Feasibility Study

Opening a 7-11 Franchise at Makiling

A Feasibility Study Presented to the Faculty Panel of Oral

Examiners of Tanauan Institute Inc.
Tanauan City

In Partial Fulfillment of the Course Requirement for the

Degree of Bachelor of Science in Business
Administration with Specialization in Marketing
Management
By:
Ambrocio, Angeline
Valencia, Judy Anne
Mallari, Renz
Evangelista, Mark
March 2016

I.INTRODUCTION
Franchised Business are now prominent in the Philippine economic
landscape. Their importance in our local and national economies increases
day by day. One cannot walk down the street or stroll through the mall w/o
coming across any number of franchised businesses.
Some of the most recognizable franchises are those involved in the fast
food, food cart, and convenience store industry. It is probably fair to fair to
say that every person in this country has at one time or another pepped into
such an establishment for a quick time to eat. Regular patrons have come to
expect that no matter which store they go in, they will get something that
looks, smells and taste just like it would at any other location. The value of
the business from the point of view of both the franchisor and franchisee lies
in the high degree of consistency of the goods or services provided at every
location in the system.
II.OBJECTIVES
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III.BUSINESS BACKGROUND

7-Eleven is truly committed in being the friendly neighborhood

convenience store. It is always one with the community in uplifting the
lives of the Filipinos as it continuously supports the communitys various
social programs and services. To site some are the Computer Donation
Project, our participation in environmental welfare programs sponsored by
local NGOs, and assistance extended to several charitable institutions.
7-Eleven is in partnership with the Philippine National Red Cross (PNRC),
a voluntary humanitarian organization that serves as the governments
auxiliary arm in providing relief, health, and welfare to the most vulnerable
people in need including victims of disaster and other emergencies. And 7Eleven takes pride in supporting their Coin Can Project which is seen in our
stores cash register counters. Our way of saying, 7-Eleven cares for our
less fortunate Filipinos.

7-Eleven believes that protecting the environment is one of the best ways to
invest in the countrys future. Thus, we took part in ABS-CBN
Foundations La Mesa Watershed Project. Said program aims to reforest
some 1,200 hectares of open areas to ensure the sustainability of Metro
Manilas water source.

During 7-Elevens celebration of the 204th Grand Store Opening Celebration,

7-Eleven donated monobloc chairs to the Barangay Satellite of Highway Hills
in Mandaluyong City. Barangay Captain Severo Servillon gleefully accepted
them.

Though still inexperienced in the field of the convenience store industry,

PSC showed remarkable results. In fact, according to Southland's technical
representatives, PSC's 7-Eleven stores compared favorably with other 7Eleven stores anywhere in the world. The stores were clean, comfortable,
and the ambience was very inviting and pleasant. Surely, the company has
learned its lessons well.
Today, 7-Eleven is the countrys biggest convenience store chain with
over 700 stores. With a broad offering of everyday grocery items, fast food,

telecom, bills payment and banking kiosk services, 7-Eleven has been
awarded numerous times by the Philippine Franchise Association, as well as
Entrepreneur Philippines. 7-Eleven has won titles such as Best Foreign
Franchise, Fastest Growing Franchise, Best in Franchise Support, Marketing
Campaign of the Year, and Hall of Fame International Master Franchise
award.
The following are franchising details for 7-Eleven Philippines:
Company Reach (as of March 11, 2012)
Total Units: 707
Company Owned Units: 248
Franchised Units: 459
7-Elevens network of stores and expansion plans are concentrated in
the island of Luzon, covering areas in the National Capital Region (NCR),
Calabarzon, Cordillera Administrative Region (CAR), Central and Northern
Luzon, and Bicol Province.
Structure of Business

1. FORM OF OWNERSHIP
We chose Partnership because, In a Partnership, two or more people
share ownership of a single business.
Advantages of a Partnership
*Partnerships are relatively easy to establish; however time should be
invested in developing the *partnership agreement.
*With more than one owner, the ability to raise funds may be increased.
*The profits from the business flow directly through to the partners personal
tax returns.
*Prospective employees may be attracted to the business if given the
incentive to become a partner.
*The business usually will benefit from partners who have complementary
skills.
Disadvantages of a Partnership
*Partners are jointly and individually liable for the actions of the other
partners.
*Since decisions are shared, disagreements can occur.
*Some employee benefits are not deductible from business income on tax
returns.
*The partnership may have a limited life; it may end upon the withdrawal or
death of a partner.

