CP ALL TO INCREASE NUMBER OF 7-ELEVENS

       CP All, the operator of 7-Eleven convenience stores, is planning to increase the number of franchised stores to 60 per cent within five years.
       Managing director Piyawat Titasattavorakul said yesterday that franchised stores showed higher margins than the company's own stores, because they are run by individual entrepreneurs for whom efficiency and returns are the top priority. The plan is also in line with the company's policy to create more entrepreneurs.
       At present, the number of 7-Eleven stores exceeds 5,000, with 2,344 or 45 per cent being run by franchisees. The company wants the proportion of franchised stores to increase by 3 per cent per annum.
       "Ninety per cent of stores in countries like Japan and the United State is run by franchisees. We would like to do the same. CP All plans to only operate 3,000 branches and franchise the rest," he said.
       Anittha Thanamit, assistant managing director, said that to support this policy CP All would have to offer franchisees more attractive returns.
       At present, CP All offers two franchising models. In the first model, franchisees have to invest Bt1.5 million per branch, of which Bt500,000 will be spent on franchising fees and store decoration, with the remaining Bt1 million held back as a deposit that will be returned to franchisees if they want to bow out.
       The second model requires an investment of Bt2.65 million per branch, of which Bt900,000 is put aside as a deposit guarantee and the remaining Bt1.75 million spent on franchising fees, store decoration and management.
       Under the second model, CP All promises that investors can breakeven within three years.
       Aside from the expansion of franchised stores, CP All is also planning to get 7-Eleven stores to focus more on food and beverages.
       Piyawat said consumer goods generated a margin of around 10 per cent, while foods and drinks roughly 20 per cent. Besides, some of the food and drink items sold in 7-Eleven are produced by the Charoen Pokphand Group, CP All's parents company.
       He added that at present 80 per cent of the products sold in 7-Eleven were edibles, and the firm plans to increase this proportion to 85:15 in the next three years.