt hungry in the middle of the night, then find you have no real food but random sauces in your fridge?

Did you ever find you’re missing one or two items for a house party and needed to quickly pop out to get them?

Are you in such a hurry that you don’t want to find parking in a big mall or hypermarket, then walk through a giant store, and then wait in a long queue at the registers?

An example of the convenience meals sold at 7-Eleven.
Source: 7-Eleven Malaysia Facebook.

Today, people want things done quickly with a snap of a finger. 7-Eleven follows a simple business model that serves customers who want instant gratification. Our lives are busy and hectic, and if a problem arises, it’s best if we can fix it immediately. We don’t always want to spend our precious brain energy and time to plan the optimum shopping trip every single time.

Keyword: Convenience.
Because people are just prone to laziness.

Number 1:

7-Eleven is so popular because it meets a necessity that will always be in demand. Humans will never run short of laziness. Yes, we hate to admit that to ourselves, but it’s undeniably true. We all have our lazy days and it’s 100% guaranteed to happen. People will be tempted choose a nearby store instead of a supermarket you have to drive to. The slight markup in price is worth it on those days.

Number 2:

Another key factor is the round-the-clock hours. By staying open 24/7 all year long, 7-Eleven becomes the reliable solution who is always there to help you. 7-Eleven is one of the best convenience store options that lets people to shop during non-typical trading hours. If all other stores are closed, 7-Eleven will always be there for you.

Number 3:

Plus, they sell an extensive range of snacks, drinks, and pantry staples – things all sorts of people need daily. It is a great pit stop for your road trip snacks, your pre and post work coffee, your midday thirst quench from the Malaysian heat, your last-minute party essentials, your 2 A.M. munchies, your after-school hangout spot, or your trendy new Slurpee flavour that’s going viral on TikTok. Everyone will find something there, it’s a tiny store that packs a punch.

Number 4:

This is probably the most important point to discuss in this article. 7-Eleven makes full use of the power of franchises. 7 -Eleven is the biggest and most well-known operator of convenience store outlets across the globe. As consumers, we tend to choose to buy even just a simple bottle of water from a shop with a familiar name, like 7-Eleven, and perceive it to be of somewhat better quality. Majority of its stores are located in high-traffic areas to drive even more brand popularity.

Brand familiarity may go unspoken but is so important.
Source: RLI.

So, What Can We Learn from 7-Eleven?

Supportive Franchise Systems

Supporting franchisees diligently has always been a key element of being a successful franchise business. As a franchisor, you must not view this relationship as a superior-inferior one, but as equal partners. To put it bluntly, you are, in a way helping a person who is trying to make you rich. Thus, you cannot skimp on support.

In the 7-Eleven franchise model, the profit share arrangement between franchisor and franchisee means that there is a strong focus on performance for the benefit of both parties.  To achieve this, 7-Eleven has a strong support ecosystem to help franchisees succeed. This includes:

i. retail specialists in charge of store appearance, standards and compliance coaching,

ii. retail business managers who give business coaching and dedicated operations support,

iii. regional and state managers who coach and support both retail business managers and franchisees, and provide strategic and operational leadership in their states.

Notice how much manpower and attention is spent on supporting franchisees?

Hands-on Ownership

Remember, a franchise chain is a global effort, and to keep everyone on the same page is super important. Franchising has immense benefits, but only if everyone stays on track.

One of the key roles of a 7-Eleven franchisor is to help boost growth by helping franchisees to activate each marketing campaign and promotion successfully across every shift in their store. Having a consistent focus on sales building activities and communicating effectively with the team provides the best results.

Only when one understands how a franchisee thinks and acts, that the benefits of marketing initiatives provided by 7-Eleven are maximised. Putting in the effort to understanding a franchisee’s personal goals is an important part of ensuring the support provided is tailored to each franchisee’s situation.

Do you see how a franchise system encourages viewing franchisees as small bosses that are to be respected and not just a dispensable store manager?

Knowledge Sharing

A franchise chain comes with an established network of fellow franchisees and an evergrowing pool of knowledge and experiences. A key element of being part of a franchise system is to have others to turn to when solving problems and removing any roadblocks. It could be as simple as sharing photos and what has worked for others. This often leads to some very productive conversations amongst the franchisees.

The support office team are there to provide the programs and systems that empower stores to succeed. There are business managers as the first point of contact, however franchisees can escalate a widespread challenge that needs resolving. Ensuring the corporation have the insight they need from the field helps to drive sustainable success across the network which benefits everyone.

Can you see the benefits of a franchise’s strong support structure?

Understanding Data Insights

In the new world, we all have to be big advocates of data driven decision making.

The level of financial and data reporting available through the 7-Eleven system is incredibly broad and deep. 7-Eleven can track financial performance, stock and customer movements, customer satisfaction, store standards, and roster effectiveness.

7-Eleven consumer apps also gather data that can be analysed in many ways. A mastery of product demand and trends is key for a business like 7-Eleven, all of which could only be reliably determined through data insights.

Do you see how extensive data understanding can contribute to making good, informed decisions?

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