IBS INDIVIDUAL ASSIGNMENT

1
IBS INDIVIDUAL ASSIGNMENT

Contents
I. PART 1. INTRODUCTION

1. Overview ……………………………………………………… ……………………………………………… 3

2. Convenience stores industry and retail market.……………………………………………… 3-4

II. PART II. ANSWER QUESTION ………………………… ………………………………………….. 4-34

I. 7-Eleven’s Background………………………………………. …………………………………………. 4-8

1. History……………………………………………………………..……………………………………… 4-6

2. Current situation………………………………………. …………………………………………… 6-8

II. The current status of 7-Eleven's worldwide franchising activities ……………… 9-19

1. The milestone……………………………………………………. ………………………………….. 9

2. Current franchise situation …………………………………………………………………….. 9-19

III. 7-Eleven franchise requirement, training and support type …………………………. 20-26

1. The main requirement ………………………………………………………………………….. 20-22

2. Training and type of support ………………………………………………………………… 22-26

IV. Implementing 7-Eleven franchisor business in Vietnam ………………………………. 27-34

1. Opportunities………………………………………………………………………………………… 27-31

2. Threats…………………………………………………………………………………………………… 31-34

III. REFERENCES ………………………………………………............................................... 35-36

2
IBS INDIVIDUAL ASSIGNMENT

PART I. INTRODUCTION
1. Overview
7-eleven is a Japanese – American international chain of conveniences stores whose headquarter
located in Dallas, Texas. The huge chain was founded in 1927 with the foundation as an icehouse
storefront in Dallas. After Japanese affiliate Ito-Yokado bought 70% of the company in 1991, it
was reformed as a wholly owned subsidiary of Seven-Eleven Japan Co., Ltd in 2005, and has been
controlled by Chiyoda, Tokyo-based Seven & I Holdings Co., Ltd.
With nearly 100 years exist in retail market, the logo of this famous brand has been gone deep
into the consumer's mind. CEO Joe DePinto – president of 7-Eleven once said: “7-Eleven’s iconic
orange, green and red stripes are easily recognized in 17 countries around the world.”. It also is
a pioneer – the first brand which enter the whole convenience market with convenience store
concept back in the late 1920s and it remains the dominant player until these days.
2. Convenience stores industry and retail market
Convenience stores are on the top of the speed of development among all the retail stores. The
epidemic has boosted convenience store sales this year, causing the market to grow at a rate
more than double that of last year. According to the Mintel research, convenience store sales
increased by over 8% in 2020, compared to 3% last year. The convenience shop market grew
from £44.1 billion in 2019 to £47.5 billion in 2020, thanks to a considerable increase in in-home
food and drink as a result of COVID-19.
Asia-Pacific nations such as India, China, and Malaysia ranked top in the Global Retail
Development Index (GRDI) in terms of both size and momentum, showing that the convenience
store sector, which is still in its early phases, has the potential to develop. In the United States,
there are a large number of convenience stores that sell fuel and packaged food. These stores
can be found in many areas such as along the roadside, a city or suburban, or inside a
transportation hub.
The worldwide retail industry is expected to expand at a compound annual growth rate (CAGR)
of 10.5 percent from $20298.69 billion in 2020 to $22438.07 billion in 2021. The growth is
primarily due to the recovery from the COVID-19 impact of the company’s operating activities,
which had previously resulted in strictly confinement measures such as social distancing, working
from home, and the termination of commercial activities, resulting in operational issues. The
market is expected to reach $29361.95 billion in 2025 at a CAGR of 7%. Other retail
establishments are affecting the convenience store business since they are rising in number and
supplying the same product range at a faster rate using modern technologies. However, due to
the convenience of the shop's size and the increasing availability of product lines such as gasoline,
beverage, and food, the convenience store market is predicted to increase at a CAGR of 0.28
percent from 2017 to 2025.

3
IBS INDIVIDUAL ASSIGNMENT

PART 2. ANSWER QUESTION

I. 7-Eleven’s Background
Mission: “To Be the World’s Most Convenient Sustainable Retailer”
Vision: “Provide Convenient, High-Quality Products and Services to Our Customers When, Where
and How They Want”
1. History
In the very first part, the history of 7-eleven with be re-enacted through some milestones.
Originated from ice company
In 1927, Joe C. Thompson – one of the founding directors of Ice Southland, allowed his employees
Jefferson to sell eggs, milk and bread in one of these small stores which belonged to this company
in Dallas. At that time, small grocery stores and street vendors were quite popular. However,
Jefferson soon realized the advantages of making such product likes bread and milk for sale in
convenience stores. It saved customers from having to travel long distances to find daily-life
goods. Finally, he acquired the Southland Ice Company and changed its name to the Southland
Company.
Jenna Lira, a business executive, brought back a wooden pole from Alaska as a souvenir in 1928
and set it in front of the store. This gift catches the attention of a large number of customers. The
company then decided to place similar wooden poles in front of each store and rename it Tote'm
Store, which meant "purchase and take away."
7-eleven was born
After World War II, in order to take the advantages of economic boom, the name of convenience
chain stores was change into 7-Elven – a regular name using worldwide until now. This name
reflected the opening time from 7 a.m. in the morning to 23 p.m. – which was unprecedented at
that time.
But what made 7-Eleven so different from other competitors in the first period? The answer was
that business experimented with an all-day store in Austin, Texas. After that, the 24/7 chain of
stores gradually developed and becomes popular to this day. In the 50s and 60s of the last
century, no one thought of needing a store that was open all day all night likes this one. At that
time, the grocery stores closed very early. One night in 1962, a 7-Eleven store in Austin had to
stay open all night to accommodate students watching the University of Texas football game.
Keeping up with the trend, 7-Eleven started to apply 24/7 opening hours for the entire chain of
stores. As witnessed the fast growing up of sale revenue when extended the opening time, this
store decided to operate 24/7, which related to the devastating change in whole store chain.
The drink revolution in 1965

4
IBS INDIVIDUAL ASSIGNMENT

7-Eleven introduced the most significant drink which also created the reputation for this brand –
Slurpee.
Slurpee is one of 7-Eleven's iconic shaved ice-topped fruit drinks is the Slurpee. Omar Knedlik,
the owner of a dairy facility, designed this machine and sold the rights to 7-Eleven in 1965. He
accidentally invented the drink in that late 1950s, when his soda fountain was out of work. He
then put them in a freezer in order to keep his drink cold which led to the soda being slushy.
Surprisingly, customers quite enjoyed it and then this kind of drink was named as Icee when it
was created.
After the product became famous, 7-Eleven entered into a licensing agreement with The Icee
Company to market it under a different name. In 1966, 7-Eleven began selling the product under
the title Slurpee, which had inspiration from the sound it makes when people sip it. The phrase
'Slurpee' was coined by Bob Stanford, a 7-Eleven ad agency director. By the spring of 1967, every
7-Eleven store in the country had a Slurpee machine. To promote the Slurpee hype, 7-Eleven
designed eye-catching and not-too-risky names for its new varieties. Sticky Icky, Gully Washer,
Pink Fink, Moonshine, and Adults Only have all been added to the growing flavor roster.
By acquiring 126 convenience franchise stores Speedee Mart in 1964 in California, 7-Eleven
officially entered the commercial franchising business. Company also signed its first regional
licensing agreement in 1968 with Garb-Ko of Saginaw, Michigan. This was a milestone marking 7-
Eleven's business shaping for more than 70 years until now.
7-Eleven opened its 5,000th store in the world in 1974. The corporation expanded its product
offering into a variety of other industries by investing in companies like Chief Auto Parts (1978).
Southland purchased CITGO Petroleum in 1983 and sold its 50% ownership three years later,
owing to the fact that many 7-Eleven stores still serve as gas stations. 7-Eleven continued to
expand throughout the 1980s, opening new sites such as Australia, Sweden, Taiwan and Hong
Kong (China), Singapore, Guam, Malaysia, and the Philippines.
The huge change of 7-Eleven

Southland was troubled by rumors in the late 1980s, making business tough. This company
liquidated numerous assets between 1987 and 1990 in order to pay off obligations. Some 7-
Eleven stores also closed as a result of the downturn. The company was in danger of falling
bankrupt in October 1990, thus it had to file a petition to transfer control of 70% of the company's
shares to Ito-Yokado. Only 5% was held by the Thompson family. Ito-Yokado and Seven Eleven
Japan invested 430 million to preserve Southland from bankruptcy about a year later.

