Managing a franchise-based business

This Case Study investigates how 7-Eleven Australia manages a franchised-based business. It examines how 7-Eleven Australia has successfully implemented a long-term strategic plan to improve operations and how it uses market research, ICT systems and other strategies to improve operational performance.

By reading this Case Study students should be able to:

• Explain the major issues associated with managing a franchise-based business 
• Describe the strategies implemented by 7-Eleven Australia to improve operational performance
• Evaluate the success of these strategies in relation to competitive forces within the retail convenience market sector.

Introduction

7-Eleven is the world's largest operator of convenience stores with more than 35,000 franchised and licensed stores in 17 countries generating annual sales exceeding $36 billion.

What is franchising?

A franchise is the granting of rights by a franchisor to allow a franchisee to use the name, systems and market profile of the franchise in return for a percentage of revenue.

Responding to a changing marketplace

Since its launch in 1977 as the first franchised convenience store in Australia, 7-Eleven has had to keep pace with changing market conditions.

Using technology to meet demand

Like all sophisticated retailers 7-Eleven has developed a suite of ICT systems to support operations.

Building an effective supply chain

Modern effective supply chains are increasingly integrating ordering, distribution, warehousing, logistics and ICT solutions as part of effective business-to-business (B2B) networks.

Conclusion

The retail convenience sector has continued to evolve, and competition, which now involves retail giants Woolworths and Coles, has become even more intense.