Avanti January/February 2020 by Avanti Magazine

January/February 2020

T H E

V O I C E

O F

7 - E L E V E N

F R A N C H I S E E S

It’s Time To Grow Membership Controlling Vs. Motivating As Seven Eleven Japan Goes…? The Playing Field Must Be Leveled Don’t Worry, Be Happy! Why The Franchise System Is Broken

Membership: “Strength In Unity”

“None of us is as great as all of us together.” —Bill Schussler, NCASEF Chairman, 1978

Join your local FOA today!

Visit NCASEF.com and sign up for Dispatch!

Save The Date! NCASEF 2020 CONVENTION Gaylord National Resort & Convention Center National Harbor, Maryland

August 10-13, 2020

PRSRT STD U.S. POSTAGE PAID Philadelphia, PA PERMIT No. 5634

THE VOIC E OF 7-ELEVEN FRANC H ISEES

January/February 2020

Contents 25 It’s Time To Grow FOA And National Coalition Membership By Jay Singh, Chairman, NCASEF, President, South Texas FOA

29 Serve, Lead, Do What’s Right—Controlling Vs. Motivating By Michael Jorgensen, Executive Vice Chairman, NCASEF, President, Central Florida FOA

33 As Seven Eleven Japan Goes…? By Eric H. Karp, Esq., General Counsel, NCASEF

Save The Date! NCASEF 2020 CONVENTION

Dispatch at NCASEF.com

Gaylord National Resort & Convention Center

49 Digital Promos Come At Franchisees’ Expense 48 NCASEF Says Deaf Ears Are Bad For The Brand 48 Franchisees Raise Concerns Over SEI’s Retaliatory Tactics

National Harbor, Maryland

August 10-13, 2020 Fun & Deals At FOAGLA/San Diego FOA Trade Show Page 50

Features

San Diego Franchisees End Year On A High Note

42 Why The Franchise

System Is Broken

Page 52

54 Midwest FOA Holiday

Party A family And Cultural Affair

Pink Out Honors Franchisee’s Wife

By Arnold Hauptman, General Counsel, United Franchise Owners of Long Island and New York

PA R

39 Don’t Worry, Be Happy! By Serge Haitayan, President, Sierra FOA

54 Midwest FOA’s Team

REMEMBERING DON HEFNER Page 16

AVANTI is published by the National Coalition of Associations of 7-Eleven Franchisees for all independent franchisees, store managers and interested parties. National Coalition offices are located at 1001 Pat Booker Road, Suite 206, Universal City, TX 78148. For membership information, call 702-249-3301 or e-mail nationaloffice@ncasef.com. AVANTI Offices are located at 116 Bellevue Ave., Suite 304, Langhorne, Pennsylvania 19047. For advertising information, call Sheldon Smith at 215 750-0178 or fax to 215 750-0399; on-line, send messages to sheldon.smith5@verizon.net. The views and opinions expressed in the articles and columns published in Avanti Magazine are those of the authors and do not necessarily reflect the official policy or position of the National Coalition of Associations of 7-Eleven Franchisees, its officers or its Board of Directors.

37 The Playing Field Must Be Leveled

Member News.................................10 Bits & Pieces ..........................................12

Join Your Local FOA.....................14 Legislative Update................22 SEI News...................................68 Vendor Focus..........................70 Franchisee Calendars......66,74

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NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES NATIONAL OFFICERS & STAFF

7-Eleven Hits 70,000 Global Locations SEI recently announced that the company has hit a major growth milestone—topping 70,000 stores worldwide. 7-Eleven can now be found in 17 countries and regions around the globe. The first 7-Eleven store in India is expected to open this year, expanding the company's operations to 18 countries, SEI said in a released statement. Last year, 7-Eleven opened one store approximately every 3.5 hours. As 7-Eleven continues to grow, the company said it remains focused on its role as a good corporate citizen, addressing social and environmental issues important to customers and the communities in which they live and work.

“e first 7-Eleven store in India is expected to open this year, expanding the company's operations to 18 countries.”

