The logic behind the switch is that franchisees have more at stake than a company-hired manager in the success of a store because, in the Orlando area, they spend from $180,000 to $500,000 for the privilege of operating a 7-Eleven, said the report. If the store [image-nocss] does well, they share in the profits with the parent company.
"A franchisee has a vested interest in the business," Phillip Clevenger, franchise sales manager for 7-Eleven's Florida district, told the newspaper. "In most cases, they will outperform [the company's corporate-owned locations]."
Franchised businesses such as 7-Eleven contract with individual owners, or franchisees, who pay a fee to open a brand-name location. Agreements typically include continuing fees paid to the parent company or similar requirements. Generally speaking, a franchise can be a good fit for first-time business owners and for those who like to follow a set program, said Franco Ferrari, owner of Central Florida-based Ferrari Sunbelt Business Brokers. "You won't experience the school of hard knocks that you would otherwise," he told the paper. "You don't have to reinvent the wheel. It's already there. You just have to keep it running."
Buying an existing location is also a plus, Ferrari said, because you have trained staff and a sales history. "It's a lot better deal than going in brand new and paying the franchise fees, and not knowing if anyone's going to show up once you open the door," he added.
With most of its stores in other parts of the country already operating as franchises, 7-Eleven is pitching the conversion in Florida as an opportunity for people to get in on the ground floor with a proven concept. Turnout at recent seminars for interested buyers has been low, according to the report, but the company said the poor economy is helping its franchise efforts as much as it is hurting them.
"It is tougher for them to find the money than it was a year ago," Gary Gray, regional franchise sales manager for 7-Eleven, told the Sentinel. "But they're doing it."
Some would-be franchisees were laid off in the midst of corporate careers, and are now looking for their next move, said the report. "They start thinking about, instead of looking for jobs, becoming a business owner," Ivelisse Nunez, who presents franchise seminars to would-be 7-Eleven owners, told the paper. With home equity dwindling, many people use early-retirement packages or tap a 401(k) to pay for the business. "That's what we're seeing, just a shift of where to get funds from."
For Michael Quinones, it was 7-Eleven's store locations that drew him to one of Nunez's and Clevenger's seminars. The 55-year-old Dr. Phillips, Fla.-area resident spent eight years developing c-stores in New York. Now he and his wife are weighing whether they would like to buy a franchise business with the kind of location that only a nationwide chain with 7-Eleven's clout could acquire. "You have to look at the nuts and bolts and make an educated decision," he told the paper.
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