Is the 7-11 franchise out of control. A street in Pattaya has one ever 50m to 100m

[Just Weird]

1 hour ago, White Christmas13 said:

1 hour ago, Berkshire said:

Not sure why you would say that.  There's a reason franchises are flourishing all over the world.  It's because the model works. 

Does it? Then how come many people getting bankrupt after purchasing a franchise ? 

 

How many are those "many" that you personally are aware of going bankrupt?

[Just Weird]

1 hour ago, Enoon said:

 

Because the "starry eyed" people who bought into them are stuck in them, never having earned enough money to pay off the debts incurred when they borrowed to get into them?

 

They spend their lives paying off interest?

 

I may be wrong, but it would seem to be an obvious reason.

 

Not having read this, I can't really say:

 

Top 4 Reasons to NOT Buy a 7-Eleven Franchise

 

Whatever, there are always plenty more starry eyed individuals "in stock".

Your link also specifically stated, "... and there definitely are positives".  It's not all one-sided!

[Just Weird]

1 hour ago, MikeN said:

I once came across a crossroads somewhere in an innner BKk suburb that had a 7/11 on 3 corners and a Familymart on the other ! It was an older part of town,not a particularly prosperous area, just townhouses no condos, nor was the road too busy to cross, so I don't know why anybody thought that 4 convenience stores were wanted or profitable.

"I don't know why anybody thought that 4 convenience stores were wanted or profitable".

Perhaps because they were profitable?  Do you know that they weren't?

Edited January 16, 2020 by Just Weird

[Jaxxper]

Yes, lots of them and even those close to each other are all busy. How profitable it is, who knows ?

[Berkshire]

41 minutes ago, Kerryd said:

The Thai business model seems to be this:
If someone is running a successful business, open the exact same kind of business right next to it (or as close as you can get).

The Thai business model "seems" to be....so it's entirely based on your personal observations, i.e., anecdotal.

 

TV "experts" commonly repeat this point, but think about it, if one was going to copy a business idea, doesn't it make sense to copy a successful one as opposed to an unsuccessful one?  It happens all over the world, hence the business term "first mover advantage," which essentially says that a successful idea WILL ALWAYS be copied.

 

Trying out an original but unproven idea with your life savings may not be prudent either.  Easy to sit behind a keyboard and criticize, but I commend anyone with the gonads to actually go out and start your own business.  Personally, I'm too darn lazy. 

[SidJames]

https://www.youtube.com/watch?v=V5VqUtQBnOI

[Matzzon]

19 hours ago, ubonr1971 said:

Very daft business model or am I missing something?....

Only about everything. ????

Calling the 7-11 franchise a daft business model???? 

[30la]

In Samui you find a similar situation, at some intersections you find a 7/11, a Family Mart, a Tesco Express and a Mini Bic C at every corner.
In many places on the main road, 7/11 and Family Mart alternate, and there are many!

[RichardColeman]

As someone that carries his daughter quite a bit, I think 7/11's should be every 20m to cool off.

[URMySunshine]

1 hour ago, Just Weird said:

So you're claiming that all these shops aren't making money for themselves, then?

The shops are making money for CP for sure as to the franchisees I don't know - maybe someone can enlighten us with some anecdotals. 

[URMySunshine]

1 hour ago, Kerryd said:

The Thai business model seems to be this:
If someone is running a successful business, open the exact same kind of business right next to it (or as close as you can get).

If there are 2 exact same shops near each other and they both seem to be doing well, then open a 3rd shop and try to steal business from the other 2. 
Cut, rinse and repeat until none of the businesses are making any money. Then close down (or sell to someone else).

 

I've seen people do that with laundry shops. I've seen people do that with motorcycle shops. I've seen people do that with gold shops.

Friend of mine had a motorcycle shop (sales/service/rentals) in a decent location, but he didn't like to actually put any effort into anything so he didn't do good business (customers would come into the shop, he'd glance at them from the office, decide they weren't going to spend money, then ignore them).

He decided to move to a different location. A soi that already had 3 (or more) motorcycle shops within 100 meters of each other. It seems his thinking was that if they were making a living then he should be successful as well. (Ignoring that the other shops were not actually that successful and were meant more for friends/local clubs than as commercial enterprises).
Needless to say, my friend didn't do very good there either and ended up closing that place down as well.