Southland Corporation was renamed 7-Eleven Corporation in 1999. Ito-Yokado founded Seven &
I Holding Co in 2005, and 7-Eleven became a subsidiary. Seven & I Holding announced its
development in the United States in 2007, with the addition of 1,000 outlets around the country.

5
IBS INDIVIDUAL ASSIGNMENT

Masatoshi Ito, a Japanese billionaire and the founder and chairman of Seven & I Holdings, is the
current owner of the world's second largest retail chain. According to Forbes, billionaire Ito has
a net worth of $4.1 billion. In 2015, he was rated 9th on the list of "Japan's 50 richest people"
and 512th on the Forbes list of the world's billionaires.

2. Current situation

Until now, 7-Eleven, which operates in the form of business franchising, is the world's largest
operator, transferor, and licensee of convenience stores, with over 50,000 agents, much
outnumbering the holdings of fast-food restaurant chains McDonald's, which had around 1,000
locations in 2007, set the previous record. Due to the statistic in 2020, the international chain
has already existed in 17 countries with 70,100 convenience stores and reach the revenue at
$54.54 billion overall, with its largest markets being Japan (20,988), United States (9,364),
Thailand (11.712), Indonesia, Canada, Philippines, South Korea, and Malaysia.
What are the reasons for the success of 7-Eleven during nearly 100 years of operation?
The answer is the differentiation and acumen in the market that 7-Eleven has soon realized.
Firstly, 7-Eleven quickly saw the demand of buying goods and products all day all night, 24
hours per day from 1962 – which was 35 years from being founded so they immediately change
their whole system to severed customers 24/7. Besides, doing market analysis carefully in each
market is the key factor that helped 7-Eleven easily catch up with the shopping trend in every
country therefor it can tailor-made every single plan for each store.
To be more specific, in American, 7-Eleven is quite similar to grocery stores, mini-marts are
especially important to have super tasty Slurpee drinks. In Asia, 7 Eleven is a must-visit place. 7-
Eleven was founded in the United States, but it has had tremendous success in the Asian
market thanks to local partners that are familiar with the location and consumption habits of
the local population. And in Indonesia – a country located in South-East Asia, 7-Eleven is
commonplace for almost under 30 customers. With free wi-fi, tables and desks are available
both inside and outside together with small music show make 7-Eleven here have a special
characteristic that is especially important to attract the children come and enjoy.
Product & Service
Second, 7-Eleven products and services are extremely diverse. It provides customers all the
daily life goods, from fresh and diverse food and drinks from many famous brands from Japan,
Thailand, Korea with good quality or even luxury products such as tobacco and alcohol, to the
needs of customers' daily necessities. The main categories for sale in the convenience store of
7-Eleven include milk and product from milk, dried beverage, wine-alcohol, ice-cream,
functional food, biscuit-candy-chocolate, dried snack, grocery condiment, healthcare-beauty,
stationery, and electric & daily commodities.

6
IBS INDIVIDUAL ASSIGNMENT

In addition, 7-Eleven also provides a meal for its customer which are categorized into four kinds
of meal correspondence to time of the day: breakfast, lunch, dinner, and late-night munchies.
This establishment, in particular, devotes a sizable chunk of its space to serving rice-based
foods. In comparison to other convenience stores, 7-Eleven offers not just breakfast but also
lunch. These foods will be rotated regularly to meet client needs, according to 7-Eleven
personnel. Deeply analyzing the items for sale in this store, it is clear that depending on each
market, 7 eleven offers items that are suitable for the taste and culture of the people here.
For example, in more than 20,000 stores in Japan, 7-Eleven provides many foods which are
significant famous and suitable with the taste of native user such as Baumkuchen made from
Hokkaido milk in thick slices (¥324), Ishigaki Salted Sliced Potato Chips (¥213), Chocolate
flavored peanuts (¥108). Besides, in Vietnam, 7-Eleven has many simple foods which are
consumed daily by Vietnamese people like fried corn, spring rolls, fried pho, grilled pork
vermicelli, buffet lunch, baguette, and fried pheasant with tamarind (18,000 to 25,000 VND) are
some of the Vietnamese-inspired foods. Moreover, it also provides a diverse menu of sweet
soup – a famous dessert of Vietnamese cuisine such as “Baba” tea, mango tea, three colors tea,
longan tea with lotus seeds, …
Target market and customer
7-Eleven utilizes age as a factor in their demographic segmentation strategy. Adults and
teenagers are the main populations to target. Its customers are mostly men (60-70 percent)
and range in age from 18 to 44. 7-Eleven caters mostly to working people or families who do
not have time to go grocery shopping.
Some facts about 7-eleven
7-Eleven stores in the world are not the same!
7-Elevens are small convenience stores in the United States where customers may get a fast
cup of coffee before going to work. However, it is more essential to the addressee population in
another country. 7-Eleven is like a coffee shop in Indonesia, with free wi-fi, plenty of tables and
chairs both inside and out in the summer, and live music performances regularly. In the
evenings, Indonesian kids congregate here to work on laptops and eat their favorite dishes. 7-
Eleven is still quite popular in Taiwan, with over 4,000 locations in Taipei, a city of 23 million
people. Customers can pay for credit card payments, housing costs, public transportation
tickets, land tax, tour reservations, and other items in addition to traditional meals and local
delicacies. Instead of having it delivered to a home, people may have it sent to a 7-Eleven shop
for a more convenient evening delivery.
Launching a "7-Election" campaign to coincide with the presidential election
Since 2000, 7-Eleven has had a "7-Election" campaign in which consumers may buy coffee in
blue or red cups with the names of two candidates written on them, depending on which
candidate they favor.
7
IBS INDIVIDUAL ASSIGNMENT

National 7-eleven Day

The day was originally marked on July 11, 2002, when 7-Eleven celebrated its 75th anniversary
by offering customers a free Slurpee. On this day, they give out free Slurpee, and it's become a
tradition. Slurpee is the unique brand name for a carbonated frozen drink sold by 7-Eleven, a
worldwide American convenience store company headquartered in Dallas, Texas. On this
National 7-Eleven Day, folks gather with friends at local 7-Eleven locations to enjoy a free
Slurpee. They also test out the other food items that are available at a reduced price.
Furthermore, consuming as much Slurpee as needed to enjoy the day and make it
unforgettable.
Last but not least, due to the Huffington Post statistic, every two hours, somewhere in the
world, a new 7-Eleven officially opens. This demonstrates the brand's significant growth and
widespread recognition throughout the world.
In conclusion, since the first convenience shop in the United States, 7-Eleven opened in Texas in
1927, people all over the world have found the benefits of c-stores. People need a place where
they can buy essential items and even food without having to make several stops or spend the
time and energy walking around a large big box shop, no matter how much the world changes.
The convenience store business model of 7-Eleven is the most vibrant and diversified, as
convenience stores provide more than just food and beverages; they also sell newspapers,
magazines, and... Pre-order disc CDs, seasonal items, and several payment options are also
available. And 7-Eleven with its long-lasting existence (94 years from 1927 until now) has
become a symbol in the retail market that makes other competitors afraid.

8
IBS INDIVIDUAL ASSIGNMENT

II. The current status of 7-Eleven's worldwide franchising activities

In the previous part, the background of 7-Eleven was presented clearly through many its
history, operation activity and some facts added. Moving to the next question, this part will
focus on the current situation of 7-Eleven’s franchising activity worldwide.
1. The milestone marks the first step in the field of franchising of 7-Eleven

The acquisition of 126 Speedee Mart convenience shops in California in 1964 was a breakthrough
in 7-eleven's path to becoming the world's top franchisor. In 1968, Garb-Ko of Saginaw, Michigan,
signed the company's first regional license arrangement.

2. Current franchise situation

The geographic dominant

7-Eleven has expanded into 17 countries via franchising throughout the course of its 94-year
history. According to Entrepreneur.com, in 2020, there was 68,944 franchised stores in nearly
every country, including 7,379 franchised stores in the United States and 59,193 franchised
businesses operating worldwide, in addition to the 2,372 company-owned locations.
To be more specific, the top market of 7-Eleven is Japan where they located 20.988 franchise
stores here. 7-Eleven Japan recorded revenues of more than 887 billion Japanese yen in fiscal
year 2019, up from around 618 billion yen in fiscal year 2012. By number of shops, the business
was the largest operator of convenience stores (konbini) in Japan.