SEI Acquires 7-Eleven Stores In Oklahoma SEI recently announced that it has entered into an agreement to acquire “7Eleven Stores” of central Oklahoma,

which includes more than 100 7Eleven-branded locations that have been operating independently for 67 years. All of the stores being acquired are located in the greater Oklahoma City metropolitan area, bringing the total number of 7-Eleven stores in the U.S. and Canada to more than 9,700. The c-stores owned and operated by 7-Eleven Stores are the only independently owned retail outlets that carry the 7-Eleven brand, through a special arrangement between owner William Brown and 7-Eleven, Inc. in 1953, reported CSP Daily News. The Oklahoma stores are not licensees or franchisees of the national chain; they are totally independent.

Jatinder Singh NATIONAL CHAIRMAN

702-249-3301 • jays@ncasef.com

Michael Jorgensen EXECUTIVE VICE CHAIRMAN

347-251-1828 • mcjorg@yahoo.com

Paul Lobana VICE CHAIRMAN

818-203-2527 • paullobana@aol.com

Rehan Hashmi VICE CHAIRMAN

847-845-8477 • rehan711@yahoo.com

Ajinder Handa VICE CHAIRMAN

425-438-8381 • ajinderhanda@hotmail.com

Jaspreet Dhillon TREASURER

310-892-2106 • jaspakam@gmail.com

Shawn Howard OFFICE MANAGER

210-971-9211 • shawnh@ncasef.com

Eric H. Karp, Esq. GENERAL COUNSEL

617-423-7250 • ekarp@wkwrlaw.com

SEI Plans 20,000 Stores By 2027

John Riggio

7-Eleven Inc. intends to celebrate its 100th anniversary in 2027 with the opening of its 20,000th convenience store—but it might happen earlier, reported CSP Daily News. In an article announcing its Power 20: The Deal Makers list of retailers on the forefront of store expansion, the trade publication

Sheldon Smith

continued on page 12

MEETING/TRADE SHOW COORDINATOR

262-275-3086 • jrpinc@charter.net

AVANTI PUBLISHER ADVERTISING MANAGER

215-750-0178 • sheldon.smith5@verizon.net

Sheldon Smith PUBLISHE R & ADVERTISING SALES 215 750-0178 SHELDON.SMITH5@VERIZON.NET

The National Coalition Office The strength of an independent trade association lies in its ability to promote, protect and advance the best interests of its members, something no single member or advisory group can achieve. The independent trade association can create a better understanding between its members and those with whom it deals. National Coalition offices are located in Universal City, Texas. 10

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John Santiago ASSISTANT EDITOR 215 750-0178 AVANTIMAG@VERIZON.NET

1001 Pat Booker Road Suite 206 Universal City, TX 78148 Office 210-971-9211 E-mail: nationaloffice@ncasef.com

The Voice of 7-Eleven Franchisees January/February 2020 © 2020 National Coalition of Associations of 7-Eleven Franchisees Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.

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profiles SEI’s vice president of development and M&A, Ian Williams. He said he is confident the company can reach its goal, and revealed SEI’s three-legged “disciplined growth strategy”: • Increase 7-Eleven’s market concentration in established key areas. “We know that building new stores or acquiring quality assets in highly concentrated areas is more effective for our business and our franchisees,” Williams said. • Grow the company’s Business Conversion Program. • Acquire other quality locations to support and accelerate growth areas in existing markets and with sufficient scale to support new markets to reach customers underserved by the company’s existing store base.

“7-Eleven is still #1 on CSP’s list of largest c-store chains, with 9,364 locations in the U.S.”

Seven & I In Talks To Buy Speedway Marathon Petroleum Corp.’s Speedway gasstation division has drawn interest from potential buyers, including 7-Eleven’s parent company, reported Bloomberg. Seven & i Holdings is working with advisers as it considers a takeover of Speedway, according to Bloomberg’s sources. Any acquisition of Speedway could value the business at more than $20 billion, the sources said. Marathon Petroleum, a refiner under pressure from activist investors to break up, is exploring a sale of Speedway after announcing plans last year to spin off the retailer. Speedway, with about 4,000 stores in the U.S., could be worth as much as $18 billion including debt as a standalone company. 12

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7-Eleven #1 On CSP’s C-Store Ranking List 7-Eleven has maintained its #1 ranking on CSP’s list of the largest convenience store chains in the country. Although CSP’s complete 2020 Top 202 will be released in June, the publication recently offered an early look at the current top 40 based on store counts as of December 31, 2019. 7-Eleven so far has 9,364 location in the U.S. CSP noted that 7-Eleven grew by about 100 sites in 2019 and began 2020 with a bang by acquiring more than 100 7-Eleven branded cstores in Oklahoma from Oklahoma City-based 7-Eleven Stores. Alimentation Couche-Tard, parent company of Circle K, comes in at #2 with 5,933 stores, and Speedway is at #3 with 3,900 locations.

