7/11 shops too close to each other

[emilymat]

Interesting thread. But it does not explain why the first 6 letters are in upper case and the last in lower. !

Actually, I remember being in Oxford (UK) in the 1980's when I encountered my first 7-11. It was exactly that. Opened at 7am and closed at 11pm. Quite a revolution when you consider that in those days most shops opened at around 9am and closed at 6pm, together with Wednesday afternoon. On Sunday you had tumbleweed blowing down the street - they were so deserted with shoppers.

[digbeth]

In my research in to this about 4-5 years back, it used to be that there's a threshold of takings per day, 60,000baht back then that would trigger an expansion or setting up shops next door or across the road.

If the shop was run by a franchisee, the franchisee would have first refusal to cough up the cash to buy/rent the premise and invest in the equipment and shop fittings, if the franchisee there was unable or unwilling, then corporate would either set it up themselves or find someone who would.

There are many tricks employed by corporate that cost the franchisee all the time too, from forcing renovations every couple of years, adding new tills of just rearranging the layout of the store. And there are many conditions that could lead them to buy the store back off the franchisee's hand like not passing certain standards too often.

[Jonathan Fairfield]

7/11 shops too close to each other ?

How about these in Hua Hin

[bartender100]

I think there is a bit of a war going on between 7/11 and FM in the area described by the OP.

On soi7 (Pattaya Park soi) a FM opened right opposite a 7/11 on a very narrow soi. Now on Soi6 a 7/11 has opened beside a FM in an area of not huge traffic

[impulse]

Who cares, unless you want to open one?

Because it's a pretty universal issue no matter what retail business you'd want to open in Thailand.

[DavisH]

If someone opened a 7-11 next to mine I'd hire motor show pretties to work the tills. Not let those bastards steal my business

[Treborz]

Hong Kong is even worse, i believe the same company holds the franchise for most if not all of them however. We must have the most 7 Eleven per square mile in the world here.

[Suradit69]

This seems to be the bussiness model for alot of things here.

Someone decides to open a hardware store, make a bit of money. Others see it and open another one selling the same stuff, then another one then another one. Eventually, you end up with a row of stores selling similar shit all with their lights off because non of then are making and money.

Same happens with "Water tank shops" theres tens of em all over Phuket, how many does this island need? Pop into one and see if they have and PVC pipe elbows or some glue or perhaps a hose clamp? No. They sell tanks. Thats it. Amazing.

The only way this bussines crowd model works is with bars and sometimes restruants.

It doesn't work for plastic bucket and tat shops, printing shops, sewing shops, hardware or watertank stores yet its practiced nation wide.

"This seems to be the bussiness [sic] model for alot of things here."

Not just here. Starbucks and McDonalds obviously have practiced overkill too.

Seattle-based Starbucks has more than 13,000 locations around the globe, with a long-term goal of 40,000 stores, half of them outside the U.S. The company had annual sales $7.8 billion in 2006, and is projecting 20 percent growth for this fiscal year. In some markets, the company is saturating densely populated areas with more stores so customers don't have to walk more than a few dozen yards for a caffeine fix.

McDonald’s shuttered 350 poorly performing stores in Japan, the United States, and China the first three months of 2015 as part of its plan to boost its sagging profits.

Those previously unannounced closings, disclosed on a conference call with Wall Street analysts on Wednesday, are on top of the 350 shutterings the world’s largest restaurant chain had already targeted for the year. While those 700 store closings this year represent a fraction of the 32,500 or so restaurants worldwide, they show how aggressive McDonald’s is getting in pruning poorly attended locations that are dragging down its results.

[Basil B]

Two things about franchising...

1. contracts are written by the franchisor.
2. the franchisor will always have a better legal team.

Having said that, 7/11 has competition from not just FM but I see others as well, and if you have say a FM open near to a 7/11 then probably trade will be split 50/50, open another 7/11 and that will be a 33/33/33 split but for 7/11 that would be 66%, bet they offer the franchise to the guy who holds the other, first...

[zakk9]

In Soi Land Office in Pattaya (between 3rd Road and Tepprasit), a stretch of around a kilometre, there are somewhere between 15 and 20 7-Eleven, Family Mart and one Lotus Express. One place there are 7-Eleven, Lotus Express, 7-Eleven literally wall-to-wall with the next 7-Eleven 50 metres down the road. It's pollution of the local environment, plain and simple.

[Maestro]

Removed a troll post.

