7-Eleven franchising package made affordable at P300,000
The country’s leading convenience store operator Philippine Seven Corp. (PSC) has rolled out its simplest and most affordable franchising package to date – one that requires only P300,000 in cash outlay from franchisees willing to run these stores on a full-time basis.
With this new scheme, PSC seeks to farm out mature corporate-owned stores to franchisees, in turn freeing up more resources to open more stores and cement its market-leading position in the local convenience store business.
This year, PSC plans to invest P3.5 billion to open around 400 new stores and renovate other stores. The company ended last year with 1,995 stores, further expanding to 2,071 stores as of end-May, thereby gobbling up a 70 percent market share.
“We’re also looking at franchising out existing stores. We have a new franchise package which we’re testing and we’ll be rolling out this year with very low minimal investment,” PSC president Jose Victor Paterno said in a press briefing at the sidelines of the company’s stockholders meeting on Friday.
“Basically, we want people who are willing to work in the stores..The idea is to get ex-employees, people who have managed QSRs (quick service restaurants), people with real skills but not much capital,” Paterno said.
The latest franchise package of P300,000 lowers further the barrier to enter the Philippine 7-Eleven network. This was even more affordable than the P1-million package announced by the company last year. Older franchise packages were worth around P3.5 million.
“This is meant to address true entrepreneurs,” Paterno said, adding that this was also to support efforts towards “financial inclusion” and the idea of giving opportunities to people with skills.
The P300,000 outlay, Paterno said, was basically just a deposit that the prospective franchisee would eventually get back. It’s just an assurance that the new investor “won’t run away with the weekend sales,” he noted.
Under this package, he said the franchisee would take over an existing corporate store – one which has already operated for at least one year while PSC would waive charges on electricity and maintenance. However, he said the profit share of the franchisee under this package would be lower compared to other packages where they put in greater capital and take on more risk.
To date, PSC has converted 50 of its existing corporate-owned stores into franchises under the latest package but so far involved only the “internal” network- employees or existing franchisees.
The same package will be offered to more people this year, he said.
PSC believes that when franchisees are actively involved in running their stores, revenues per store will be higher, in turn boosting overall profitability of this convenience store chain.
Moving forward, Paterno said PSC – while continuing to grow its store network- would focus more on growing store sales by improving its products and services.