Seven-Eleven Japan Ends Contract With Activist Franchisee Seven-Eleven Japan has terminated its franchise contract with a storeowner in western Japan who criticized the company over its 24/7 operation policy, reported the New York Times. The move by SEJ came after Mitoshi Matsumoto, who runs his store in Higashiosaka, closed shop so he and his two full-time employees could take off New Year’s Day, Japan’s most important holiday, continued on page 16

A 7-Eleven near the beaches of Bonita Springs, Florida has a claim to fame—it sold the winning Powerball ticket worth $396.9 million for the January 29 drawing, reported the Naples Daily News. • Amazon plans to oﬀer hot food, espresso, and fountain sodas in one of its Amazon Go stores in San Francisco, reported Benzinga.com. The store is currently closed for renovation. • Analysts forecast a total of 17.1 million new vehicles will be sold in 2020, matching last year’s tally and marking the sixth year in a row that new auto sales will top 17 million, reveals the Edmunds 2020 Automotive Industry Trends Report. • Although retail data breaches have repeatedly made headlines for exposing consumers’ credit and debit card information, cybercriminals are now increasing their attacks on retailers’ loyalty programs, reported Retail Dive. According to the Forter Fraud Attack Index report, loyalty fraud has increased by 89 percent in only one year. • ExxonMobil and Amazon recently announced a partnership that will allow voice-activated fuel purchases in vehicles with Alexa builtin as well as from Alexa-enabled smartphones and other devices, reported CNN Business. Beginning in April, consumers will be able to say, “Alexa, pay for gas” at more than 11,500 Exxon and Mobil fuel stations. • An estimated 17.5 million Americans missed work on February 3, the day after the Super Bowl, according to the Workforce Institute at Kronos. It’s the biggest day of Super Bowl-related hooky since 2005. • Walmart has raised the minimum hourly wage from $11 to $12 in about 500 of its locations as part of a test of a new team approach to staﬃng the stores, reported CNBC. The new model will give lower-level employees more training, responsibility and opportunities for advancement, the company said. • Casey’s General Stores Inc. plans to add about 350 new locations during the next three years, continued on page 16

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Judge Trims Franchisee Classification Suit A California federal judge recently shot down SEI’s summary judgment bid in a proposed class action alleging the company misclassified its franchisees as independent contractors, keeping most of the franchisees’ claims alive but killing their allegation over unpaid overtime, reported Law360. According to the article, both SEI and the franchisees had submitted dueling motions for summary judgment in the years long dispute: SEI argued it should be granted judgment on unpaid overtime and unpaid reimbursement claims, and the franchisees more broadly sought partial judgment that they'd been misclassified. On February 19, U.S. District Judge Dale S. Fischer denied the plaintiffs' motion and most of SEI's motion, noting that too many disputed legal and factual issues remained that couldn't be resolved at the summary judgment stage. Ultimately, the biggest question in the case—the franchisees' employment status—will have to be determined by a jury, she said. On the unpaid overtime claims, Judge Fischer said the franchisees haven't put forth evidence to establish that they actually worked overtime, pointing to the fact that the franchisees admitted they didn't keep records of the hours they spent in their stores and never gave

SEI any information about the “SEI argued it should be time it took to operate their granted judgment on unbusinesses. paid overtime and unpaid However, Judge Fischer de- reimbursement claims, nied SEI's summary judgment and the franchisees more bid on the franchisees' unpaid broadly sought partial expense reimbursement claims judgment that they'd and on the company's claims been misclassified.” that three of the plaintiffs released their claims when they renewed their franchise agreements in 2019. Those issues depend on the franchisees' employment status and on disputed legal and factual issues regarding the validity of the agreements, Judge Fischer said. “Plaintiffs' claims will ultimately require the finder of fact to determine whether they are employees or independent contractors,” she told Law360, adding that “there are too many outstanding disputes of material fact to resolve that question on summary judgment.” Shannon Liss-Riordan, counsel for the franchisees, told Law360 she was pleased with the decision and looks forward to moving toward trial.