The 7/11s/Family Marts seem to operate on the same premise as well. Instead of finding locations where there isn't any nearby competition, they try to locate next to the competition and hope to steal business from them by virtue of maybe being 20 meters closer (one direction or the other) to where some of the customers might live.

I've been told that a 7/11 franchise costs about 1 million baht. Not sure what the cost to build the store would be or to stock it initially. Labour will be fairly cheap of course (depending on number of staff and salary of the shift managers/cashiers). Probably spend as much on electricity as salaries with all the fridges and aircons running !

But basically, if you can afford the franchise fee and the cost to build/stock the story, you are probably making a return on your investment within a couple of weeks in most places.
Or until some numpty builds another one right beside you instead of 500 meters away on a different soi that doesn't have a store (yet).
 

There are 3 'fake' floating markets in Hua Hin - first there was one run by two brothers so they fell out and one brother started another in competition. Seeing that there were now 2 a third chap opened another sensing a 'gap' in the market. Thais seem capable of a special type of home grown 'stupid'. 

Edited January 16, 2020 by URMySunshine

[jastheace]

2 hours ago, joskeshake said:

do you have chopper for making trip from soi LK Metro to Soi Khopai in 5 min ? or i'm I wrong and is there an Khopai road somewhere ?

1 hour ago, Don Mega said:

Yeah hate people that tell lies... Khopai to LK is 2.1km and take 7 minutes according to google maps.

7 minutes by chopper? not seen that option on google maps, will have a look though. could come in handy one day....

 

[natway09]

CP group with their 7/11 store operations are ruthless, unfair & border on cheating.

They offer you a franchise with (what must be) a loose  minimum distance where they say will not open another store.

It seems that the harder you work to build you business the sooner they will plonk another just across or down the road shattering your dreams after just starting to make money.

Of course the 7/11 operation is only a fraction of the conglomerates business portfo;ios.

Look them up, one of the largest chicken,pork producers in SEA.

My advice, use the stores, NEVER deal with them.

How do you think they have the clout to build the 3 airport train system ? tax dodge ?

[exemplary21]

3 hours ago, Berkshire said:

Not sure why you would say that.  There's a reason franchises are flourishing all over the world.  It's because the model works. 

 

Mmmm, google "RFG", and Australian franchisor, and see what you come up with...

 

[Don Mega]

31 minutes ago, jastheace said:

7 minutes by chopper? not seen that option on google maps, will have a look though. could come in handy one day....

 

If one cannot drive/ride the 2km from LK to Khopai in 7 minutes they should just give up.

Edited January 16, 2020 by Don Mega

[Curt1591]

We have 5 within a half kilometer radius. three of them are less than 200 meters apart.

Edited January 16, 2020 by Curt1591

[Just Weird]

54 minutes ago, URMySunshine said:

2 hours ago, Just Weird said:

So you're claiming that all these shops aren't making money for themselves, then?

The shops are making money for CP for sure as to the franchisees I don't know - maybe someone can enlighten us with some anecdotals. 

So why did you say the following, then, if you're now saying that you have no idea?...

"There are a lot of busy fools running a franchise who find out the hard way that it is a stacked deck and that the house always wins even if they don't".  

[HHTel]

Once a 7/11 franchise is successful, they will open another nearby, offering the original franchisee the opportunity to partner the new franchise (if they believe ready).  Often the new franchise is owned by CP (more than 50% of 7/11 stores are owned by CPAll.

Their reasoning is that Thais don't like walking far and it's for the benefit of the public. CPAll can't lose.  They're on a win-win situation.

Edited January 16, 2020 by HHTel
correction

[URMySunshine]

1 hour ago, Just Weird said:

So why did you say the following, then, if you're now saying that you have no idea?...

"There are a lot of busy fools running a franchise who find out the hard way that it is a stacked deck and that the house always wins even if they don't".  

A hunch and an anecdotal from a guest house owner in Sukhumvit about a friend. I would be interested to hear actual other experiences now the discussion has broadened. I didn't realise this was a court of law and I am under oath. Though I suspect it will remain opaque. Losers won't admit it and smart winners like to keep quiet. 

