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PHILIPPINES -- Philippine Seven Corp., the local operator of 7-Eleven stores, has earmarked millions of dollars for capital spending to upgrade its stores by remodeling, maintaining and replacing store equipment, according to news reports.

BusinessWorld reported that in a filing, Philippine Seven President Jose Victor P. Paterno said the company would work towards optimizing the earnings of its store base by opening new stores in strategic locations and closing underperforming sites.

"We plan to open more stores in 2006 to achieve our strategic objectives and protect our market leadership. Our new store development efforts will focus on our existing markets to take advantage of population density and leverage our current distribution capabilities," he said. "We will continue to assess new store locations by evaluating demographics, traffic volume, visibility, population density, ease of access and economic activity in the area."

At the end of 2005, Philippine Seven was operating 265 stores -- 22 of which are franchise stores; 64 stores are operated under a service agreement; and the rest are company-owned. The store franchise and service agreements have a minimum term of five years each renewable for a similar term.

"We will continue to embrace franchising. We will continue to build on the success of our franchising initiatives by strengthening our franchise selection, development and retention process and doing our best to ensure success of our franchisees," Paterno said.

Building on the success of its advertising and promotion initiatives in 2005, Philippine Seven has more programs lined up this year to boost sales, margin and customer count in partnership with its suppliers.