Join Your Local Franchise Owner’s Association Today! The best way to stay informed of the latest changes and challenges to our 7-Eleven system—and the convenience industry, in general—is to join your local Franchise Owner’s Association. FOAs help franchisees share ideas and concerns, and allow us to approach “None of us is as great our franchisor and vendor as all of us together.” partners with a unified voice. Becoming an FOA member also makes you a member of the National Coalition, which consists of all 43 FOAs nationwide. To join your local organization, contact the FOA president closest to you, or follow the instructions below to fill out an online membership form. If you cannot find the FOA closest to you, contact nationaloffice@ncasef.com for more information. We welcome your participation!

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How do I join an FOA? 1. Log in to 7 Help using 7 Hub (secured) in-store or using this link https://7elevenna.service now.com/ from any external device. 2. In the search bar type “FOA.” 3. Select the popup suggestion “FOA/PAC: FRANCHISE OWNERS ASSOCIATION.” 4. Type “NONE” in the “Current FOA” box if you are joining an FOA for the first time or you are not a member of any other FOA. 5 Type in the full name of the FOA that you wish to join (No abbreviation) in the “Future FOA” box. 6. Type in the amount of monthly dues as instructed per local FOA. 7. Type “Please enroll (store number) as a member of (name of the local) FOA.” 8. Repeat Step 7. 9. Press the green submit icon.

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“It was the latest battle between Mr. Matsumoto and SEJ over harsh working conditions in the Japanese convenience store industry, which demands that stores stay open seven days a week, 24 hours a day, for all 365 days in a year.” after years of working 14-hour days with few breaks. It was the latest battle between Mr. Matsumoto and SEJ over harsh working There are 152,720 convenience stores conditions in the Japanese convenience operating in the United States, down less store industry, which demands that than 1 percent from last year’s 153,237 stores stay open seven days a week, 24 stores, reveals the 2020 hours a day, for all 365 days in NACS/Nielsen Convena year. Mr. Matsumoto re“e number ience Industry Store mains in business, but just of c-stores in Count. The count is based barely after the company the U.S. has on stores that were open as stopped delivering goods to his of December 2019. The store. He plans to stay open as declined slight decrease in the numlong as he can in the hope that mainly due ber of convenience stores his long-running battle with to a dip in was mainly due to a dip in SEJ will end in his favor. A the number the number of single-store spokesman for Seven & I deof single-store operators (95,108 in 2019 nied that the termination was vs. 95,445 in 2018), which tied to Mr. Matsumoto’s plan operators account for 62.1 percent of to close for a day, and instead (95,108 in all convenience stores, cited numerous customer 2019 vs. NACS said. The decline complaints about the store and 95,445 in among the smallest operaMr. Matsumoto’s disparaging 2018). ” tors is part of continued remarks about the company on social media. continued on page 19

U.S. C-Store Count Down Slightly

Remembering Don Hefner The officers and Board members of the National Coalition mourn the recent loss of friend and colleague Donald Joseph Hefner Sr. Don was a franchisee since 1974 up until 2019, operating a store in Fallston, Maryland. He also served as president of the Baltimore FOA and as an officer and Board member of the National Coalition for over a decade, helping his fellow franchisees at the local and national levels. Don was active in his community, coordinating many church fundraisers as a St. Mark’s Fallston Parish Council member. He was equally involved with the Fallston Recreation Council and the Harford County Tax Appeals Board. The National Coalition sends its sincerest condolences to Don’s wife, Myra, and his entire family. He will be forever remembered as a loving friend and champion of the 7Eleven franchisee community. 16