To combat the disadvantages there should be an open communication

between each partner. Every transaction and every decision that they will
going to acquire will approve the other partner.
2. THE LOCATION
In the Philippines, 7-Eleven is run by the Philippine Seven Corporation
(PSC). Its first store, located in Quezon City, opened in 1984. In 2000,
President Chain Store Corporation (PCSC) of Taiwan, also a licensee of 7Eleven, purchased the majority shares of PSC and thus formed a strategic
alliance for the convenience store industry within the area. Now 7-Eleven
abounds within the many islands of the Philippines with 1400 stores in urban
areas nationwide.
7-Elevens network of stores and expansion plans are concentrated in
the island of Luzon, covering areas in the National Capital Region (NCR),
Calabarzon, Cordillera Administrative Region (CAR), Central and Northern
Luzon, and Bicol Province. Metro Manila 415 ,Luzon 395,Visayas 19

3. COMPETITION
Competition has become fierce in the convenience store space with
new entrants.
Convenience stores in the Philippines are seen to continue prospering on the
back of expanding urbanization with the different players expected to have a
combined total of at least 100 new outlets by yearend, a report of May bank
ATR Kim Eng titled Asean Corporate Insight said.
The report said the convenience store format would continue to serve
consumers especially those from the business process outsourcing industry
because of its 24/7 operations.
The report noted Philippine Seven Corp., operator of 7-Eleven, would
continue to be the leader in the industry 1,282 outlets that delivered P17.1
billion revenues and P20.6 billion sales last year.
The company is accelerating its store openings. Its target this year is to hit
a network of 1,600 stores and to reach 10,000 stores by end-2024.
Expansion is not just happening gin Metro Manila but also in the provinces.

From 41.74 percent in 2010, the distribution of stores from outside Metro
Manila has increased to 54.6 percent. Seven has started to operate a new
logistics centre in Visayas where it operates 103 stores as of end-2014. This
should help facilitate more store openings in the Visayas region, May bank
said.
After 7-Eleven, the report noted Ministop, operated by Robinsons Retail
Holdings, is the next biggest player in the convenience store space with 450
stores as of end of last year.
The report noted Robinsons Retail is also expected to hitch a ride on the
growing BPO boom and expanding urbanization in the country.Ayala Land
and SSI, for instance, formed a 50-50 joint venture for a 60 percent stake in
Philippine Family Mart CVS Inc., the operator of Family Mart in the country.
The joint venture is eyeing to have a total of 150 stores by yearend from 100
outlets as of end-June.
Over the medium term, the goal is for 400 stores by 2017 or 2018, it said.
Another entrant in the convenience store space is Pure gold and Lawson Inc.
of Japan, which formed a 70-30 percent joint venture for Lawson
Convenience stores.
Based on initial plans, the target is to have 500 Lawson convenience stores
operating in the country by 2020, of which 40 to 50 stores will be opened
this year, it said.

D. FORM OF INVESTMENT
Franchise Fee
P600, 000 (will increase to P1, 000,000 within the year)
Total Franchise Cost / Investment
P3 million and above
Standard Package Inclusions:
Use of logo and name

Construction of the store

Advance payment and deposit for rent
Initial Merchandise
Franchise Fee
Training
On-going support
Marketing
Audit
Equipment Maintenance
Payback Period
3.5 years 4 years
FRANCHISE AGREEMENT
OWNERSHIP, LICENSE AND RESTRICTIONS ON USE
2.1 All right, title and interest (including all copyrights, trademarks and other
intellectual property rights) in this Site belong to 7-Eleven or by the original creator
of the material. Further, all names, images, pictures, logos and icons on the Site are
proprietary marks of 7-Eleven or by the original creator of the material. The
compilation of all content, including the look and feel of the Site, is the exclusive
property of 7-Eleven and is protected by U.S. copyright law. Except as may be
expressly provided herein, nothing contained in this Terms and Conditions of Use or
elsewhere shall be construed as conferring any license or right, by implication,
estoppels or otherwise, under copyright, trademark or other intellectual property
rights.
2.2 You are hereby granted a non-exclusive, non-transferable, limited license to
view this Site, and to print insignificant portions of materials retrieved from this Site
provided (a) it is used only for informational, non-commercial purposes, and (b) you
do not remove or obscure the copyright notice or other notices. You are not allowed
to modify, copy, distribute, transmit, display, perform, reproduce, publish, license,
create derivative works from, transfer or sell any information, products or services
obtained directly from the Site. Further, you may not reproduce any part of the Site.
2.3 You also may not, without the permission of 7-Eleven, Inc. "mirror" any material
contained on this Site on any other server. Any unauthorized use of any material
contained on this Site may violate copyright laws, trademark laws, the laws of
privacy and publicity, and communications regulations and statutes.
2.4 All submissions, suggestions, ideas, artwork, or other information ("the
Submission") communicated to 7-Eleven through this Site become the property of
7-Eleven. 7-Eleven is not required to treat any Submissions as confidential, and will
not incur any liability as a result of any similarities that may appear in future
7-Eleven endeavors.

