If you`re considering franchising with 7-Eleven in the Philippines, it`s essential to understand the terms of the franchise agreement. A franchise agreement is a legally binding contract between the franchisee (you) and the franchisor (7-Eleven) that outlines the rights and responsibilities of each party. Here are some key points to consider before signing a 7-Eleven franchise agreement in the Philippines:
1. Franchise Fee and Royalty Payments
One of the most significant costs associated with franchising with 7-Eleven is the franchise fee. In the Philippines, the franchise fee ranges from Php 1,000,000 to Php 5,000,000, depending on the store format and location. Additionally, franchisees must pay a royalty fee of 1.5% of gross sales, a marketing fee of 1% of gross sales, and an advertising fee of 0.5% of gross sales.
2. Store Build-Out and Equipment
7-Eleven requires franchisees to follow strict design and layout guidelines for their stores. Franchisees are responsible for the cost of store build-out, which includes construction, equipment, and fixtures. The cost of build-out can vary depending on the location and size of the store.
3. Training and Support
7-Eleven provides comprehensive training and ongoing support to franchisees, including a four-month training program that covers all aspects of running a 7-Eleven store. Additionally, franchisees have access to an online portal with resources and training materials. Franchisees also receive regular visits from 7-Eleven field consultants to provide guidance and support.
4. Termination and Renewal
The franchise agreement typically lasts for ten years, with an option to renew for an additional ten years. 7-Eleven can terminate the agreement for various reasons, such as non-payment of fees, violation of the franchise agreement, or failure to maintain the standards set by 7-Eleven.
5. Franchisee Requirements
To qualify as a 7-Eleven franchisee in the Philippines, you must be financially stable, have a good credit history, and be willing to devote your full-time attention to the business. Additionally, you must have a minimum net worth of Php 10,000,000 and liquid assets of at least Php 3,000,000.
6. Sales Performance
7-Eleven expects its franchisees to meet certain performance standards. If a franchisee fails to meet these standards, they may receive a performance improvement plan or termination of the franchise agreement.
7. Additional Fees and Costs
Franchisees may incur additional fees and costs, such as security deposits, insurance, and legal fees. It`s essential to understand all the costs associated with franchising with 7-Eleven before signing the agreement.
In conclusion, franchising with 7-Eleven in the Philippines can be a lucrative business opportunity, but it`s essential to understand the terms of the franchise agreement before signing. As a professional, I highly recommend conducting thorough research and seeking the advice of a legal professional before making any decisions.