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reported Chain Store Age. The convenience retailer currently operates more than 2,200 stores in 16 states. • Dunkin’ plans to close 450 locations inside of Speedway convenience stores by the end of the year, saying it can better serve these markets with the company’s own standalone locations, reported Restaurant Business. • UPS announced it has ordered 10,000 purpose-built electric vehicles from UK-based Arrival. The vehicles will be rolled out in the UK, Europe and North America from 2020 to 2024. The company said it has the option to purchase another 10,000 vehicles during this period. • Amazon recently filed a patent for technology that would allow consumers to pay at Amazon Go stores by just scanning their hand, reported USA Today. The technology could identify you by scanning the wrinkles in the palm of your hand and by using a light to see beneath your skin to your blood vessels. • White Castle announced that it broke its own Valentine’s Day record with more than 30,000 diners in 14 states. The burger chain said it was the largest number of Valentine’s Day dinner guests to partake in the nearly 30-year tradition. • Sandwich chain Subway has fired about 300 people at its Milford, Conn., headquarters—the latest in a series of shakeups at the struggling company, reported the New York Post. Subway, which has been in decline since 2015, has seen traﬃc decline 30 percent over the last five years amid growing competition for fast healthy fare. • Pepsi recently adopted a new tagline, “That’s What I Like,” that will be used for all Pepsi varieties including regular Pepsi, Pepsi Zero Sugar and Diet Pepsi, reported AdAge. • Taco Bell is going to test paying managers $100,000 a year at some company-owned locations in the Northeast and Midwest starting later this year, reported Market Watch. Taco Bell also said that as of January 1, 2020, all of its company employees can become eligible to receive at least 24 hours of paid sick time per calendar year. • The Texas Lotcontinued on page 20

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7-Eleven Store Count Per Country

consolidation in the industry. The smallest companies are shrinking from the channel as they are acquired by the larger chains or struggle with profitability, NACS explained. The number of convenience stores that sell motor fuels remained steady at 121,988 stores. Overall, the industry is seeing less contraction than the grocery and drugstore channels, down 1.6 percent and 1.7 percent, respectively, while the dollar store channel continues to grow, adding 1,565 stores in 2019. Among the states, Texas continues to lead in store count at 15,856 stores, or more than one in 10 stores in the country. California is second at 11,990 stores, followed by Florida (9,811), New York (8,489), Georgia (6,668), North Carolina (6,024), Ohio (5,635), Michigan (4,917), Pennsylvania (4,754) and Illinois (4,715). The three states with the lowest store counts are Alaska (194 stores), Wyoming (352) and Delaware (344).

Japan C-Store Number Falls The number of convenience stores in Japan decreased for the first time since 2005, when comparative data started to be available, reported The Japan News, citing data from the Japan Franchise Association. The association

“e number of convenience stores in Japan decreased for the first time since 2005, when comparative data started to be available.” released preliminary figures recently showing there were 55,620 convenience stores as of the end of 2019, down 0.2 percent—or 123 stores—from the 55,743 at the end of 2018. The decline was due to sluggish sales per franchise, prompting the major convenience store operators to curb new store openings. The business model of increasing sales by opening more stores is reaching a turning point. Also, competition with other businesses such as drugstores is intensifying, causing the convenience store industry to only see a slight increase of 0.4 percent to 10.34 trillion yen in total sales on a same-store basis in 2019. Additionally, labor costs have been rising due to a shortage of workers, making it difficult for franchises to operate.

tailers. The list includes retailers and restaurants that “exemplify the spirit of innovation through technology.” Of 7Eleven, CSP stated that the company “is carefully executing a years-long strategy to update its consumer-facing technology. The long-term project began in 2017 when the chain updated its loyalty program and began testing delivery through the 7Now app in Dallas. Since then, 7Eleven has expanded delivery to markets across the United States, implemented scan-and-go checkout capability and improved its delivery offer with 7Now Pins, which allow consumers to have orders delivered just about anywhere.”

