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[steelepulse]

We've had both familymart and 7/11 approach us about renting out some space. They asked what we want for the space and the Mrs. gave them a nice high up front cost.

Has anyone done business with these chains? What type of terms did you negotiate? Was it a higher than normal monthly rent, or was it a key money and regular rent scenario? Here in Phuket, most every building wants key money and I've heard that these chains pay above normal to get the best locations for their stores.

What is the structure of family marts and 7/11's? Are they franchises sold off by master franchisers, or are they owned and operated by one entity?

[smotherb]

Isn't property ownership public information in Thailand? Do the leg work.

[petermik]

Isn't property ownership public information in Thailand? Do the leg work.

Why bother posting such a pointless and unhelpfull reply-nothing better to do with your time

[thailand49]

You could do a quick Google search I believe there is a forum discusses what you are asking? I suggest you and your wife check it out before she throws out a number reasonable or unreasonable. I would stick with 7/11 rarely do they ever close up on you because they do their research? Here in Pattaya a Thai friend spoil kid got offered 50,000 a month for his building the stupid kid turn it down because he wanted to open up a motorcycle repair shop. I basically told him that he was stupid since he could just collect the rent and take it and open a shop to do what he wanted for around 2,000 baht a month.

The resort I stay now in Pattaya had a space in front that 7/11 wanted prior to them coming the owner wanted 20,000 baht a month. 7/11 came to him basically he got two or times what he wanted and they rebuilt the structure for him suit their needs.

Do a current research?

[maderaroja]

Isn't property ownership public information in Thailand? Do the leg work.

I agree. Someone should monitor the posts.

[pauleddy]

They are both franchises.

7-11, I am told, has 2 options. The franchisee can pay more upfront to 7-11 (say 2 million?) and then take more profits later. Or, can pay a lesser sum and reap lesser margins later. This is what I was told by a Thai about four years ago.

7-11 will also do the legwork and the area research, and the fittings. They don't tend to choose failed areas.

I don't know about FM, although there are fewer and the brand is not as strong. Very few 7-11s fail, although I know at least one FM that folded.

[tigermonkey]

7-11 in Thailand is owned/franchised/managed by CP which is the largest food producer and marketer in Thailand. The last figures that I saw were that 7-11's in Thailand were 48 % franchises , 44% corporate (CP) owned and the rest were sub-area license stores. There is little difference between renting to a corporate or a franchise store, although CP own many of their locations. In either case, you are basically dealing with 7-11. Franchise stores are seldom as profitable as corporate stores, although the difference is usually volume based, and successful franchise stores will often see a corporate store spring up very close to them.

If you have the choice, choose 7-11 over Family Mart, and don't commit to anything without competent legal advice.

[smotherb]

Isn't property ownership public information in Thailand? Do the leg work.

Why bother posting such a pointless and unhelpfull reply-nothing better to do with your time

Well, let's see now. In my property development days, that is how I found the owners of property in which I was interested. So sorry you consider it worthless, it made me loads of money. By the way, what good did your comment do the OP?

Have you nothing better to do with your time?

[Satcommlee]

You may not be doing business with 7/11 or Family Mart.. they are franchises and individuals stump up a lot of money to buy into the franchise.. All 7/11 and Family Mart will do is shopfit and supply the stock.

You could still be dealing with a charlatan or crook when it comes to the property side of things...

[Strangebrew]

Ok here it is in a nut shell 7-11 are franchised out by a single Thai family they charge 100,000 baht to open one you find location you want to open they turn around and open one few doors away screwing you in return. 7-11 is US based enterprise In the states it is against corporate policy to open another store close to 7-11 that is near by. In Thailand it is the norm. Maybe an AM PM mini mart would be better.

[steelepulse]

Isn't property ownership public information in Thailand? Do the leg work.

Actually if you go to the land department here you'll see a name with a chanote title, and most likely a lot of lienholders on the back. Good luck tracking down all of these parties if you were actually trying to buy or sell land instead of trying to ascertain a business model.

What exactly does your reply do to help answer the actual question, about what the business model of family mart and 7/11 is? I'm just not smart enough to connect the dots between these two vastly different issues.

Thanks everyone for the replies so far. I wouldn't have even guessed there is a forum about renting out to local franchises, but you learn something every day. I'm going to look it up now.

[starship]

As you are looking to rent to them, not buy a franchise their business model is irrelevant to a degree. Perhaps I misunderstand and you may be referring to the key money/rent option.

If it's your property you can obviously ask for any terms you want. If key money is the standard where you are based, then I would use that with a combination of rent but increase it to a higher level without being ridiculous (although I know some landlords do. Wether they manage to rent it at astronomical rates is another matter).

You are obviously in a very favorable position if you have been approached both by 7 Eleven and Family Mart. As another poster stated they (7) and I guess also Family Mart are a mix of company owned and franchised stores. Personally, I would go with 7 Eleven if I were in your situation because of every 7 store I have seen they have always been much busier than Family Mart. I do not personally know of any 7's that have closed but I have witnessed some Family's close. For this reason I think 7 Eleven would be the better bet as they are more likely to rent from you longer term than a poorer performing competitor if you are in a decent location. Of course you have to way this up against the offers you receive.

Both chains are in a constant battle with each other (and Tesco Lotus, Mini Big C etc) to get good locations, as they are looking for continual growth in their franchise operations. If you have a commercial property in a good location you are on to a winner - and presumably you have if you have been approached by the big chains - they do there research as others have stated. It's very difficult to make money in Thailand and most Thai's that I see that do, are the one's that rent commercial property. If you are in a good location there is a constant stream of people who want to rent from you wether they know about business or not.