Sale revenue of 7-Eleven Japan in fiscal year from 2012 to 2019

7-Eleven stores are usually found near local facilities such as a station, an airport, or tourist
attractions. To establish domination in Japan, the 7-Eleven brand employs a distinctive strategy.
Rather of dispersing itself evenly throughout a vast region, it focuses on smaller geographic areas

9
IBS INDIVIDUAL ASSIGNMENT

with the goal of saturating the area with as many sites as feasible. That is why, despite the fact
that Japan has 20.988 stores, one of the country's four major areas lacks even a single store.
Shikoku is a Japanese island that is one of four that form the country's mainland. However it lacks
a single 7-Eleven location. This does not mean they do not intend to invest in this area, it is just
denoted that the chain hasn't set its website on it yet. When it happens, one can bet it will
become the area's most dominating convenience store chain.

Number of 7-Eleven franchise stores worldwide as of January 2020, by country

Thailand (11.712 stores) and South Korea (10.061) are in second and third, respectively, with over
10,000 shops. Less than 10,000 stores, with 9,364 shops, the United States leads the pack,
followed by Taiwan (5.647 stores), China (3.156 stores), the Philippines (2.864 stores), Malaysia
(2.411 stores), and Mexico (1.289 stores). Australia, Canada, and the rest of the countries are
represented below 1000 stores.
However, with a large franchise store network, 7-Eleven certainty faces some problems along the
way. But for the most part, people can find out on social media about the story of 7-Eleven being
a target of robbers. For example, during a heist on the North Side Wednesday morning, a 7-Eleven
employee was assaulted and taken to the rear of the shop, according to Chicago police. The
incident happened at 2:20 a.m. in North Western Avenue, in the 6000 block. It rarely to witness
any negative information about the 7-Eleven franchise itself.

10
IBS INDIVIDUAL ASSIGNMENT

The fast expansion of 7-Eleven franchise store

7-Eleven has evolved to be the largest convenience store chain in the world. Over 68,000 shops
serve millions of clients in 17 countries across the world. Every two hours, a new store opens
somewhere in the world. Look back in 2016, the number of franchise stores was 57,720. In the
next three years, the numbers of 7-Eleven convenience stores rose quickly to 61,086; 63,754, and
66,307 respectively 2017, 2018, and 2019. In 2020, though the growth rate of franchise stores
seemed slower, it still got 66,944 stores worldwide.

Number of 7-Eleven franchise store wolrd wide

2020

2019

2018

2017

2016

52,000 54,000 56,000 58,000 60,000 62,000 64,000 66,000 68,000

Number of Franchise Stores

According to the data above, the number of 7 eleven stores throughout the world grows every
year, with a high and extensive coverage across all continents. Over the years, the number of 7-
eleven franchise locations around the world has grown steadily and at a consistent rate.
Franchise situation in some countries
To make clear about the current state of this company's worldwide franchising activities,
analyzing the operation activity in two countries Singapore and Australia is needed.
Firstly, 7-Eleven Singapore Head office located in No. 21 Tampines North Drive 2 #03-01,
Singapore, Central Singapore, Singapore. It has 43 employers and recognized revenue was $8
million in 2020. In this country, 7-Eleven is the dominator of convenience store chain on the island.
As of 2020, there were 411 7-Eleven locations around the nation. Dairy Farm International
Holdings operates the stores in Singapore, which are franchised under a license arrangement
with 7-Eleven Incorporated.
11
IBS INDIVIDUAL ASSIGNMENT

7-Eleven Singapore revenue

As witnessed from the chart above, the revenue of 7-Eleven in Singapore changed fluctuate.
Although the revenue went down from $5 million to $2 million in 2020, it grew up quickly from
quarter 4 – 2020 to quarter 2 – 2021 by $6 million.
Secondly, about 7-Eleven Australia, its Headquarters location is 2/658 Church Street, Cremorne,
Victoria, 3121, Australia. In August 1977, the first shop in Australia opened. In Queensland, New
South Wales, Victoria, the Australian Capital Territory, and, most recently, Western Australia, 7-
Eleven Shops Pty Ltd runs over 640 stores. 7-Eleven Stores performs over 185 million transactions
each year through its retail network, servicing an average of six consumers per second and
generating revenues of $3.6 billion. Sandwiches, hot pies and sausage rolls, muffins, hot apple
pie, and more are available at 7-Eleven Australia. Some competitors of 7-Eleven Australian
including Target Australian, Sports girl, Sushi Sushi, Nortura. 7-Eleven Australia has 169
employees with the quarter 4 - 2020 revenue is $43 million and went down to $31 million in
quarter 2 – 2021.

7-Eleven Australia revenue

To sum up, 7-Eleven has widened its convenience stores chain as quickly as possible. Its franchise
store also presented in many countries all over the world with an impressive speed of spreading.
Operational efficiency of 7-Eleven
7-Eleven revenue

12
IBS INDIVIDUAL ASSIGNMENT

In general, 7-eleven's company revenue fluctuated in general, with the greatest revenue
milestone of $61.41 billion attained in 2019. From 2012, when sales were $45 billion, to 2015
when revenue was $55.50 billion, there were two noteworthy phases of increase. The second
phase of growth to highlight is from 2016 to 2019 when the amount increased from $53.39 to
$61.41 billion dollars. However, the revenue of 7-Eleven in 2020 surprisingly decreased from
$61.41 billion to $54.54 billion, which means fell by 11.81%.
The reason for the downturn of its revenue mainly because Covid-19. This has impacted
negatively on convenience shops almost immediately. Sales undoubtedly decreased as people
traveled less and were increasingly afraid about personal interaction. Though convenience stores
supplied basics and could thus remain open during lockdowns, they could no longer rely on casual
foot traffic and commuters to generate a significant portion of their revenue. Concerns over
hygiene limited their ability to sell some items, such as self-serve coffee and fountain beverages,
although alcohol sales increased.
Convenience shops are expected to rebound in the end of 2021, with a forecasted 6 percent
increase in revenues, putting the industry back to pre-pandemic levels, thanks to effective
vaccination. As customers act on postponed travel, convenience shops in key cities and tourist
destinations are anticipated to enjoy an increase in revenue in late 2021. This is a bright future
for 7-Eleven in order to recover from the lost in 2020.
Besides, the ranking of 7 eleven in the top 500 franchises from 2011 to 2021 is always in the top
10, as presented in the chart below.

13
IBS INDIVIDUAL ASSIGNMENT

In conclusion, In the overall retail sector, 7-Eleven's operational revenues are quite high. The pace
of revenue growth is extremely rapid, with the highest rise of 11.91 percent occurring in 2013.
Despite being impacted by the pandemic, sales in 2020 dropped by 11.18 percent, but 7-Eleven
seems predicted to return to growth by the end of 2021 with a quick recovery.
Special features of 7-Eleven's franchise method
Leveraging Data to improve Customer Service
When 7-Eleven's financial performance appeared to be deteriorating in 2005, headquarters took
the wise option of including franchisees in the investigation. The massive work of evaluating data
on a store-by-store basis was taken up by franchisees and management. It immediately became
clear that each business has its own distinct set of items that customers seeking for in the shelves.
As a consequence of this comprehensive analysis, the company was able to realign each store's
inventory with what clients wanted, demonstrating that they were taking a customer-centric
approach to meeting client expectations. It would be difficult to adopt a one-size-fits-all method.
Consistency in Excellence
Entrepreneur magazine has selected the top 500 franchises every year for the past 35 years.
They've nailed it, and 7-Eleven has performed well in this yearly event. In 2014, the chain was
placed #6 in the top 10. In fact, 7-Eleven has consistently been in the top 10. It came in fourth
place in 2011 and 2013, third place in 2012, third place in 2010, and first place in 2017 and nineth
place in 2019.
Just in Time Supply Chain Management
7-Eleven's major market is Japan, where it has 17,009 locations. The firm optimized its "just in
time" supply chain management in Japan, which contributed significantly to the company's
success. Because each shop has a certain amount of shelf space, it's important to maintain new
product deliveries coming in.