7-Eleven will have exclusive ownership of all present and future existing rights,
including all commercial rights, to the Submission of every kind and nature in
perpetuity throughout the universe. You acknowledge that you are responsible for
whatever material you submit, and you not 7-Eleven, have full responsibility for the
Submission, including its legality, reliability, appropriateness, novelty, and
copyright.
You agree not to: (1) post or transmit anything that is defamatory, abusive, libelous,
unlawful, obscene, threatening, harassing, fraudulent, pornographic, or harmful, or
that could encourage criminal or unethical behavior; (2) submit or upload anything
that violates the copyright or intellectual property rights of any person or entity; (3)
post or transmit a virus or any other harmful component; and (4) contact other site
users through unsolicited e-mail, telephone calls, mailings or any other method of
communication. You are responsible for making sure all Submissions that you
originate or require are properly backed up so you have ready access thereto in the
event of loss, corruption, or interruption.
2.5 The trademarks, service marks, and logos (the "Trademarks") used and
displayed on this Site are registered and unregistered Trademarks of 7-Eleven and
others. Nothing on this Site should be construed as granting, by implication,
estoppel, or otherwise, any license or right to use any Trademark displayed on the
Site, without the written permission of the Trademark owner.
7-Eleven aggressively enforces its intellectual property rights to the fullest extent of
the law. The name of 7-Eleven, Inc. or the 7-Eleven logo, may not be used in any
way, including in advertising or publicity pertaining to distribution of materials on
this Site, without prior, written permission. 7-Eleven prohibits use of the 7-Eleven
logo as a "hot" link to any site, including 7-Eleven sites, unless establishment of
such a link is approved in advance by 7-Eleven in writing.
A partial list of U.S. Trademarks owned by 7-Eleven follows. Any questions
concerning the use of these Trademarks or whether a Trademark that does not
appear on this list is a Trademark of 7-Eleven should be referred to 7-Eleven.
7-Eleven, 7-Eleven Logo, 7-Eleven Caf Cooler, 7-Eleven Convenience
Card, 7-Eleven Speak Out, 7-Eleven Go-Go Taquitos & Design, 7-Eleven Travel
Brew, 7-Eleven & Tri-Color Stripe Design, 7-Eleven Value+, 7-Eleven Weekend
Rewards, 1/4 Pound Big Bite, A Good ID Is a Good Idea, Become An EShopper, Big Bite, Big Brew, Big Gulp, Big Eats Bakery, Big Eats Deli, Big
`Un, Biggest Big Bite, BrainFreeze, Breakfast Bite, Caf 7-Eleven, Caf
Select, Candy Gulp, Casa Buena, Car Gulp, Connections From 7-Eleven,
Deli Shoppe, Dine On The Dash But Stash Your Trash, Double Gulp, Everyday
Convenience for People on The Go, Frostilla Vanilla, Garden Gulp, Gummi
Gulp, Gulp, Heaven Sent, ID Zone & Design, I.Gear/7-Eleven & Design,
Igear Specs, Jalapeno Cheeseburger Big Bite, Nutri-Heaven, Oh Thank
Heaven, Oh Thank Heaven for 7-Eleven, Operation Chill, Quality Classic
Selection, Santiago Cerveza De Oro, Seed-Spittin' Watermelon, Slurp & Gulp,
Slurpee Infused Gum, Slurp, Slurpee, Slurpee Splitz-O, Smackin' Sour
Apple, Splitz-O Cup Design, Smokie Big Bite, Snappix, Spicy Bite, Super7, Super Big Bite, Super Big Gulp, Super Big Gulp Plus, Super Slurpee,

