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Franchise Chatter News Roundup: 6 Must-Read News Stories About the 7-Eleven Franchise

by Franchise Chatter on November 18, 2014

in Franchise Chatter Guides, Franchise Chatter News Roundup, Retail Franchise

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7-Eleven Photo by RetailbyRyan95

The 7-Eleven franchise is a true juggernaut. In 2007 it surpassed McDonald’s in number of outlets and now boasts at least 54,200 locations in 16 countries (7-Eleven Corporate About).

It all started back in 1927 in Dallas, Texas. A forward-thinking employee of the Southland Ice Company started selling milk, bread and eggs from an improvised storefront in one of the company’s ice houses. The products were easily preserved by the ice, and customers found it very convenient to pick up such staple items when getting their ice. The manager of the ice plant, Joe C. “Jodie” Thompson, Sr., saw the potential of this idea and bought the company, changing its name to Southland Corporation and opening up several locations in the Dallas area.

The convenience stores first operated under the name “Tote’m Stores,” due to the fact that customers toted away their purchases, as well as the authentic Alaskan totem poles placed in front of each store. The company went bankrupt during the Great Depression, but managed to rebound and come back strong after WWII.

Its new hook was changing its name to 7-Eleven, to reflect its new hours of operation from 7 AM to 11 PM, which was a true novelty at the time. The 7-Eleven chain became a subsidiary of the Japanese company Seven & I Holdings Co., which is the largest franchisee of the operation. Company headquarters, however, remain in Dallas.

Here are 6 must-read news stories about the 7-Eleven franchise:

Leveraging Data for Customer Service

Back in 2005, when it seemed 7-Eleven’s financial performance was faltering, headquarters made a good decision by getting the franchisees involved in figuring out what was going on. The franchisees and executives took on the gargantuan task of analyzing data on a store-by-store basis. It quickly became apparent that each store is surprisingly unique in terms of what products customers want on the shelves.

This kind of careful analysis allowed the company to realign each store’s inventory with what customers wanted, meaning they were taking a customer-centric approach to meeting customer needs. A cookie-cutter, one-size-fits-all approach simply wouldn’t work.

This kind of partnership with franchisees was only possible because of a new devotion among top level executives to the servant leadership model – company headquarters even renamed itself as the “Store Support Center,” a clear commitment to working with franchisees rather than just issuing marching orders (SmartBlog on Leadership).

Consistency in Excellence

Entrepreneur magazine has been naming the top 500 franchises each year for the past 35 years. They’ve got it down to a science, and 7-Eleven has fared very well in this annual ritual. In 2014, the chain took the #6 slot in the top ten. In fact, 7-Eleven has been in the top ten quite a few times. It was #4 in 2013, #3 in 2012, #4 in 2011, #3 in 2010, and #1 in 2008 (Entrepreneur).

What happened in 2009? That year it somehow ended up in the #30 slot.

In 2007 it was also #1, in 2006 it was #4, and in 2005 it was #9. In 2004 it was #8, and #4 in 2003. Making it into the top 10 eleven times out of the past 12 years is no small feat, and shows the company’s business savvy when it comes to franchising.

Just in Time Supply Chain Management

Japan is 7-Eleven’s primary market, where it has 17,009 stores (7-Eleven International). The US, by contrast, has 7,700 (7-Eleven Corporate About). Japan is where the company perfected its “just in time” supply chain management that has a lot to do with the company’s success. There is limited shelf space in each store, so it’s critical to keep deliveries of new goods flowing.

In Japan, 7-Eleven has been scheduling 3 daily deliveries to each store since 1987. 7-Eleven works with its suppliers, sharing the massive amount of data generated by each store’s point-of-sale (POS) system in order to fine-tune orders to meet customer demands. This is another way that 7-Eleven puts customer service front and center in all its operations (Supply Chain Management).

Keeping Pace with Health-Conscious Consumers

It’s hard to argue the point that, for the most part, 7-Eleven offers a pretty amazing array of junk food, from its Slurpees and Big Gulp beverages to all kinds of chips and other snack foods. But the consuming public is becoming increasingly health-conscious, and the chain realized it needed to do better on this account (NJ.com).

In a partnership with fitness guru Tony Horton, 7-Eleven has spent the better part of a year developing a line of healthier eating options and is now testing them in 104 stores in and around Los Angeles. The new line-up includes sandwiches, salads, wraps and cold-pressed juices. The meals are being made to contain an average of around 360 calories each and are put together at the company’s regional distributor for fresh foods in the LA area.

Creator of the popular Beachbody P90X workout, Tony Horton foods were previously only available for purchase online (Los Angeles Register). How 7-11 customers in southern California will respond remains to be seen.

The Genius of Free Slurpee Day

The 7-Eleven franchise celebrates its birthday each year on July 11 (obviously a gimmick, but it works) by declaring it Free Slurpee Day. It helps when the weather is hot, which makes the day even more successful. The company estimated that on Free Slurpee Day in 2013 it attracted as many as 7 million customers, and that Slurpee sales subsequently bumped up by 40%. When an increasing number of people are turning to healthier smoothies, juices and frozen yogurt, Free Slurpee Day comes along and packs them in.

The genius of this kind of marketing is that because the Slurpee was free, customers are very likely to pick up some other impulse buys. That single day in 2013 probably generates something like $1 billion in media value (DCmarketingpro).

Not content to leave it at that, in 2014, 7-Eleven super-sized its Free Slurpee Day into a full 8 days of freebies, although in order to go further than the initial free Slurpee, customers had to download a special 7-Eleven app to their smartphones and show it to store clerks to get the free product being offered that day (Money). 7-Eleven has been celebrating Free Slurpee Day since 2002.

Geographic Domination

The 7-Eleven franchise employs a unique method in Japan for achieving domination. Rather than spreading itself thin over a large area, it looks specifically at smaller geographies and aims to saturate the area with as many locations as can be sustained. That’s why although there are 17,009 stores in Japan, one of the main four areas of the country doesn’t have a single store in it.

Shikoku is one of the four islands that make up Japan’s mainland, but it doesn’t have a single 7-Eleven store in it. That doesn’t mean it won’t in time, it just means that the chain has not yet set its sites on it. When it does, you can be sure it will become the dominant convenience store chain in the area (RocketNews24).

After Japan and the US, 7-Eleven’s largest markets in terms of number of stores are Thailand with 7,965 stores, South Korea with 7,128, and Taiwan with 5,025 (7-Eleven International). How many franchise operations do you know of that boast that kind of international presence? That’s not even to mention the other 11 countries in which it operates its remaining nearly 10,000 stores.

With that many locations, there are bound to be some problems along the way, but most of the stories you’ll find in the media about 7-Eleven are largely about the stores being the target of criminals. You’ll be hard-pressed to find anything negative about the 7-Eleven franchise itself.

Obviously, people love it, which is why it has reached the heights of success. The Slurpee that has become one of 7-Eleven’s mainstays was actually first invented by an owner of a Dairy Queen franchise. He first called his invention the ICEE, but when he licensed the idea to 7-Eleven back in 1965, the name was changed to Slurpee (mental_floss).

The 6 must-read news stories presented above keep you on the leading edge of all the latest developments about the 7-Eleven franchise.

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