14
IBS INDIVIDUAL ASSIGNMENT

Since 1987, 7-Eleven has scheduled three deliveries each day to each of its stores in Japan. 7-
Eleven collaborates with its suppliers to fine-tune orders to suit consumer requests by sharing
the vast quantity of data collected by each store's point-of-sale (POS) system. Another way 7-
Eleven focuses on customer service in all of its activities is through this initiative.
Great concern with Health-Conscious Consumers
It's difficult to deny that 7-Eleven has a very good selection of snacks, ranging from Slurpees and
Big Gulp beverages to a variety of chips and other fast food. However, a growing number of
health-conscious and chain-conscious consumers recognize that they must do better on this front.
7-Eleven has spent over a year developing a range of healthy dining alternatives in collaboration
with fitness expert Tony Horton, and is presently testing them in 104 locations in and around Los
Angeles. Angeles. Sandwiches, salads, skins, and cold-pressed juices are all part of the new
product line. Meals are produced with an average of 360 calories each meal and assembled in
the company's Los Angeles-area fresh food distributor.
Corporate Social Responsibility
7-Eleven has an enormous influence on communities all over the world as the convenience store
industry's leader. They want to utilize their power for good by conserving the environment,
offering high-quality goods to customers, and helping the communities in which they live.
7-Eleven is always making improvements and focusing on long-term success. 7-Eleven aims to
lower its energy footprint in shops and headquarters by 20% by 2025, as well as its packaging
impact by 20%. In 2015, we collaborated with Conservation International to create these
objectives.
Beginning in 2017, 7-Eleven will donate 1% of its operational yearly net profits to the community,
with a focus on growing their two most popular programs. More than $900,000 has been
contributed to local schools and youth sports organizations through ‘Project A-Game.' ‘Operation
Chill' collaborates with local law enforcement agencies to reward good acts by providing a free
Slurpee drink ticket to young people.
Competitors

Company 7-Eleven Circle K Ministop

Factors

Industry
Retail (convenience Retail (convenience Retail (convenience
stores) stores) stores)

15
IBS INDIVIDUAL ASSIGNMENT

Founding 1927 1951 1980

date
Country of American American Japan
origin
Employees 24,443 1% increase 20,551 3% increase 938

Number of 71,100 12,143 5,459

stores
worldwide
(2020)
Number of 17 26 7
countries
presented
(2020)
Revenue $54.54 billion $2.4 billion $1.7billion
Main target adults and youth (18 – 44 Teenagers and Low- Age is between 20 – 40
segment years old) Income Employees, a years old
Composed of office group of younger
employees, customers and workers
condominium tenants with lower incomes.
and their household
tenants and their
household help,
students, passersby,
families living nearby the
and families living nearby
branch
Price Slightly higher (compared Relatively expensive Comparable
assessing to normal retail store) (compared to normal (compared to normal
retail store) retail store)
Items sold goods for daily life, from beverages, cosmetics, dry beer products, chuhai
fresh and varied food and foods, cleaning products, wine, wine, snacks and
drink, luxury products fast food, processed products
such as tobacco and
alcohol, to daily
necessities. The items
sold is tailored for each
country's culinary culture

As observed from the table above, 7-eleven has some strong points that helps this famous brand
maintain its long-lasting existence through nearly 100 years from 1927 until now.

16
IBS INDIVIDUAL ASSIGNMENT

First of all, 7-eleven is able to take its advantages due to the time this brand existing in retail
market. Clearly, 7-eleven was the very first brand to enter retail market in the year of 1927. In
the with development process, it has built up the huge international chain of convenience stores
all over the world. In comparison with Circle K which was founded later in 1951 and it was 1980
when Ministop established.
In term of franchise, the important factors that must be put in concern is how many countries
this brand presented and the number of employees. It is clearly to see that 7-eleven has the
highest employees with the number of 24,443, when Circle K has 20,551 employees and it is only
938 of Ministop. Moreover, with the with the advantage of long-term existence as well as the
strong expansion of franchise stores, 7-eleven now has 71,100 stores worldwide, located in
almost all continents - an impressed number that Circle K and Ministop hardly can keep up with
when there are 12,143 Circle K’s convenience stores and only 5,459 stores of Ministop. This is
also a convincing envidence that 7-eleven has strong distribution network — which has
developed a dependable distribution network over the decades and connect effectively that
really can cover the majority of its potential market.
Assessing how effective a company runs its international chain of convenience stores, the
revenue is an indispensable factor that needs to be analyzed. In term of revenue, it is a big gap
when making a comparison between 7 eleven and Circle K, Ministop. When it was $54.54 billion
of 7-eleven versus $2.4 billion and $1.7 billion correspond to Circle K and Ministop respectively.
In another word, the revenue of 7-eleven is 22 time and 32 times that of Circle K and Ministop,
respectively.
Last but not least, it is the price of the items sold in the store. Though it is normally higher than
items sold in supermarket or traditional market, items sold in convenience stores still have the
price difference in each brand in the same segment. Circle K is blamed for selling the items in the
relatively expensive price in comparison with 7-Eleven and Ministop. This is an important
competitive advantage that helps 7-Eleven to keep its customer’s loyalty in the fierce competition
of the retail market. Moreover, the items for sale are basically the same in three convenience
stores with necessary goods for daily life but 7-Eleven focus more on the customer’s taste in each
region with the tailor-made menu.
In conclusion, the world's retail market has completely expanded to every corner and attracted
a lot of investment from companies. There are many old and new companies competing in this
potential market. The relatively stable existence and development of 7-Eleven and its franchised
stores for many years until now and outstanding achievements compared to competitors as
compared above show the success of this brand in this volatile retail market. In the Rank
Franchise 500, 7-Eleven has been dominating on top 10 since 2011. In this year 2021 with the
serious damage of covid 19, 7-Eleven still remain its position on top 10 with #9 in Rank 500.

17
IBS INDIVIDUAL ASSIGNMENT

After seeing the different between 7-eleven and two of its competitors (Circle K and Ministop),
the next part will demonstrate the Strong and Weakness of this brand in term of franchising
activities, which is analyzed according to the SWOT model.
1, Strengths
Firstly, this franchisor has a great convenient location network. 7-Eleven has roughly 65,000
franchise locations throughout the world, giving them a major edge in terms of location and
convenience. Obviously, as a franchisor with a large convenience store network, their major
advantage to customers is that frequently purchased items are available at local locations. As a
result, having a larger market presence through a larger number of shops will give better
convenience to more customers.
Secondly, consumers in the convenience store industry regard 7-Eleven as the market leader in
terms of overall brand equity. This brand value translates into consumer loyalty and lower price
sensitivity, resulting in continuous revenue stream stability across all of the company's locations.
7-Eleven also offers numerous uniquely branded items in addition to a strong overall brand. The
most well-known of them are undoubtedly the Slurpee and the Big Gulp, which helped to
popularize 7-Eleven throughout the world. They also have additional branded options in some
countries, such as Movie Quik in the United States. Consumers may prefer to seek out these
specific products/brands as their preferred choice, giving 7-Eleven even more strength.
Finally, 7-Eleven's franchising activities provides it with a lot of strength. Many 7-Eleven stores
are franchised across the world. The firm has two benefits as a result of this: first, they may
continue to increase their number of sites throughout the world without incurring significant
capital costs. The second benefit is that the stores are operated by motivated people who have
a financial interest for the business to succeed, as the franchisee is generally responsible for the
store's setup.
Last but not least, 7-Eleven's parent business has effectively diversified its income streams across
different regions because the total network operates in multiple nations. This has given income-
stabilizing power, as a recession in one nation is unlikely to have a substantial impact on their
total financial performance. The franchisor can always maintain a pretty consistent profit level.
2, Weaknesses
The first is the exorbitant rental expenses and staff salary. As a result of the necessity to place 7-
Eleven stores in extremely accessible locations, they are likely to face increased leasing prices.
Because of their increased operational costs, they have to adopt a price premium approach.
Some customers are willing to spend a little extra for comfort and quickness of purchase, while
others are more price sensitive. In addition, the store is open 24 hours a day, 7 days a week in
most areas, this sort of retailing operation is likely to have a higher operational cost structure,
similar to the high leasing prices as mentioned above. To maintain its profits, 7-Eleven forced to
increase its pricing offerings as a result of these rising costs.
18
IBS INDIVIDUAL ASSIGNMENT

Finally, although the franchised business itself is a strength, managing a big team of franchisees
all over the world is a problem. This is due to the fact that it transfers some direct management
of each outlet's daily operations activities to the franchisee. In addition, a management staff is
needed to recruit, coach, and manage the different franchisees, which contributes to the total
operating cost structure.