Super Slurpee Strata, Take It & Shake It, The Ultimate Cool, Triple Splitz-O Cup
Design, Triple Splitz-O, World Ovens.
OBLIGATION AND RISTRICTIONS
The franchisee agrees under the franchise agreement to devote his or her best
efforts to the store and to actively and substantially participate in the actual
operation of the franchise. Franchisees further agree to work full time in their store
and supervise day-to-day operations, and make themselves available to meet with
the franchisor at reasonable times, at the franchisors request, but in any event
franchisees agree to meet with the franchisor at least once a week at their store
during reasonable business hours. If a franchisee is temporarily out of town or
otherwise temporarily unavailable to meet with the franchisor at any time, the
franchisee agrees that the franchisor can meet with the franchisees employees to
discuss the franchisee store's business and take any action contemplated or allowed
under your franchise agreement. The store must carry all categories of inventory
specified.
E. MARKETING STRUCTURE
The location of the franchise will be on Brgy. Makiling Calamba Laguna.
SELECTION OF PRODUCTS

GULP

SLURPEE

SIOMAI

HOTDOG

STUFFED
PANDESAL

SIOPAO

PASTARRIFIC

SANDWICH

BIGSLICE

HOTCUP

PINOY RICE
MEAL

RICE MEAL
EXPRESS

SIKSIK MEALS

E. MARKETING STRATEGIES
Business Strategy
Franchise model- as per franchise model of 7 eleven , it allows local
entrepreneurs to invest and makes the business expand faster. The company
monitors all the framework of its franchises to ensure that they always provide good
quality service, cleanliness, and value for the money offered by the company to its
customers.
National marketing and Advertising Initiatives
7 eleven doesnt only drive sales with TV and Radio spots, billboards, websites
and PR.
Local marketing Support
7 eleven provides a full range of local marketing support services and materials
so that franchisees can get the word out about store products and promotion
efficiently.
*Grand opening packages
*Bilingual support
*in store signage
*And much more ..

Marketing Mix
1. PRODUCT
Every day, product is available only at 7 eleven bring millions of loyal
customers through franchises doors. A leader in bringing fresh items into the
convenience space , 7 eleven delivers fresh sandwiches, salads, fruits and
pastries daily. 7 eleven also has a full line of 7 select private label products,
which offer customers food items they love at low everyday prices. And of
course, no one can forget about 7 eleven legendary, iconic products, like Slurpee
drink, Big gulp drink and famous coffee.
When buying products, 7 eleven aims to;
*Be first to have great new items
*Gets the best product in the category
*Be the only retailer to carry certain product
Consolidated Distribution and Daily Delivery
7 eleven works with vendors across the globe to find the products that
customers will love. In order to ensure that the dynamic 7 eleven product mix is
a true asset to franchisees, 7 eleven has created centralized consolidation
centers, so that all the products franchisees need arrived in a single daily
delivery.
2. PRICING
Convenient stores compete with each other in coffee price, fountain
drinks price, and other private owned products price. Price for items that the
stores buy from vendors are not significantly different. Due to it is the top
company , 7 eleven prices its private label products relatively high compare
to other convenient stores. In addition the company has the potential to set
price for the items that other convenient stores do not carry.
3. PLACE
Place along major arterial road.
* Near place in road and bus stop that bus passes.
* Near place in school and company.
* Near Gasoline stations
Seven-Eleven thinks Seven-Eleven obtains the profit that corresponds to it
though such a place is
thought that the land fee is high.
4. PROMOTION
The company introduced Totem store in 1927 and begun selling
gasoline the next year. Then the store name, 7-Eleven, was introduced in
1946 after changing the store hours from 7 a.m. until 11 p.m. sharp to 24
hours store. The 7-Eleven first campaign in 1969, the campaign was & quot.
In almost 30 years, 7-Eleven focused developing its new products and
services such as ATM, Slurpee, Deli Central, World Ovens, Caf Select, Gulp,
Domo. Slurpee is one of customers favorite beverages. It is a slushy
carbonated frozen drink that serves at 28 degrees Recently, 7-Eleven started
to add a bonus for everyone entering the 7-Eleven Day instant win game on

