Despite claims that franchisees have struggled to make a profit under the 7-Eleven franchise, the story of star performer Theresa Zhou stands counter to this.
Inside Franchise Business goes behind the scenes with 7-Eleven’s stellar franchisee who shares her secrets to success without compromise.
Zhou is currently the Port Melbourne franchisee who has owned a number of 7-Eleven stores. Her customers are a mix of families but also busy professionals and tradies.
“I have been a 7-Eleven franchisee for nearly 19 years, first joining in March 1998,” she says.
“Since then, I have run a number of different stores in Melbourne. I’m about to sign a new agreement and am looking forward to the next 10 years.”
As a newbie franchisee Zhou understood business: she had extensive experience running an interior design firm in China. But like many culturally-diverse 7-Eleven franchisees, she faced the challenge of language barriers and had little experience of retail.
“I came to Australia to study, and really enjoyed it here. It is a safe and peaceful country and I wanted to provide that for my family,” she explains.
“(But) it is much easier to do business in a country you are familiar with, where the language is your first language.
“When I came to Australia, I had to learn new laws and ways of doing business in a different language, it is very difficult.”
This is why she selected the 7-Eleven franchise.
“They provided not only a lot of support to help me learn a new business in a different industry, but also managed many elements of the business such as property and leasing, equipment and maintenance, product buying, supply chain and marketing,” says Zhou.
The franchisor provided her a system to follow with clear instructions. In her view, if you follow the system and policies “it’s easy doing business”.
But there were obstacles at the start.
“The first few years were a very steep learning curve; learning how to be a retailer, understanding all the laws and regulations and taxes that apply to running a fuel and food business, and building a team and a business in a new country,” she admits.
Zhou says at first the role required 10-12 hour days as well as a few hours visiting the store on weekends to get the momentum going. Even with experience, she says it is important to work hard on the business. These days she is clocking in a minimum of eight hour days during the week, and still checks in with her employees on weekends.
“7-Eleven’s training and support systems, and the guidance of my district manager, were crucial in helping me through that early learning curve.”
Staff are an asset
The retail industry depends on excellence in customer service and franchisees thrive when staff are talented, performing and motivated.
7-Eleven’s underpayment scandals rife in the media last year suggest some franchisees have exploited rather than supported their employees.
Zhou says, “Finding and managing staff is also a challenge, particularly given the 24/7 nature of the sector.”
This is why in her view, “it’s important to see staff as an asset, rather than a cost”, as they can deliver value to the customer, driving repeat visits and building the business.
“So good staff are worth investing in (and) 7-Eleven’s training and support system helps new employees get up to speed quickly,” she explains.
But how many employees are needed for effective and profitable operations?
Zhou says it depends on the size of the store, having owned a few in the last 19 years. Although she doesn’t quote numbers, she does say that the number of staff she has now is similar to when she started.
“I have a range of people who work with me. One of my family members works for me, and he is my second in charge in the store,” she continues.
“I have some uni students including some international students, but the restrictions on international students’ number of working hours can make rostering difficult as many can only work 40 hours a fortnight.”
But Zhou likes things done a certain way.
“I like myself or my second in charge to do the ordering and the key management parts of the business, but otherwise I like my team to take care of the shop and our customers.
“I like investing in people who care about my shop and love what they do too. I provide jobs lists, everything from cleaning to filling stock, and the team also focus on the customers. They help the customers and upsell.
“You need to make sure you have enough staff rostered so you can spend your time managing your business, training and coaching, and growing sales.”
Zhou says the extended working hours required of the 7-Eleven fuel retail format are easy for her to manage.
“I recruit good people, and make it clear that working shifts, including night shift, is part of the job before they start. I pair new people up at first with more experienced people so they can get more experience and get extra coaching before they work shifts on their own,” she explains.
“I’m fair, and try and work around people’s schedules where possible, but ultimately my staff need to be prepared to contribute to maintaining the highest standards in-store 24 hours day, seven days a week.
“The night shift team and the quality of the work they do is really important to the store, while it usually isn’t as busy at night, that is when much of the work to prepare for successful trade in the busy times is done.”
Despite the allegations of franchisee mistreatment of workers in media reports last year, Zhou has an active approach to managing staff.
“You have to have a good relationship with your employees, mutual respect and being fair is important. You’ve got to help them and coach them, if they are busy all the time with no help, they aren’t happy, so you’ve got to support each other.
“That’s why you should spend time in your store even when you are not rostered on, it is really important to provide your employees with coaching and support, even if they don’t work the same shifts as you do.”