19
IBS INDIVIDUAL ASSIGNMENT

III. 7-Eleven franchise requirement, training and support type

This question necessitates the use of tight, exact phrasing because it requests specific information
from 7-Eleven's franchise procedure and criteria. As a result, the information will be gathered
from 7-Eleven's website as well as the reliable franchise news sources attached.
Franchise Description
Franchisees operate extended-hour retail convenience stores that emphasize on the
convenience of their customers and provide a broad selection of products, including those that
aren't commonly available in convenience stores. These products include high-quality fresh food,
heated meals, unusual beverage alternatives, and private-label items. The stores are usually open
every day of the year.
There are three types of franchises offered:

• A Traditional Individual 7-Eleven Store: The franchisor is offering franchises for a single
location that it owns or rents.
• Business Conversion Program (BCP) franchise: The franchisee pays a different royalty than
typical franchisees and is responsible for procuring the land and building for a store
location. A BCP franchisee is also subject to an unique disclosure form than a regular store
franchisee.
• Micro Market Franchise: The franchisee owns or rents the property as well as the majority
of the equipment required to run an unmanned 7-Eleven branded stand-alone retail
space or an unmanned retail space within an office building, hospital, university, hotel, or
other comparable venue with restricted square footage. A separate disclosure form is also
available for the Micro Market franchise.

1. The main requirement

Because 7-Eleven allows franchising in so many different countries, the requirements will vary
slightly from country to country, but generally still follow the company's main requirements as
follows:
Ensure Age and Experience
To be considered for a 7-Eleven franchise, applicants must be at least 21 years old. 7-Eleven
recommends that their franchisees have retail, managerial, or customer service experience with
a business in the United States, in addition to the age requirement.
Reveal Financial Standing
7-Eleven requires that its franchisee will be financially stable. Applicants must have a minimum
credit score of 700 and have not filed for bankruptcy in the last seven years.

20
IBS INDIVIDUAL ASSIGNMENT

Confirm United States Residency

Even though 7-Eleven does not need candidates to be citizens of the United States, they do
demand proof of permanent residency in the United States. Applicants seeking a 7-Eleven
franchise will not be accepted if they cannot present the documentation.
Tests and assessments must be taken.
Before going on to the next stage of the application procedure, prospective franchisees must take
a franchise assessment exam and a franchise disclosure test. Those that pass the examinations
will be able to choose a shop.
Create Business Plan and Budget
Whether owning a franchise or build a business from the ground up, business planning is an
essential requirement. 7-Eleven works with prospective franchisees to develop a business plan
and a budget for their businesses. The business plan must be detailed, clear, precise and suitable
with the business condition in both the country of franchisee and the requirement of mother
company.
Sign Agreement
7-Eleven franchisees must pay a one-time upfront franchise fee that can range from $50,000 to
$350,000. The charge is determined by the location and, if appropriate, the location's prior gross
earnings. The first price covers materials, inventory, permits, licenses, bonds, and cash to get the
register up and running. For locations with gas stations, additional one-time costs ranging from
$10,000 to $40,000 may be imposed.
Franchisees who want to buy locations from current owners must pay the owner's fee in addition
to 7-Eleven's franchisee costs.
Franchisees pay royalties depending on store's gross earnings after the initial one-time charge.
Net sales revenues minus wholesale expenses paid for the goods sold is the calculation.
Financial requirement

Initial Franchise Fee $0 - $1,000,000

Initial Investment $69,650 - $1,185,400
Cash Requirement $50,000 - $250,000
Veteran Incentives 10-20% off franchise fee, up to $50,000;
preferred interest rates and special financing
Royalty Fee - an ongoing fee paid to the Varies
franchisor on a regular basis

21
IBS INDIVIDUAL ASSIGNMENT

Ad Royalty Fee - an ongoing charge paid to 1%

the franchisor to help fund advertising or
marketing initiatives
Term of Agreement - length of time franchise 15 years
agreement will last
Is franchise term renewable? Yes

In addition, to franchise with 7-Eleven, applicant must:

• Pass a comprehensive background check

• Not have any other business interests that, in 7 Eleven's judgment, might affect your
ability to effectively implement the 7 Eleven business idea.
• Only those inventoried items and other products corresponding with the categorization,
amount, quality, and variety associated with the 7-Eleven brand image, as defined by the
franchisor in the franchise contract, must be made, used, and offered for sale.
• Ensure that a fair and representative number of all proprietary items mentioned in the
franchise agreement or by the franchisor in writing are always on hand
• Must adhere to the franchisor's fresh food shelf life and merchandising standards.
Other requirements
Obligations and Restrictions: Under the terms of the franchise agreement, franchisees commit to
give their best efforts to the store and to actively and significantly engage in the franchise's real
operation. Except in rare circumstances, the franchisor does not need franchisees to designate
or train a manager since the franchisor expects the franchisee to really run the franchise firm.
The store must stock all of the stated inventory categories. Only the inventory and other goods
that are consistent with the kind, amount, quality, and variety associated with the 7-Eleven Image
and as specified by the franchisor in the franchise agreement must be carried, used, and offered
for sale by franchisees. Franchisees must keep a fair and representative number of any
proprietary items mentioned in the franchise agreement or that the franchisor lists in writing in
the store at all times. All specified nationally or regionally marketed or promoted items must be
carried in a fair and representative amount by franchisees in their stores. For fresh items,
franchisees must adhere to the franchisor's merchandising and shelf-life standards.
Term of Agreement and Renewal: The length of the initial franchise term is 15 years. One renewal
term equal to the number of years under the then-current franchise agreement for franchise
renewals is available, if requirements are met.
2. Training and support
Training Overview

22
IBS INDIVIDUAL ASSIGNMENT

The Instruction Program entails roughly 300 hours of training at the franchisor's Store Support
Center in Irving, TX, as well as at a 7-Eleven Training location. The franchisee's approval as a
franchisee is not contingent on successful completion of the Training Program. Franchisees, as
well as any managers they appoint and whom we authorize for training, must successfully
complete the whole Training Program to the franchisor's total satisfaction, as determined only
by the franchisor. In the event that the 7-Eleven System changes, the franchisor may provide
extra training. Franchisees agree to participate in, and require their employees to participate in,
any additional training programs the franchisor makes available relating to the proper sale of
age-restricted products or other regulated products that could result in a legal violation if not
sold properly, as well as any other training programs it deems necessary. Franchisees and their
staff must successfully complete any needed extra training to the satisfaction of the franchisor,
as determined solely by the franchisor.
Type of Training

(a) Initial Training: Applicants will be a trainee for a period of time before achieves the
requirement test and condition to become franchisors of 7-Eleven. There are some requirements
that applicants must follow:
If the applicant is a single person, he or she will be the trainee, and 7-Eleven will authorize up to
one other person to be an additional trainee. If there are just two people, the trainees will be
those two people.
If applicants are certified, they agree to cover all fees associated with first training, with the
exception of any housing charges, if any, and 7-Eleven's expenditures associated with conducting
the initial training.

(b) Ongoing Training: 7-Eleven agrees to offer additional training that they deem necessary based
on changes in the 7-Eleven System. Franchisor will test any major system changes in Company-
operated Stores and/or in franchised stores where franchisees volunteer to be a part of the test
before making such major changes to the 7-Eleven System. Franchisees agree to be responsible
for all expenses, including the costs of travel, lodging, meals and wages, incurred by their trainees
and other personnel in connection with any additional training program.

(c) Employee Training: Franchisees undertake to offer appropriate training to their store workers
in the operation of the 7-Eleven Store at all times so that they may provide outstanding customer
service and carry out the Store's operations in line with the 7-Eleven System.

Support over view

Financial Assistance: In some circumstances, the franchisor may be able to finance the Down
Payment and Franchise Fee. As part of the bookkeeping services, the franchisor will open and
manage an Open Account for the franchisee. The franchisor does not provide finance from any
other sources and does not get compensation for arranging financing.

23
IBS INDIVIDUAL ASSIGNMENT

Territory Granted: A single 7-Eleven store is covered under the franchise agreement. There will
be no minimum territory requirement for franchisees. In addition, franchisees will not be given
exclusive areas.