[Asiantravel]

A 7-11 franchise costs 1.5 million Thai baht. Requires 1 million in bank book to get appointment to discuss getting a store. Owner operator gets guaranteed 27,000 Thb monthly salary and some limited profit sharing. If after one year you wish to sell your store you get 1 million Thb back from company. They take over store and find new buyer. There is a 2nd option requiring 2.5 million Thb with percentage sharing of expenses and profits. Same guarantee if return of 1 million Thb after 1 year if you want to sell or leave the business. 7-11 picks this location. They control the other stores too. No exclusive area. Just some of my recollection of earlier discussions with 7-11 reps at a franchise trade fair in Bangkok two years ago.

The point is I wonder how many franchisees in Thailand are happy with their business decision several years after they signed on the dotted line? Particularly those who have to contend with this aggressive competition on their own doorstep and whether they had any idea before investing 1 million or 2.5 million baht that eventually there may be another 7/11 store within metres of them?

[ThaiKneeTim]

I've known people with poor business sense setting up a business, or buying an existing business fail miserably.

In the air force I knew a Warrant Officer who used his retirement settlement to buy a small bakery, it didn't last long. And my former father-in-Law (38 years in the air force.) thought that when I became self employed that money would automatically come to me.

In my home town, which sees a large tourist influx in the summer, there were a couple of successful sandwich shops. Seeing this success prompted others to open sandwich shops, including a Subway franchise.

The first one to go out of business was the Subway franchise!

Viewing the success of others is no basis for business success. If there is 100% trade to be had, then it can only be divided among the retail outlets, you can't make people buy more than they need, so if you copy a successful business you won't have a successful business, you'll simply turn the original successful business into a struggling business.

Okay, so clever marketing can make people think they want something, but that is the preserve of the big retailers and manufacturers (Apple for instance.) but for the small retailers it's better if you have a geographical monopoly.

In my girlfriends village (Thailand provinces) there are a number of small retailers operating from their homes with limited stock and pretty much the same things available in each one. Nothing original!

If a 7/11 opened in the village it would probably result in some of the other retailers going out of business. A 7/11 would do well because the kids love the supermarket concept, judging by the trade at the 7/11 in the nearest town.

Poor business sense isn't exclusive to Thai's, however, what they do lack is innovation. Easier to copy a business than to think of something original.

[tropo]

7/11 shops too close to each other ?

How about these in Hua Hin

This is a good example of what I said before. If 7Eleven hadn't opened on the opposite side of that prime intersection, Family Mart would have. It could be the same owner, but either way it probably wasn't a bad business decision.

We have exactly the same setup on one intersection in Pattaya (that I know of - could be more). It's on the corner of Pattaya Tai 1 & Kopai 1... with an extra twist - next to one of the 7Eleven's there's a Tesco Lotus Express. Amazing!

(when I first saw your photo I thought it was this intersection in Pattaya)

Edited July 23, 2015 by tropo

[tropo]

Hong Kong is even worse, i believe the same company holds the franchise for most if not all of them however. We must have the most 7 Eleven per square mile in the world here.

Are you talking about Pattaya? If you are saying HK has more 7Elevens per square mile, I don't believe it - they haven't counted Pattaya in their survey. If you add to that the Family Marts and other convenience franchises (Tesco Lotus etc) to that there wouldn't be a place on earth even close to Pattaya in convenience stores per km2.

[tropo]

In Soi Land Office in Pattaya (between 3rd Road and Tepprasit), a stretch of around a kilometre, there are somewhere between 15 and 20 7-Eleven, Family Mart and one Lotus Express. One place there are 7-Eleven, Lotus Express, 7-Eleven literally wall-to-wall with the next 7-Eleven 50 metres down the road. It's pollution of the local environment, plain and simple.

Pollution LOL. It's a great way to keep prices down. I love it!

[lucifer666]

Close to Hua Hin there is a crossroads with one on each corner. Go figure.

[toenail]

Who would we be to come here and question the business decision of one of the most successful franchises in history, that being 7-11 Thailand. I have seen many closed 7-11's in the states, none here. I think they are happy with their progress.