Edited January 16, 2020 by URMySunshine

[thailand49]

Fifteen years ago I was approached to buy a franchise, I remember then there were A and B models, 1.5 2.5 million up front for 8 years thereafter you had the option to renew. This is when you see one close and remodel usually if the option isn't pick up so they remodel for themselves or the new investor. You don't have the option to select the location rule one is they can open one as close to 50 (whatever metric they call it). As noted they have tons of rules for ownership.

 

Then these representatives went around selling that you can make 100,000 baht clear a month, in my case the more question I asked the more stupid she got.  In the end, if it was sure thing one would be crazy not to gather a number of investor and start buying them up. I think today the investors are mostly gone CP is opening them up on their own it is a plan for monopoly!  Out on the Darkside they have pretty much closed all the Family Marts the competition is mini Big C, lotus, and C.J.

 

If you want to see even more 7/11 come to the Darkside and visit a Soi called Nernpludwan. 

 

News?  CP is or already put in a offer for Lotus operation in Thailand and Maylasia?

[ubonr1971]

6 hours ago, joskeshake said:

do you have chopper for making trip from soi LK Metro to Soi Khopai in 5 min ? or i'm I wrong and is there an Khopai road somewhere ?

at 5am in the morning with no traffic its quite quick to be honest....

[tifino]

coming soon to your street; a 7-11, every 7~11 metres

[xxeo]

Cannibalisation is the word for the franchise industry. When the franchise owner does not give his franchise partner/franchisee a protected area free of other shops of the same chain. Indeeed, this cannibalisation is frequent in Thailand, you see it in many areas.

[URMySunshine]

1 hour ago, xxeo said:

Cannibalisation is the word for the franchise industry. When the franchise owner does not give his franchise partner/franchisee a protected area free of other shops of the same chain. Indeeed, this cannibalisation is frequent in Thailand, you see it in many areas.

Like Amway but not as obvious and with products that people want to buy at a price they can afford.Shame the franchisee is probably paying for our convenience. 

[CG1 Blue]

And yet there are no 7-11s the entire length of the beach road in Patong, Phuket. Just Family Marts. I wonder why this is - some kind of turf war? 

[ThaiPauly]

On 1/16/2020 at 12:02 AM, White Christmas13 said:

Yes I would never buy a franchise business Thailand or anywhere  else. You never make a living. It is the same in the western world. Most of them go bankrupt and left with nothing.

 

I have never seen a closed 7/11  !!

[White Christmas13]

6 minutes ago, ThaiPauly said:

I have never seen a closed 7/11  !!

Well maybe not in Thailand but I am in OZ again and listen to the news every day

there is not one day you don't hear about franchises losing money and closing 

business, I am not just talking about 7/11 which we don't have many here anyway.

[White Christmas13]

14 minutes ago, ThaiPauly said:

I have never seen a closed 7/11  !!

just one example or 2

https://www.news.com.au/finance/business/retail/retail-food-group-set-to-close-up-to-200-stores-by-mid2019-after-878-million-firsthalf-loss/news-story/68e0228e099eea9e4de14edd55ad49c2

 

The troubled company — which owns the Gloria Jean's, Michel's Patisserie, Donut King, Brumby's Bakery and Crust Pizza Bar franchises — plans to shut down up to 200 of its stores by mid-2019. RFG did not specify how many stores from each of its franchises would be closed down.

 

And yes they are all franchises

[Max69xl]

On 1/15/2020 at 10:39 PM, Kwasaki said:

So what's your problem ?

I think he means Soi Buakhao. Soi Kopai isn't even close to LK Metro. It's further south towards Jomtien. Who complains about more stores, I don't get it. 

 

9 hours ago, thaikahuna said:

Look in Jomtien too. There is one every Soi from the Police Box to Soi 9...and all of them are making money.

 

Not really correct. I'm staying in Jomtien and there isn't one 7/11 in the sois all the way south to Soi 9. They are on Second Rd and the Beach Rd near the corners to a few sois, far from every corner,a total of 6-7 7/11 from Soi 1 to Soi 9 + 1 across the police box. I think I know every 7/11 from the corner of Thappraya Rd and Jomtien Second Rd all the way south to Soi 12 and every one on Jomtien Beach Rd all the way south to Soi 12. 

[HHTel]

4 hours ago, ThaiPauly said:

I have never seen a closed 7/11  !!

I live in Hua Hin and during my time here, I've seen several 7/11's close.  Some have been re-opened by CPall but many have not.