7-Eleven and the American Dream

This is Our American Stories, and as you all know by now, some of our favorite stories to tell: the stories about businesses, because these are the American Dream. Often, the American Dream is starting your own place. By the way, it also means coaching a football team, or starting a church, or being a nurse. But we have a general fondness of people who start businesses, because where do jobs come from? We previously told you the story of Jim Keys and how he rose out of poverty to become the CEO of 7-Eleven and save the company from collapsing after filing for bankruptcy. Today, Jim joins us again to tell another story of 7-Eleven. Here’s Jim with the story.

Around the time the company that filed for bankruptcy, I went to my mentor at the time, the person who had encouraged me to come to 7-Eleven, a guy named John Thompson. He was the son of the founder of 7-Eleven. 7-Eleven started in 1927 with an ice house, an ice dock in Oak Cliff, just south of Dallas, and it was selling 50-pound blocks of ice to people to put in their “icebox.”
Literally, there’s no refrigeration.
At the time, you couldn’t just plug in a refrigerator, so it’s hard to imagine that in 1927 we were still doing this. And…
How did you get ice to Dallas, Texas?
So, they were a very successful company, but it was quite a process to mine ice literally from the North, get it to the South, store it in an environment with no refrigeration. They had to store the ice literally underground, and to sell it in small blocks that people could put in their icebox to keep their milk and…
Their eggs cold.
So I went to John Thompson and said, “Should I leave the company? I haven’t made a bad career choice here, here, and I’ve only been here for five years.”
I’m still a pretty young guy. You’re bankrupt.
We’re bankrupt. People are saying 7-Eleven is no need to exist anymore, because grocery stores would open 24 hours. Everyone else sold beer and cigarettes. And he said, “That’s precisely the problem,” he said. “If you go back,” he said, “I’ll just tell you what my daddy told me: the story of the Frigidaire being invented sometime around 1928.”
He said, “Here, we were selling ice.”
“And we would have gone out of business by 1930. But my Uncle Johnny Green,” he said, “started asking customers what they want, and what they told him was, ‘We don’t come here for the ice. We come here for the convenience of buying ice from you, or how else were we going to get ice?'”
Right, so you make it convenient.
“Well, now we’ve got Frigidaire, we don’t need ice anymore. We’ve got our own refrigerator to keep things cold. Why don’t you sell us things to put in that more conveniently than having to run to the grocery store?”
And so they did.
So that literally was the birth of the first convenience store, 7-Eleven, that was called U-Tote’m at the time, and they emerged from there. John’s lesson to me was that he said, “Jim, if you’d dial forward to 1990, 1991, we’ve gotten ourselves to the point now where we sell beer, soft drinks of cigarettes, because those things used to be more convenient to buy here than somewhere else. But everybody sells those now. So your job is to find things that people need more conveniently. And if you can do that, there’s no reason,” it said, “convenience will never go away. Beer and cigarettes may diminish, but convenience will never die.”
And I took him. I took him to heart.
I stayed with the company, started becoming obsessed with finding things, whether it was a multifunction ATM that we could put in every store, prepaid phone cards that I found in Asia and brought back to the United States, a beer with an aluminum bottle that you see now, you know, everywhere that we used to differentiate. I found that product in Asia and brought it back here to the United States and convinced Budweiser and to make.
It first, and lots of ways.
to innovate with convenience, and that differentiates gave us 10 years of improved…
same-store sales and helped make my career.
I talk a lot about the American Dream now, and I talk of a lot about being the beneficiary of the American Dream.
But I never really…
understood it or talked about it in personal terms until I discovered from my first-generation 7-Eleven franchisees what the American Dream early was. And that occurred in a backwards way again. It occurred through crisis, through catastrophe. It happened on 9/11. I was on my way to work. I was actually stopping at the office to pick up a bag and…
head to New York City on 9/11.
By the time I got to the office, of course, the first tower had been hit, and my flight was canceled, and we were all gathered around the TVs trying to figure out what was going on.
And it wasn’t long.
It was probably right after the second tower fell, and there was now confirmation that this was a terrorist attack, that we started getting inbound calls about franchisees.
We had…
In the worst case, right in Chicago, we had an off-duty police officer go up to one of our franchisees, a Sikh Indian gentleman, put a gun to his head, and said, “Go back home. You just blew up the…”
World Trade Center.