On-Line Systems Support Guide: 7-Eleven agree to provide franchisees with access to their On-
Line Systems Support Guide on the 7-Eleven Intranet through franchisee’s in-Store computer.
The On-Line Systems Support Guide provides information regarding, among other things, training
and Store operations and accounting procedures. They may provide assistance and information
to franchisees through methods other than the On-Line Systems Support Guide. The On-Line
Systems Support Guide does not create any additional obligations on franchisees not otherwise
provided for in this Agreement.
Type of Support

On-going support Newsletter Lease Negotiation

Meetings & Conventions Field Operations
Toll-Free Line Site Selection
Grand Opening Proprietary Software
Online Support Franchisee Intranet Platform
Security & Safety Procedures

Marketing support National Media SEO

Regional Advertising Website Development
Marketing Planning & Email Marketing
Support Loyalty Program/App
Social Media

In addition, the table bellow showed the initial investment when being a franchisee of 7-Eleven. As
witnessed from the table, it presented the minimum and maximum amount of money to apply for
7-Eleven franchisor.
In general, the costs are reasonable and attractive to whom is looking for a franchise model.

Name of Fee Minimum Maximum

Initial Franchise Fee $0 $1,000,000

24
IBS INDIVIDUAL ASSIGNMENT

Training Expenses $0 $9,000

Down Payment for

$20,000 $20,000
Opening Inventory

Additional Opening
$15,100 $44,500
Inventory

Cash Register Fund $500 $1,500

Store Supplies $250 $2,500

Licenses and Permits $8,000 $10,000

Insurance $1,500 $7,500

Grand Opening Fee $8,000 $8,000

Only applicable to incoming franchisee’s buying a current

Goodwill
franchisee’s interest in a franchise.

Additional Funds During

$0 $60,000
First 3 Months

ESTIMATED TOTAL $53,600 $1,163,000

25
IBS INDIVIDUAL ASSIGNMENT

All of the information in this question is taken from:

https://www.sec.gov/Archives/edgar/data/92344/000119312505052213/dex10iib1.htm
https://www.entrepreneur.com/franchises/7eleveninc/282052
https://www.franchisedirect.com/retailfranchises/7-eleven-franchise-07012/ufoc/
https://franchisesamerica.com/franchise/7-eleven-inc
609?fbclid=IwAR0L6eknnyeZEAyx8Tcdt3KopprK9RD-HjuV2Vp5Iuvl7bH7RaRFcofiYIc

26
IBS INDIVIDUAL ASSIGNMENT

IV. Implementing 7-Eleven franchisor business in Vietnam

As mentioned above, 7-Eleven is one of the most famous franchisors in the retail market and
convenience store industry thus being a franchisee of this huge chain is something that makes
franchisees proud.
In fact, it not only has opportunities but also exists many challenges when implementing
franchisee business in Vietnam. By applying the PEST model in Vietnam, the two factors
mentioned will be clarified.

1. Opportunities

1.1. Stable environment

Obviously, Vietnam is a socialist nation ruled by the Communist Party of Vietnam (CPV). Because
this country has just one political party, it has an extraordinarily stable political economy with
literally no riots, protests, or anti-government protests. 7-Eleven is a great firm for a franchise
since it can do business, trade, and operate in a peaceful and stable atmosphere, with plenty of
chances to grow and extend the client base.

Moreover, the corruption situation in Vietnam is being controlled and prevented relatively well.
According to data released by Transparency World (TI), Vietnam's Corruption Perceptions Index
(CPI) has increased in recent years, representing a positive indicator of the efforts of the
Government. Specifically, in 2018, Vietnam achieved 33/100 points, ranking 117/180 globally. In
2018, the Government made many efforts to promote anti-corruption work, typically by quickly
and resolutely handling corruption cases and perfecting the legal framework on anti-corruption.
Vietnam's CPI in 2019 reached 37/100 points, up 4 points compared to 2018, ranked 96/180
countries and territories in the global ranking, up 21 places compared to 2018. To be more
specific, in 2020, the government penalized 65 individuals, punished 64 people for violating the
anti-corruption law, filed a petition for the recovery and compensation of over 44 billion VND,
and recovered and compensated over 24 billion VND.

With good corruption control will provide a favorable opportunity for the firm to run more
effectively and without bureaucracy, misuse of power, inequity. It also prevents 7-Eleven
franchisor's operations from illegal activity. Furthermore, this will increase the franchisor's belief
in the host country's government and companies, resulting in a more advantageous franchising
operation.

Last but not least, Vietnam's tax policy is focused on the objective of inclusive and sustainable
growth, which is always open and precise, creating favorable conditions for market-based
enterprises. In Vietnam, the personal income tax rate for income from franchising under the Full
Tariff is 5%. Furthermore, the period to calculate taxable income from franchising is when the
franchisee and franchisor pay the franchise fee. This is viewed as a potential for the firm since it
is a moderate tax rate that is not too high, as well as a government initiative to encourage and

27
IBS INDIVIDUAL ASSIGNMENT

promote franchising, stimulate consumer demand, expand market share and avoid risks in
business activities.
1.2. Policies and regulations in franchising
For franchising to take place, franchisors and franchisees must meet the following conditions for
franchising.

Franchisor
Traders are allowed to grant commercial rights when fully meeting the following conditions:
• For at least a year, the business system that will be utilized for franchising has been in operation.
If a Vietnamese trader is a principal franchisee of a foreign franchisor, the Vietnamese trader
must do business in Vietnam for at least one year using the franchising technique before being
re-granted a commercial right.
• As required by Article 18 of Decree 35/2006/ND-CP, commercial franchising must be registered
with the relevant authorities.
• The terms of Article 7 of Decree 35/2006/ND-CP do not apply to business items and services
entitled to commercial rights.
Franchisee
• Traders are eligible to obtain commercial rights if they have registered business lines that are
relevant to the commercial rights' themes.
• Goods and services that are permissible for commercial franchising are those that are not on
the list of goods and services that are prohibited in the business.
Good for franchised
• The firm may only conduct business with products and services on the List of goods and services
banned from trading or the List of goods and services subject to conditional business after
receiving a Certificate from the sector management agency. business license, comparable
paperwork, or fulfillment of all business requirements

As witnessed from the conditions above, the process is strict, transparent, and clear, quite firmly
controlling the situation of the franchisor, creating trust and peace of mind for the franchisor,
avoiding risks.

1.3. Potential market

According to the ADO report published on April 28, Vietnam's economy will still grow positively
in 2020 despite the Covid-19 pandemic, which has led to a decline in global economic growth.
Accordingly, the Government's effective anti-epidemic and socio-economic development

28
IBS INDIVIDUAL ASSIGNMENT

measures had a great impact in protecting the economy from the pandemic last year, with GDP
growth of 2.9%, among the highest growth rates in the world in the past year.
Continuing the positive recovery and growth momentum from the fourth quarter of 2020, our
country's macroeconomy in the first quarter of 2021 continues to remain stable. Gross domestic
product (GDP) in the first quarter of 2021 was estimated to increase by 4.48% over the same
period last year, higher than the growth rate of 3.68% in the first quarter of 2020, showing the
adaptation, resilience, and recovery trend of the economy is increasing.
Vietnam's economic growth is forecast to recover to 6.7% in last 2021, despite the resurgence of
the Covid-19 pandemic, and accelerate to 7% in 2022, according to the Outlook report (Asian
Development Bank (ADO) by the Asian Development Bank (ADB)). This is strong and steady
growth, thanks to Vietnam's success in curbing the Covid-19 pandemic.
In the first quarter of 2021, the national unemployment rate was 2.19 percent, while annual
inflation in Vietnam climbed to 2.9 percent in May. Vietnam's average economic growth rate
(GDP) is expected to be around 6.5-7% each year during the next five years (2021-2025).
In consequence, operating in a nation where the economy is rebounding fast, even in the face of
a pandemic, will allow the convenience store to expand its income, avoiding the need to suspend
or cease operations temporarily.
About retail market

Both domestic and international capital participate in Vietnam's retail business. Domestic
businesses will benefit from local consumer knowledge and licensing, while international
enterprises will benefit from technological and financial advantages. It is split into two sections:
rural and urban.

In general, international investors perceive Vietnam to be a viable market for foreign investors,
with 8,475 marketplaces, 1,009 supermarkets, and 210 trade centers (as of April 1, 2019).
Furthermore, high consumer power, rising household income, and expanding economic
openness are all characteristics that encourage international firms to explore chances and
develop the franchise market in Vietnam

Vietnam's retail business has been continually evolving throughout the years, according to
Deloitte's study "Retail in Vietnam - An accelerated transition towards omnichannel retailing".
Over the same period, retail sales of products and services grew by 12.4 percent in 2019. Year
after year, the number and size of grocery stores, convenience stores, supermarkets, and
hypermarkets growth. The supermarket system is the most active in 2019, with considerable
revenue growth and large-scale mergers and acquisitions. Along with the growth of the retail
industry and the increase in people's consumption, e-commerce in Vietnam also develops

29
IBS INDIVIDUAL ASSIGNMENT

strongly. Consumers tend to switch to shopping through e-commerce channels (such as Shopee,
Lazada, Tiki, Sendo, Thegioididong, ...)