[starship]

As you are looking to rent to them, not buy a franchise their business model is irrelevant to a degree. Perhaps I misunderstand and you may be referring to the key money/rent option.

If it's your property you can obviously ask for any terms you want. If key money is the standard where you are based, then I would use that with a combination of rent but increase it to a higher level without being ridiculous (although I know some landlords do. Wether they manage to rent it at astronomical rates is another matter).

You are obviously in a very favorable position if you have been approached both by 7 Eleven and Family Mart. As another poster stated they (7) and I guess also Family Mart are a mix of company owned and franchised stores. Personally, I would go with 7 Eleven if I were in your situation because of every 7 store I have seen they have always been much busier than Family Mart. I do not personally know of any 7's that have closed but I have witnessed some Family's close. For this reason I think 7 Eleven would be the better bet as they are more likely to rent from you longer term than a poorer performing competitor if you are in a decent location. Of course you have to way this up against the offers you receive. Additionally, you need to be aware that other 7 Eleven may open near you, which doesn't seem to be they way with Family Mart but as you are renting to them not a franchisee this may have little or no impact.

Both chains are in a constant battle with each other (and Tesco Lotus, Mini Big C etc) to get good locations, as they are looking for continual growth in their franchise operations. If you have a commercial property in a good location you are on to a winner - and presumably you have if you have been approached by the big chains - they do there research as others have stated. It's very difficult to make money in Thailand and most Thai's that I see that do, are the one's that rent commercial property. If you are in a good location there is a constant stream of people who want to rent from you wether they know about business or not.

Sorry for double post, can't seem to delete it.

Edited July 1, 2014 by starship

[thailand49]

Clarification!!!!!

He does not want to buy a 7/11 or F.M.!

He has property location that they both want to rent! That's all! Wants to know what to charge?

[steelepulse]

Correct thailand49 and starship. We have a good location with an ongoing business ( we built the building and can get consecutive 9 year leases from the landowner who doesn't want to sell the land), and they have approached asking about taking over the premises. My Mrs told them 1.2 million and they replied with the standard reply "expensive".

[Halfaboy]

Ok here it is in a nut shell 7-11 are franchised out by a single Thai family they charge 100,000 baht to open one you find location you want to open they turn around and open one few doors away screwing you in return. 7-11 is US based enterprise In the states it is against corporate policy to open another store close to 7-11 that is near by. In Thailand it is the norm. Maybe an AM PM mini mart would be better.

This picture taken at Wongamart (Pattaya) almost confirms what you are stating. However here are with a 50 meter radius a 7/11, a Family Mart and a Tesco.

[thailand49]

Correct thailand49 and starship. We have a good location with an ongoing business ( we built the building and can get consecutive 9 year leases from the landowner who doesn't want to sell the land), and they have approached asking about taking over the premises. My Mrs told them 1.2 million and they replied with the standard reply "expensive".

From your reply's your are not the land owner but only leasing the land which you built a building on that lease land. Also the current owner of the land do not want to sell the land to you? Is that correct? Basically he has been leasing or renewing the lease to you every 9 years but now basically wants the land back which you have stated they want to take over the premises. I guess in the end, they want it back because they can lease it out to 7/11 etc?

If the above is the case it was not wise to build a building on a piece of land that is not own by you or your wife? I understand this is a normal thing in Thailand I hope you still have lots of years left on the lease because do not expect a renewal again! They want the land back because it is very beneficial to them to lease it to 7/11 it is good money each month. In real estate anywhere one you obtain a so call anchor tenant like 7/11 the area starts to develop and property and land start to appreciate. If they do not get your location they will get something very close to your building so the owner opportunity will be gone. In Pattaya, there is a land grab because of the competition between 7/11 - Tops - Mini-Lotus- Mini Big C,, Family Mart can't compete in fact many are closing in the Naklua area. 7/11 is so strong they will open one or build a building themselves even just so the others will not get the property.

In the end, if all I've said is true you should think about finding out what it would cost you to buy a similar piece of land on the same Soi. If your Mrs. told them 1.2 million I hope you spend less on that in putting the building up? See from my experience general Thais with money are stupid or should I say they think stupid to a point that they always try to get something for nothing? Just got through talking to the owner of Hollywood Disco in Pattaya not sure how he got his kind of money maybe handed to him by his family but basically the guy got greedy and though he was getting over when I was trying to do him a favor if he would be patient but instead he up the amount and I advise my friend to walk away. Because of his position he ended up having to put in double the money which I told him he would.

I would try and get as much as I can back with a profit so you can buy another piece of land on the main road Like 50-75 meters from your location now and build a larger structure like double or more and reopen you business and wait for 7/11 to come knocking on your door to lease and open another 7/11? In time, 7/11 will end up basically paying for your land and structure down the road. With the money coming in from them you can continue buying land down the road and using 7/11 to pay for it!

Years ago they sell their franchises like A/B for 1.5 and 2.5 million but their goals now are to open larger stores so the amount I quoted in outdated but these franchise are only sold or leased out for 8 years thereafter you have to buy in again so you will get rent month after month without worrying about deadbeat Thais renting coming and going? If you can get the key money great but with 7/11 I would not worry too much about it? Rarely do they ever close down in fact in Pattaya, when the lease is up, they close down and renovate the store for new perpective buyers.

Good luck

Edited July 4, 2014 by thailand49