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7-Eleven Franchisees Vote 'No Confidence' in Parent Company

Coalition requests 'more equitable' franchise agreement
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Image courtesy of NCASEF

Updated 2:50 p.m. CST, Nov. 19, to add 7-Eleven statement.

SAN ANTONIO -- 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 expressed in a survey that SEI has failed to focus resources and energy on improving declining store-level net profits. NCASEF says that, instead, SEI is "shoring up corporate gross profits at franchisees' 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, the coalition said in a press release. The group said these include:

  • Presenting owners with a new franchise agreement that 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.
  • 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% of current owners say if they had to do it all over again, they would invest in 7-Eleven.”

Click here to see full results of the national coalition’s survey.

Meanwhile, 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.

“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.” The board took similar action last year.

NCASEF said it has repeatedly requested 7-Eleven CEO Joe DePinto take steps to repair the relationship the company has with its store operators, and requested a renegotiation of the 2019 franchise agreement so the terms are more equitable for franchise owners.

7-Eleven Inc. responded to the coalition's press release with the following statement:

“We expect the vast majority of franchisees to attend this year’s 7-Eleven Experience. Franchisees tell us that the 7-Eleven Experience helps them grow their businesses. That’s why we invest millions of dollars each year to host the event. Last year, more than 280 vendors offered franchisees more than 850 preordering opportunities. Additionally, experts from the 7-Eleven Store Support Center and other outside vendors were available to answer franchisees’ questions on a range of topics, including store safety, digital enhancements, merchandising best practices and simplifying store operations.

"We continually work hard to make resources available to franchisees to help them increase their gross profits. We know that we succeed when franchisees succeed, and the 7-Eleven Experience is all about celebrating that relationship."

With more than 9,000 convenience stores, Irving, Texas-based 7-Eleven Inc. ranked No. 1 on CSP's2018 Top 202 list of the largest c-store chains in the country.

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