According to the General Statistics Office, in the first months of 2020; the Covid-19 epidemic has
seriously affected trade, service and import and export activities. The service sector in 6 months
achieved the lowest growth rate of the same period in 2011-2020. Online shopping is becoming
more and more popular. Modern trade channels dominate during the COVID-19 pandemic.
However, 2021 is a year of recovery with the total retail sales of consumer goods and services in
April estimated at 409.4 trillion VND, up 2.3% from the previous month and up 30.9% compared
to the previous month. In the first 4 months of 2021, total retail sales of consumer goods and
services reached VND 1,695.6 trillion, up 10% over the same period in 2020.
According to the rapid growth of Vietnam's retail market, becoming a 7-Eleven franchisee will
have a lot of opportunities to grow in line with the overall growth of the industry. Besides, taking
advantage of 7-Eleven's large social network on many social networking sites such as Facebook,
Instagram will help the store reach out to potential customers faster. In addition, the
combination with delivery apps that are active in Vietnam such as Grab, Bee, Baemin, and the
application of modern payment technologies on Zalo pay, VN pay QR, or Smart pay platforms will
also bring great advantages for the store's business.

1.4. Customer’s consuming habit

With almost 68 percent of the population in working age, this is a huge audience with great
purchasing potential. A total of 65.4 million people between the ages of 15 and 64 make up the
population. These are high-potential clients who are expected to become the target market of
each convenience store. In 2020, Vietnam's per capita income reached $12,100 USD, expect to
rise to $16,100 in 2025. People have a higher standard of living and income, which means they
will be willing to pay for daily necessities and even more luxury and luxury items.
Moreover, many Vietnamese’s citizen has toward the mentality of foreign, which means they
preferring foreign-made products even when the same products are domestically produced with
equivalent quality and even lower prices. It is not difficult to recognize the psychology of
foreigners when entering a supermarket and observing people buying garments, cosmetics and
food. This is a great opportunity for 7-Eleven thus it is a foreign brand which has been famous for
many years. This is a great advantage for the world most famous brand with a familiar name - 7-
Eleven. Buying things in a foreign store will definitely be an option not to be missed for
Vietnamese people, especially young people.
In addition, according to survey data from Kantar, through the Covid-19 epidemic, consumers'
needs and behaviors have also changed a lot and towards a sustainable and healthy lifestyle, so

30
IBS INDIVIDUAL ASSIGNMENT

they are willing to give priority. Prioritize spending on essentials, fast and safe. They spend more
money on essential items of food and beauty. In terms of 7-Eleven's business products including
high-quality products, proprietary drinks, and fresh daily-made, ready-to-eat foods tailored to
local taste preferences, or even cosmetic, it will completely meet that consumption trend.
Besides, people not being allowed to go out regularly. This presents a great opportunity for 7-
Eleven franchise stores with the convenience items, daily essentials that they are providing.

1.5. Technology

With the franchise of a convenience store, it is extremely important to apply modern

technologies in business activities such as payment methods or fast delivery and distribution
systems.
First, the opportunity of a franchise store will be laid in the diversity of the number of e-
commerce platforms in Vietnam, providing a greater opportunity to reach customers everywhere.
With a large number of internet users, e-commerce platforms possess a huge number of visitors.
In terms of the average monthly number of users accessing the e-commerce web platform (via
desktop and mobile devices), Shopee still occupies the leading position with nearly 40.8 million
people, but the position is still very low. The second place is Tiki.com (nearly 35.7 million people),
then Lazada (more than 29 million people) according to 2019 data.
Furthermore, there were 68.17 million internet users in Vietnam in 2020, a 6.2 million increase
from 2019 and a 10% increase. Out of this number, about 145 million mobile devices are
connected to the internet. On average, each user owns 2.1 mobile devices. This is an excellent
opportunity for 7-Eleven to market its product and brand image through a variety of platforms
The fanpage "7-Eleven Vietnam" on Facebook has received 90,800 likes and 93,419 followers —
an outstanding amount of social network followers. With an average of 100 likes and shares each
post, 7-Eleven's postings generate a lot of favorable feedback.
In general, if a partner decides to become a 7-Eleven franchisee in Vietnam, they will benefit from
the potential market, country's stable economy and politics, as well as government regulations
that support and promote investment from another country.
In contract, the pandemic and current rivals in the Vietnamese market provide several challenges.
2. Threats
2.1. Saturated retail market
However, considering that the number of convenience stores has been increasing continuously
in recent years in Vietnam, it will be a big challenge for who choose 7-Eleven to become a
franchisor. Specifically, the number of convenience stores marked an amazing growth; increased
by 60% – from 2495 in 2019 to 5228 in 2020. This increase comes from Vingroup's expansion

31
IBS INDIVIDUAL ASSIGNMENT

strategy as they continuously open Vinmart+ stores in rural areas or sub-zones. If you go deeper
into the analysis, you will see that Vinmart + is still the leading name in this field when the number
of their stores is very large. This will be analyzed more closely in the analysis of competitors when
entering the Vietnam market.

7-Eleven’s competitor analysis - Vinmart

After five years of operation, VinMart & VinMart+ has grown tremendously, becoming the
biggest retail system in the market with nearly 2,600 supermarkets and stores in 50 provinces
and cities nationwide. The goods supply chain of VinMart & VinMart+ is well-invested following
international standards, operating model applying 4.0 technology. In particular, the system has
a close combination of major suppliers in the market and the locality, to bring the most suitable
and high-quality goods to meet the needs from popular to high-end of all people customer.
In 2019, Vincommerce pioneered to bring a whole new experience when applying 4.0 technology
to shopping through the VinMart Scan&Go feature on the VinID App. With continuous efforts,
VinMart & VinMart+ has maintained the No. 1 position in the Top 10 prestigious retail companies
for 2 consecutive years voted by Vietnam Report.
The guideline in all activities of Vincommerce is to focus on customers, put product quality and
food safety first, resolutely refuse and eliminate unclean food, poor quality, and unknown goods,
origin out of the system; At the same time, ensuring a wide range of goods, dedicated services,
and easy shopping for all customers. In the next five years, VinMart & VinMart+ will develop
multi-channel retail, integrate online channels and a nationwide supermarket/store system. Key
online channels include: shopping via phone applications, e-commerce portals, and the
VinMart.com website to bring maximum convenience for customers to shop. It is expected that
by 2025, the system will own more than 300 VinMart supermarkets, nearly 10,000 VinMart +
stores, pioneering coverage in all 63 provinces and cities across the country.
In terms of revenue, according to the Masan Group Joint Stock Company's (MSN) third-quarter
business results report, the revenue of VinCommerce Company alone in the last nine months was
23,678 billion VND, accounting for 42.5 percent of the entire income of the Masan system.
Despite closing 421 locations, according to VinCommerce, the revenue of the VinMart+ micro
supermarket system rose by 38.4% in the third quarter of 2020 compared to the third quarter of
2019, and by 56.5 percent in the first nine months of 2020 compared to the same time last year.
What makes Vinmart so popular?
First of all, it is the professional of this convenience store chain. The brand identical off
VinMart+ has been built relatively solidly since the first time coming from Vingroup. However,
this does not make them "arrogant" even when they have a foothold in the retail industry in
Vietnam. VinMart+ still maintains its professionalism until now, from the way of sales, the
behavior of employees to the way to improve products, to build customer gratitude occasion