I do not think the OP had a strange question; for, if we had this many convient mini-marts in the USA or Europe, they would not survive so one does become curious about various business tactics here or in any continent one may live/travel in...but when you think about the numerous numbers of min--marts in this country it makes sense. 1) Unlike North America or Europe,where people shop at massive grocery stores offering imported fruits from Peru or salmon from Norway to the hundreds of choices of brand names and the customer will stock their grocery carts to the max (spending over $200 in one visit) then throwing the bundles of food in the back of their car and taking off to the suburbs, MOST (I say most) Thais go into a 7-eleven to buy just a couple small items. One has to remember the minimum wage for one day in Thailand for one day is 300 baht. The average Thai is not going to run into a store and buy a huge bottle of liquid detergent or 3 cases of Leo beer. (Yes, there are the Tescos, Big Cs, Makros in the big cities of Thailand, but they are located where people have larger incomes (I wonder what will hapen to the big supermarkets in Korat???) Then there are the 7-Elevens which cater to not only to Thais but also to the farang customer ...and if the farangs are tourists, they also do not have a desire to walk out with a grocery cart full of goods. They need the basics (drinks, beer, snacks, toiletries so they do not need to walk into a store with 20 aisles to choose from. I was at a 7-Eleven up in Isaan once and (of course) they will stock their store a little bit differently-such as no Coke Light or packaged Danish muffins. These mini-marts such as Family Mart and 7-Eleven that have cropped up in the small cities or rural areas of Thailand have been a great addition since the locals can convientlly get the same products (some) that would be only sold in big cities, purchase their minutes for their phone, pay their bills... where as they use to have only the junky, ma & pa shop to shop at-with no airconditioing! (my opinion)

I wish in the States there were small convenient stores like 7-Eleven within a few blocks of ones home so you would not have to drive 1-3 miles to a supermarket, park your car, then have a 10+minute walk to get your one bottle of detergent, tampons for your wife, and a candybar then wait in line for another 15 minutes and then drive back home. I suppose the zoning laws now days would not allow a small store in a neighborhood due to all the restrictions.

[tropo]

Poor business sense isn't exclusive to Thai's, however, what they do lack is innovation. Easier to copy a business than to think of something original.

IMO you're being too harsh on Thais with this conclusion and even showing some anti-Thai sentiment, which always comes up in any thread about Thai businesses.

Innovation is always limited to a small number of entrepreneurs in any country, and limited to people with the courage and funds to take risks. The rest copy. Go to any shopping mall in any country and you'll see the same type of businesses repeated over and over. That's what most of us do. i.e. Stick with something we know works, rather than risk money on something which hasn't been tested.

Using 7Elevens and Family Marts as examples to make the assumption that Thais are useless at business is also unfair, because do we know how much profit these stores make? I find many of these convenience stores are very busy and probably make a fair profit. Unless we see some detailed balance sheets, who's to know. My local store is often out of certain products despite there being 6 more down the road, so they are selling quite a bit of stuff.

Edited July 23, 2015 by tropo

[misterphil]

Have you ever been to Koh Samet? The 2 x 7/11 shops there are opposite each other. If you step out of one of them, cross the 10m across the road and your in the other one.

[Asiantravel]

As previous posters with direct experience of how 7/11 works in USA have said the franchise agreement in America (see link below) specifically rules out any protected territory. I don’t know how this agreement compares to the one in Thailand but all in all I regard it as a very one-sided deal in USA.

On page 4 paragraph 7 entitled License and under subparagraph ( b ) Reserved Rights

it says

“You agree that this Agreement does not grant you any exclusive or protected territory. You agree that we and our Affiliates retain all other rights, including the right to establish and operate, and to grant others the right to establish and operate, convenience or other stores under the Service Mark and Related Trademarks, any trade names, and other service marks and trademarks, at any site other than the Store location, including sites that are adjacent or proximate to the Store location “

http://www.sec.gov/Archives/edgar/data/92344/000119312505052213/dex10iib1.htm

Edited July 23, 2015 by Asiantravel

[Joey J]

Let's be honest. They are good.

[petercool]

I have few 7/11's close to where I live and it seems that some have frontages that are always blocked with motorbikes so I can't park while others have better parking. Some are on the side of the road that I am driving on when I go one way and the others are only on the right side for parking when I drive back. Having this choice suits me and since most of these shops seem to thrive it obviously suits other people too at different times.

[daiwill60]

I think it was in Ubon or near there , near a bridge crossing the Moon River on a big crossroads or roundabout, that I saw 4 7/11s within 200mtrs of each other, o each of the 4 roads leading off the junction ???

Actually , where I now live on the outskirts of rayong , we have 2 7/11, a Tesco Lotus and a family mart and other privately run minimarts within a 100 metre stretch of road.

If I had invested in a 7/11 business , I would be livid.

Edited July 23, 2015 by daiwill60

[SoiBiker]

http://www.uh.edu/engines/epi2692.htm

[NoshowJones]

You must be bored to worry about 7-11 being to close together.

How must he be bored? It is an interesting topic, and he is asking what a lot of people are thinking.

Like I always say, this is what helps Thaivisa to be so successful.

[NoshowJones]

If someone opened a 7-11 next to mine I'd hire motor show pretties to work the tills. Not let those bastards steal my business

Then they would do the same.