the Slurpee website. After entering the instant win game, they will receive a
code and website link to purchase $7.11 lawn tickets for concerts at select
Live Nation venues across the country. In addition, 7-Eleven made collectible
slurpee cups and slurpee straws featuring Domo & quot the fuzzy brown
creature with a trademark enigmatic open-mouth expression that is taking 7Eleven store by storm this fall & quot. 7-elevent also Domo-nized its food and
beverages, such as the Big Bite and hot dog. Energy drink. CEO Rich Collins
of Big Tent Entertainment, the marketing and licensing company for Domo,
cmmented & quot because Domo has such a hugely devoted, cult-like
following among kids, teens and young adults, we believe hes a perfect
match for 7-Eleven and its iconic Slurpee brand & quot
G. NEW COMERS OBSTACLES
* Financing; Franchises are not cheap, they require upfront capital to
purchase the business, the recurring license payments often linked to
revenue and as mentioned in the previous challenge, franchisors will often
determine suppliers, equipment, training and in some cases rent. With
franchisors controlling the majority of the costs in the operators cash flow
and no competition to drive down prices they are often left to work on
extremely tight profit margins.
*Risk; One of the advantages to franchisors when making the decision
on whether to franchise their business is the opportunity to pass on much of
the risk they face to the franchise operators. Operators are saddled with the
risk of ensuring the businesses success, while the product offering may be
great, this is no guarantee of success and is not immune to external factors
such as the economy and new competitors, who are smaller and more
adaptable to the changing market demands. One risk that applies to both the
operator and the franchisor is the potential devaluation of the brand and will
significantly reduce the benefits of franchising that brand for the operators.
*The Franchisor; The toughest challenge any franchisee may face is the
working relationship between themselves and the franchisor. Franchisors
determine the direction of the business, the marketing and the product
offering, this can often put them at odds with their franchisees who view
them as a challenging business partner that does not engage them enough in
the decision making process. Strategy and product development is controlled
centrally by the franchisor and as they adapt to consumer demand,
researching new developments and testing new products, franchisees are
often only aware of these changes when they are confirmed and ready for
public consumption. You dont have to look far to see evidence of these
relationships in the press with several of the large corporate franchisors.
*Building a Management Team; Turning a business into a franchise
means the owner is taking a different position in this expansion process. From
being an active part of the business, the franchisor becomes more of a leader
who strategizes and monitors. Franchising is a set up with regards to
recruitment and training of management teams. This is an important step in
business expansion through franchising because managerial tasks also have
to be delegated. Management teams are an essential part of building an
organization. In the successful running of a franchise business, the empire

builders need to trust their teams and delegate tasks. Growing and evolving
is as important for the franchisor as it is for the business.
Through innovative and efficient management, achieved through the
use of business intelligence to go beyond the financial controls and into the
operational & customer service performance measures. Identifying key
performance indicators and areas of the business that can be influenced and
controlled by franchisees. Business intelligence can monitor these KPIs and
allow franchisees to react to negative changes and put into place dynamic
business plans based on identified trends and patterns to positively impact
their profit margins and revenue. Such as taking advantage of the business
intelligence tool for planning their resources on shifts, using the tool to
identify key drivers for resources on shifts, outside of sales allowing improved
efficiency and reduced cost per shift. Further intelligence can be used to
determine price points based on demographics and sales data and these are
to name just a few of the potential upsides of applying business intelligence.
H.TRENDS

.
The report noted Philippine Seven Corp., operator of 7-Eleven,
would continue to be the leader in the industry 1,282 outlets that
delivered P17.1 billion revenues and P20.6 billion sales last year
I.HISTORICAL CHANGES
Philippine Seven Corporation gives you the chance to operate
your own business by having access to 7-Eleven expertise, business
operating systems and support of a highly successful global
corporation.
You need determination to do it, the smarts to get it done, the power to
motivate your employees and the financial commitment to make it all
happen. It can be a rewarding experience for those willing to take the
challenge.
7-Eleven offers:
A popular and reliable global brand with a wholesome image. The topof-mind convenience store among customers in the Philippines;
An established retail operating system proven over 28 years of retail
experience;
Access to 7-Elevens logistics and distribution resources;
Continuous developmental marketing, product R&D, and operational
support;

A comprehensive 4 to 8-week training program on the operation and

management of a 7-Eleven store;
Assigned Operations Field Consultant (OFC) who visits with the
Franchisee at least once a week to provide counsel on every aspect of
the business;
Monthly financial and marketing records prepared by 7-Eleven for the
franchisee
IV.FRANCHISE PLAN