32
IBS INDIVIDUAL ASSIGNMENT

every day. That's why customers come and become loyal customers of VinMart+ stores are
increasing day by day.
Second, Vinmart provides its customer the most enjoyable experience. VinMart is known for its
extremely diverse product range, helping customers to freely choose the necessary products
without having to search too far. Many special offers are always updated every month, every
week to help customers save maximum costs to own the best quality products.
Third, this store provides super convenience payment. Not just paying by cash, at VinMart+
system, customers can completely pay for their orders with many different forms such as swiping
cards, scanning QR codes, payment applications or credit cards. No need to wait in long queues
for your turn, with smart sales software and devices, your order will be paid quickly in just 1-2
minutes. Minimize waiting and payment time.
Last but no least is the quality goods. Always putting product quality and customer interests first,
all products at VinMart+ are committed to being genuine and 100% food safe. With strict input
inspection process, VinMart+ convenience store is definitely a destination to help consumers
protect their health and have the opportunity to consume the best quality products.
Besides Vinmart, there are many competitors of 7-Eleven in the retail market in Vietnam such as
Massan, Ministop, Circle K, Family Mark, etc.
Competing with a chain of convenience stores of Vietnam itself will create enormous challenges.
The first thing mentioned is that Vietnamese people prioritize using Vietnamese goods. They will
care and put the choice of Vietnamese brands on the top of their priority order. In terms of items,
Vinmart's 40,000 items of cosmetics, food, household appliances, household appliances, toys,
fashion, etc. can fully meet the needs of Vietnamese consumers. Compared to 7-Eleven's largely
similar product categories, this is probably a very strong competitor and creates a lot of great
challenges for these franchises.
With the above analysis, convenience store chain Vinmart will probably be the strongest
competitor of 7-Eleven stores when entering the Vietnamese market. Diversification and
differentiation in business activities, as well as services, will be the way for 7-Eleven to compete
with strong competitors already in the market. However, it is also an opportunity for 7-Eleven to
innovate and grow faster and stronger than its competitors.

2.2. Covid-19 pandemic

Despite Vietnam's economic growth in the first quarter of 2021 reached a positive level but did
not reach the growth rate of the same period of the years before the Covid-19 epidemic, several
industries continued to face many difficulties due to the impact of the pandemic. disease
dynamics. The added value of the transportation and warehousing industry decreased by 2.17%
over the same period last year; the accommodation and foodservice industry decreased by 4.49%;
arts, entertainment, and entertainment down 4.02%. The aviation and tourism industries

33
IBS INDIVIDUAL ASSIGNMENT

continue to be severely affected by uncontrollable diseases in the world. This will have a relatively
large impact on the number of customers coming to the store, reducing revenue and business
performance. In particular, convenience stores often attract a large number of tourists, but when
entertainment and tourism activities are reduced, it will lead to a decline in revenue.

2.3. New buying trend

In facts, the form of buying and selling changed, human-to-human interaction was minimal. A
clear shift in consumer buying behavior, from offline to online. Therefore, retailers are forced to
focus on minimizing physical interactions, maximizing digital interactions. Based on Euromonitor
data, 98% of retailers say that physical stores still account for the majority of their revenue, while
only 2% of retailers say e-commerce generates the majority of their revenue. But when the
epidemic broke out, according to a Nielsen survey, the number of consumers shopping online
increased by 25%. Typically, Vietnamese consumers' shopping time on Shopee has increased by
more than 25% since the outbreak. The transactions were mainly in the beauty care, baby
products, home appliances and electronics sectors. Hanoi and Ho Chi Minh City are two cities
that account for about 70% of total transactions on e-commerce channels in Vietnam.
This is also a big challenge when 7-Eleven has not appeared on major e-commerce platforms in
Vietnam such as Shoppee, Lazada, Tiki, …. 7-Eleven with its convenience store chain must
promote development on e-commerce platforms, invest in integrated digital technology to
create an optimal experience for users to be able to step through crisis caused by the pandemic.

Not only that, but understanding of the market, consumption habits, and taste of Vietnamese
people also help the convenience store chain to be more and more interested in consumers.
This is somewhat more difficult for a company originating from the US like 7-Eleven when
placed in the context of two different cultural contexts. Moreover, the franchisor is only
allowed to operate according to the franchisor's system and must not change the core values of
the system. Franchisees have to accept the franchisor's control, supervision and guidance;
comply with the requirements on design, arrangement of sales and service provision of
franchisors.

---------------------------End--------------------------------

34
IBS INDIVIDUAL ASSIGNMENT

PART 3. REFERENCES
http://vietnamfranchise.net/news-franchise/post/?i=352
https://www.franchisechatter.com/2014/11/18/franchise-chatter-news-roundup-6-must-read-
news-stories-about-the-7-eleven-franchise/
https://companiesmarketcap.com/7-eleven/revenue/
https://abc7chicago.com/7-eleven-chicago-robbery-clerk-struck-news/10444683/
https://www.sej.co.jp/in/en.html - StoreLocator
https://franchise.7-eleven.com/franchise/international-brand
https://www.entrepreneur.com/franchises/7eleveninc/282052
https://www.statista.com/statistics/671878/japan-seven-eleven-sales/
https://www.statista.com/topics/5922/retail-market-worldwide/
https://companiesmarketcap.com/7-eleven/revenue/
http://vietnamfranchise.net/news-franchise/post/?i=352
https://www.essay48.com/term-paper/13859-7-Eleven-Swot-Analysis
https://www.convenience.org/Media/Daily/2020/Jan/29/1-7-Eleven-Crests-70K-
Locations_International
https://www.studymode.com/subjects/strengths-and-weaknesses-in-a-7-eleven-store-
page1.html
https://swotandpestleanalysis.com/pestle-analysis-of-vietnam/
https://tapchitaichinh.vn/tai-chinh-kinh-doanh/day-manh-hoat-dong-nhuong-quyen-thuong-
mai-tai-viet-nam-331112.html
https://tcnn.vn/news/detail/47668/Thuc-trang-va-mot-so-giai-phap-phong-chong-tham-nhung-
o-Viet-Nam-hien-nay.html
http://saigontax.net/hoi-dap/item/1197-chinh-sach-thue-nhuong-quyen-thuong-mai.html
https://luatminhkhue.vn/thu-nhap-chiu-thue-tu-nhuong-quyen-thuong-mai-cua-ca-nhan-cu-
tru-duoc-xac-dinh-nhu-the-nao-.aspx
https://nhandan.vn/nhan-dinh/kinh-te-viet-nam-du-bao-tang-manh-tro-lai-trong-nam-2021-
2022-643775/
https://dangcongsan.vn/kinh-te/kinh-te-viet-nam-tiep-tuc-on-dinh-trong-4-thang-dau-nam-
579991.html

35
IBS INDIVIDUAL ASSIGNMENT

https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2021/04/nhung-diem-sang-trong-tang-
truong-kinh-te-viet-nam-quy-i-nam-2021/
https://tapchitaichinh.vn/su-kien-noi-bat/imf-nam-2020-gdp-binh-quan-dau-nguoi-cua-viet-
nam-dat-tren-10000-usd-331067.html
https://vneconomy.vn/thich-ung-voi-xu-huong-tieu-dung-moi.htm
https://vingroup.net/tin-tuc-su-kien/bai-viet/2109/vinmart-vinmart-se-phat-trien-da-kenh-va-
so-huu-10000-sieu-thi-cua-hang-vao-2025
https://www.sapo.vn/blog/cua-hang-vinmart/
https://vir.com.vn/7-eleven-vietnam-uses-domo-to-streamline-supply-chain-68592.html
https://tapchitaichinh.vn/tai-chinh-kinh-doanh/nhung-ten-tuoi-ban-le-ngoai-chia-tay-viet-nam-
307229.html
https://bnews.vn/vincommerce-dat-doanh-thu-23-678-ty-dong/177331.html
https://thanhnien.vn/tai-chinh-kinh-doanh/lo-dien-ong-vua-tieu-dung-ban-le-viet-nam-
1290344.html
http://consosukien.vn/nhuong-quyen-thuong-mai-viet-nam-thuc-trang-va-giai-phap.htm
https://franchise.7-eleven.com/franchise/new-franchisee
- :~:text=To%20franchise%20with%207%E2%80%91Eleven,the%207%E2%80%91Eleven%20busi
ness%20concepthttps://daibieunhandan.vn/can-khuyen-khich-nhuong-quyen-thuong-mai-de-
mo-rong-hoat-dong-kinh-doanh-232585
https://www.franchisedirect.com/fdd-research-hub/search/?query=7-Eleven
https://www.owler.com/company/7-elevenhttps://researchforsale.com/downloads/7-eleven-
2019-franchise-disclosure-document-fdd/
https://franchisesamerica.com/franchise/7-eleven-inc-
609?fbclid=IwAR0L6eknnyeZEAyx8Tcdt3KopprK9RD-HjuV2Vp5Iuvl7bH7RaRFcofiYIc
https://www.franchiseeurope.com/top-500/7eleven/347/
https://smallbusiness.chron.com/7-eleven-franchise-requirements-3941.html

36