[NoshowJones]

When I arrived in my village about ten years ago, there was only one small 7-11, now there is also a big 7-11, and a Tesco Lotus Express, I am the only Farang living in the

village, neither my wife nor her family eat Western food, yet someone, must be buying up the bread, snacks etc.

I know 7-11 sells lots of things besides food, but the bread sure goes very quickly in those shops.

[DrDave]

When our daughter started working at 7-Eleven, I did a little research into the7-Eleven franchise just to understand how things work. As others have noted, the "franchise" is more like a rental, as the franchise agreement is for a fixed number of years. There's no protected territory, so if CP All (the master franchisee for Thailand) decides they can make a little more money by having 2 stores in close proximity, that's what they'll do (all at the expense of the original franchisee). For example, let's say I buy a franchise and I'm doing 1 million baht per month in sales. CP All decides that if another 7-Eleven were to be opened 50 meters down the street, they could increase their revenue to 1.2 million baht in total. Never mind the fact that my sales will drop to 600,000 and the new store will do just 600,000 - not their problem, they're making incrementally more money.

Now that our daughter is working there, I have a little more insight into the dark side of local store operations. I don't know if all stores have the same policies, but for this particular store the employees work a 9 hour shift with no designated meal period, six days per week. Pay rate seems to be a fixed 400 baht/day. It is yet to be seen if she gets any OT for the days when she works a 12 hour shift, or the days where she has to stay an extra hour or so because the next shift is late. The worst seems to be that employees must share the expense of stolen items as well as food items that do not sell prior to their expiration date. For example, if the inventory comes up short 8,000 baht and 2,000 baht of food products are expired in a month, then this 10,000 baht expense is divided among each of the 9 employees and is cut from their pay. In this case, 1,100 baht is deducted from each employee's approximately 10,000 baht paycheck. I'm still waiting for verification of this, but if true, she will not be working there much longer. (This might explain why there is such high store-level employee turnover at 7-Eleven).

[Asiantravel]

When our daughter started working at 7-Eleven, I did a little research into the7-Eleven franchise just to understand how things work. As others have noted, the "franchise" is more like a rental, as the franchise agreement is for a fixed number of years. There's no protected territory, so if CP All (the master franchisee for Thailand) decides they can make a little more money by having 2 stores in close proximity, that's what they'll do (all at the expense of the original franchisee). For example, let's say I buy a franchise and I'm doing 1 million baht per month in sales. CP All decides that if another 7-Eleven were to be opened 50 meters down the street, they could increase their revenue to 1.2 million baht in total. Never mind the fact that my sales will drop to 600,000 and the new store will do just 600,000 - not their problem, they're making incrementally more money.

Now that our daughter is working there, I have a little more insight into the dark side of local store operations. I don't know if all stores have the same policies, but for this particular store the employees work a 9 hour shift with no designated meal period, six days per week. Pay rate seems to be a fixed 400 baht/day. It is yet to be seen if she gets any OT for the days when she works a 12 hour shift, or the days where she has to stay an extra hour or so because the next shift is late. The worst seems to be that employees must share the expense of stolen items as well as food items that do not sell prior to their expiration date. For example, if the inventory comes up short 8,000 baht and 2,000 baht of food products are expired in a month, then this 10,000 baht expense is divided among each of the 9 employees and is cut from their pay. In this case, 1,100 baht is deducted from each employee's approximately 10,000 baht paycheck. I'm still waiting for verification of this, but if true, she will not be working there much longer. (This might explain why there is such high store-level employee turnover at 7-Eleven).

Dr Dave if they are deducting amounts from salary I can’t believe they would be allowed to do that legally. Surely it would be the franchisee that should bear those kinds of costs?

Whilst I don’t recommend you identify yourself or your daughter I would write an anonymous letter to the Department of Labour protection and welfare (see link below) using a third party or a fictitious name and a different address explaining why you don’t want to identify yourself but saying you believe it’s very unfair to penalize ordinary employees this way by deducting over 1000 baht and are they legally allowed to do it?

With regards to your daughter working a 9 hour shift with no designated meal period, six days per week the Department of labour website says in paragraph 2 of Rights and Duties Employer and Employee

Rest period during normal work

An employee is entitled to a rest of not less than 1 hour a day after work for 5 consecutive hours.

An employee may take the rests periodically of less than 1 hour but the total rest period per day must not be less than 1 hour.

In case of a beverage shop or a food shop where dose not open or provide service continuously on each day, an employee may take to a rest of 2 hours a day.

An employer who obtains an employee’s prior consent may not arrange a rest period for the employee in case of emergency work, or character or nature of work needs it to be performed continu­ously

http://www.labour.go.th/en/index.php/home