Last updated on November 21st, 2018
The Board of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) has taken a vote of no confidence in the management of 7-Eleven Inc. (SEI). The board’s decision reflects franchisees’ belief that SEI has failed to focus resources and energy on improving declining store-level net profits, instead shoring up corporate gross profits at franchisee’s expense.
NCASEF is the national trade association for 7-Eleven franchisees, representing the owners of nearly 7,000 franchised locations in the United States. The national coalition’s no confidence vote reflects a number of related issues, including:
• Presenting owners with a new franchise agreement which will lead to the continued decline of profitability–and doing so in a coercive, “take it or leave it” fashion without collaboration, input or negotiation with owners;
• Failing to devote capital to stores in dire need of remodeling and refurbishing;
• Failing to replace worn out equipment; and
• Failing to disclose to prospective franchisees the substantial risks associated with investing in an SEI franchise.
“We are at an absolute low point in the history of 7-Eleven in the United States,” said Jay Singh, NCASEF chairman. “A recent survey of our franchise owners shows how bad things really are. Only 18 percent of current owners say, if they had to do it all over again, they would invest in 7-Eleven.”
In a further sign of the distrust and disgust franchisees feel for their corporate parent, an overwhelming majority of NCASEF’s Board of Directors has voted to skip the 2019 7-Eleven Experience, the company’s annual trade show. NCASEF is urging all members of its franchisee associations to do likewise.
SEI earns millions of dollars from vendors who pay to exhibit at the trade show, but there is no assurance that money is used to help lower the cost of goods franchisees pay. In fact, SEI makes no guarantee that franchisees receive the lowest cost of goods from the supply chain SEI runs. This has been a sticking point for franchisees for years.
“Franchisees believe SEI should account for the money it earns from the trade show. There is a lack of transparency and that has driven a wedge between franchisees and the corporation,” said Singh. “We are the face of this brand and we deserve to be treated fairly. Without our hard work and dedication to this brand, 7-Eleven’s U.S. stores would not be the economic engine the Japanese parent company relies on for its corporate profits.”
NCASEF has repeatedly requested SEI Chief Executive Joe DePinto take steps to repair the broken relationship the company has with its store operators, and renegotiate the 2019 franchise agreement so the terms are more equitable for franchise owners.
Keep reading:
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7-Eleven Franchise Owners Urge Corporation To Revise Agreement Terms
