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Last April, Convenience Store News reported on 7-Eleven celebrating its 100th franchisee under its new Business Conversion Program (BCP) initiative and at the time, the chain expected to close out 2009 with 200 stores opened, half through the BCP. CSNews checked in with the c-store giant to see if these goals were met and what the plans are for the future.
The Dallas-based chain not only met it goals, but exceeded them with 263 total franchise locations operating by the end of last year, according to Jeff Schenck, senior vice president of national franchise and real estate.
"We did better than we planned, and currently, we have 176 operating BCP locations," he told CSNews.
7-Eleven's BCP began as a pilot in California in mid-2005, which the chain rolled out in the second half of 2006. It presents qualified, independent operators of gas stations, c-stores, liquor, dollar and small grocery stores with the opportunity to convert existing businesses to the 7-Eleven brand.
For 2010, this aggressive franchise expansion momentum continues, according to Schenck. "Our goal is to open 300 total new locations with about 125 under the BCP model," he said.
7-Eleven's BCP presence is in 12 states — the majority of which are on the West and East Coasts. "Our primary presence is in California, New York and New Jersey — that's where we developed the model first, and that's where they are the most mature," Schenck explained.
A successful scenario developing with newly created BCPs involves existing franchisees. "We have 26 7-Eleven franchisees who came into the system under the traditional model, and who are now operating 40 of these BCP locations," Schenck noted. "They took their expertise under the traditional model and then developed a successful business conversion site also — and a number of them have more than one. It's another way for our existing franchise base to grow their stores and franchises."
And in the case of the BCP stores, franchisees are investing their own money — a sign "they know the strength of the system," according to Schenck. "In a traditional franchise, the franchisee has no ownership position, but with the BCP model, they're working with us to identify the sites, and then they lease or purchase it themselves. Traditional franchisees who invest their own capital have a strong belief in the 7-Eleven brand."
The company is utilizing these dual franchisees to further market the concept. "Our greatest challenge in piloting the program four or five years ago was that we had a model, but not a lot of history associated with it," Schenck said. "Now we have strong stories to tell — the BCP testimonials are furthering our success."
And the timing is especially right, with market conditions ripe for the BCP model thanks to competitive lease opportunities; independents looking for a strong brand that brings leverage and scale they don't currently have; oil companies getting out of the retail business; and gas distributors interested in being landlords and the suppliers of gasoline, but not in being c-store retailers, said Schenck.
"I see it as a solution [for operators] to gain benefits of scale, brand strength, proprietary products, a retail information system that is world class, and a proven track record of the 7-Eleven franchise," he said.