Report - Greenware

What Kind of Convenience Store Is Most Profitable?

A convenience store is a kind of business that is relatively easy to start, especially for new immigrants who may face challenges in finding professional jobs due to a lack of social networks or language barriers. However, it is a big question on how to find a profitable convenience store. The first factor that jumps into our mind would be the location. It is absolutely right that the location is the most important to consider when investing in a convenience store. But is it enough to only think about the location? What else should we consider besides the location?

Greenware Services, a data analytics company, collaborated with Charles Parson, a real estate agent from Homelife/Response Realty, to conduct research on the historical transactions of convenience stores. Our findings revealed that other factors beyond location are also critical to a store's profitability. Here are some of the key findings from the research.

Size

Does the size affect the store’s revenue? The answer is YES and NO. When the store’s size is larger than 1000 ft2, the store’s revenue increases with its size. However, the size has little influence on the revenue of small convenience stores with an area less than 1000 ft2. Therefore, when selecting a profitable store, especially small ones, other factors such as geographical location need to be given more attention.

According to Greenware Services’ research, small convenience stores with an area less than 1000 ft² have an average value of $85,000. This highlights the importance of careful consideration when selecting a profitable store, especially for small businesses. Greenware Services will have another report about how to select the best location for a convenience store.

Franchise V.S. Non-Franchise

When it comes to choosing between a franchise or non-franchise convenience store, investors often face a dilemma. Franchise stores provide the advantage of being better regulated and easier to start due to the training and support provided by the franchise. However, this support comes at a cost, including management fees and limitations on business freedom. On the other hand, owners of non-franchise stores have more freedom to run their business without any management fees, but they need to put in more effort into management and promotion.

Considering the pros and cons of both types, investors may wonder which one is more profitable. Greenware Services’ analysis found that franchise convenience stores have a higher value compared to non-franchise stores. On average, franchise convenience stores generate about 20% more revenue than non-franchise stores, indicating a significant difference in profitability.

It’s important to note that profitability can still vary depending on factors such as market conditions and management skills. Therefore, investors must carefully weigh the pros and cons of each option and evaluate their individual circumstances before making a decision.