So it was a blanket stereotype. Everyone in our stores — from Indians to Pakistanis to Mexican immigrants who were running a store or in a store — were perceived to be the problem.
That was a wake-up call for all of us.
We invoked our Y2K protocol, which, interestingly enough, we had just come through Y2K without any incident. But thankfully, we put a protocol in place that allowed us to communicate with every single store on an hourly basis in case…
there were problems.
So, we put that protocol in place and were shocked at the number of incidents that were occurring all over the country in our stores where first-generation Americans were being persecuted for their image, not even their religion, or their or their ethnicity, just for their image in the store as non-American, perceived to be non-American. So we put a number of things in place, where were the first to reach out to the American Red Cross and said we want to bury our stores in red, white, and blue.
We did the little red…
white and blue ribbons and started selling them for a dollar with a contribution going to the Red Cross. We had are raising like $300 million bucks in the first 30 days to be able to help in some way.
But our objective was somewhat selfish.
We wanted to Americanize the stores and deflect this perception that people had that we were not American. Following that, I began to talk to franchisees why…
are we, you know?
We had been the butt of Jay Leno’s jokes, David Letterman’s jokes. Jay Leno one time gave me an award here in Dallas, and when I walked off stage, everyone was laughing, and I didn’t understand why they were laughing. And I sat down and was told, “He just, as soon as you walked off stage, ‘That, can you believe it? A guy from 7-Eleven who speaks English?'” And so I…
realized, “We’ve got a bad…”
image here that is not, I mean, maybe it’s, maybe it is true. Why are we so heavily minority in our stores? And I started asking franchisees, “How’d you get here? Why did you become a 7-Eleven franchisee?” And the stories were all very much the same. They were ironically…they were in my story: “I came from nothing” or “I came from a country where I had things, and I came to this country with nothing. I came here with $500 in a suitcase. And I knew that hard work in this country would pay off. And so I found that if I go to a 7-Eleven store, I can work on my own. I can either work for another franchisee, and if I work really hard, to help me save enough money to get my own business.”
And then the…
harder I work, the more I can make. And if I want two stores or three stores, I can get those. That’s 7-Eleven, that’s Subway, that’s McDonald’s. It’s the same story. Many of the franchisees are related, and so if you go to a place like Los Angeles, I found there are interrelated families where, you know, one family would be successful, and they’d invite another family to come work in their store, and then that would shoot off five more franchisees. And I’ve realized this is the American Dream. It’s what these people…They’ve discovered the American Dream here, and in our own backyard, we have people that think there are no opportunities here and they’re not partaking of the American Dream.
So, let’s celebrate this.
So I took them all to Ellis Island for the 75th anniversary of 7-Eleven. We were bringing a lot of international people to Ellis Island that sort of freaked out the…
park police, and, but we got approvals to do this.
We had, we had a massive event there, and I did it on Ellis Island on purpose to celebrate the diversity of…
7-Eleven. We had one of those beautiful things.
We had a parade of 135 little kids, each carrying the flag of a country that was represented by a franchisee. All our franchisees from all over the world — from China, from Taiwan, Sweden, from everywhere — all came in. We had literally 135 or so nationalities represented, in the fireworks, and the whole thing.
on Ellis Island.
But I gave a speech, and I brought up a guy who was the head of the franchise organization, and he and I had discovered that we both lived in the same building in New York City. It was called the College Residence Hotel. It was a little by the day or maybe by the hour kind of hotel. It was a pretty shady place.
It was all I could afford; it was all he could afford.
We discovered that we lived there at the same time, and that I was staying there because I couldn’t afford a place in New York. When I was in Columbia University, I literally drove back and forth because gas was cheaper than an apartment until I found this place that I could actually afford. He was staying there because he came $500 bucks in his pocket and a suitcase. So, here we were, two very poor individuals with different paths. I went to Columbia University, ended up at 7-Eleven, became CEO of the company.
He stayed in…
that franchise store, got a second store or third store, became a franchisee of four or five stores on Long Island. He was ironically making more money than I was at the time.
But those are two…
exact outcomes celebrating the American Dream. We both told our story on Ellis Island, celebrating the American Dream. Both different paths, but both classic examples of the American Dream. My favorite franchisee story at 7-Eleven.
The story of the American Dream, told as well as it can be told. Jim Keyes, his story, his franchisee stories. Here on Our American Stories.