Wawa Expands In Florida Wawa has its sights set on expanding their footprint in the Jacksonville, Florida area—aiming to open at least 17 additional locations on the First Coast, reported the Jacksonville Business Journal. Brian Duke, regional real estate manager for Wawa, told the newspaper the company expects to open 60 more locations across six states—two of which are slated for Jacksonville and a third for Flagler County. Duke also added that the company will continue to open between two and three locations each year in the area. Duke added that while the goal is to have between 25 and 30 locations in the greater Jacksonville area, that doesn’t mean the company isn’t limiting themselves to that number. continued on page 20

7-Eleven Among ‘20 Tech Innovators’ 7-Eleven has been selected as one of CSP Daily News’ 20 Tech Innovators reAVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

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FDA Enforcing E-Cig Flavor Ban The FDA is enforcing the ban on flavored cartridge and pod-based e-cigarettes, which went into on February 6, NACS announced in a press release. These products must be removed from shelves and cannot be sold, with the exception of menthol and tobacco flavors. NACS said it has received reports from some retailers that undercover persons began conducting stings on February 6, telling store associates that while they can't purchase the product, another employee of the store left product in the back for them. If the product is sold or given to anyone, other than the wholesaler or manufacturer to which the product is being returned, it is a violation of the law.

NACS strongly urges all retailers to take precautions to ensure that products are removed from stores to prevent any inadvertent sales. If there is unsold stock, NACS suggests retailers follow their own operational best practices for storing, handling and disposing of unsold stock that has been adulterated/recalled/banned or otherwise not permitted for sale. In general, these products should not be in view of customers and should be packaged, sealed and secured within an area of the store or warehouse that the public cannot access until the products can be returned to the manufacturer or wholesaler.

Japan C-Stores Urged To Shorten Hours

A Japanese government panel has recommended that convenience store chains in the country shorten their business “NACS said it has hours and help franchise owners cover rising labor received reports from some retailers that costs, reported Kyodo undercover persons began conducting News. The recommendae-cig flavor stings on February 6.” tions come as some francontinued on page 56

Questions For The CEO? Got a question you want to ask the CEO of 7-Eleven? Submit it via email to nationalcoalition@NCASEF.com. Include the phrase, “Question for the CEO.” We’ll print your question here next issue. All questions are anonymous. The changing environment franchisees face over the next year is bound to raise many issues we have not faced before. We have all signed a new contract that we have yet to test in practice. So, got a question? Let us know: nationalcoaltion2@ncasef.com

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tery plans to expand a program it has been testing since early November that allows customers to purchase lottery tickets in the checkout lanes of stores, reported the Telegraph Herald. • Core-Mark international Inc. has partnered with Solari Hemp, a farm-toshelf wellness company that offers premium hemp-derived CBD, reported CSNews Online. Solari’s 100 percent THC-free line of CBD products will be distributed nationally through Core-Mark’s supply chain. • Global lighter and razor manufacturer BIC recently won its lawsuit against California-based Arrow Lighter Inc. claiming that Arrow and its international affiliates were importing and selling “knock-off” lighters, reported the Connecticut Post. Arrow has agreed to stop selling specific lighter models anywhere in the world as part of the resolution. • Pilot Flying J is changing its corporate name to the Pilot Company, reflecting its expanding petroleum business and the reality of finite growth in new truck stops in the U.S. and Canada, reported Yahoo Finance. • Amazon and Walmart have extended their pilot program with the U.S. Department of Agriculture (USDA) that allows consumers who receive SNAP benefits to purchase groceries online for home delivery, reported Chain Store Age. Both retailers launched the program in New York in April 2019, and are now testing it in Washington State. • 7Eleven Australia has helped to divert 2.7 million-plus coffee cups from the landfill, reported NACS Online. The c-store chain partnered with the Simply Cups initiative in March 2018 to serve as collection sites for disposable coffee cups, which are in turn upcycled into things like reusable drink trays, reusable cups, egg cartons, and road materials. • Borden Dairy Co. has filed for bankruptcy protection, the second major U.S. dairy company to do so in recent months, reported the Associated Press. The amount of milk consumed per capita in the U.S. has dropped more than 40 percent since 1975. Americans drank about 24 gallons a year in 1996, continued on page 35

Legislative Update National Smoking Age Raised To 21 On December 20, President Donald Trump signed a sweeping spending bill into law, including a measure that prohibits the sale of tobacco products to anyone under the age of 21 eﬀective immediately, reported CNN. e FDA said “because the change simply increased the age limit in existing law, it was able to go into eﬀect immediately.” More recently, the FDA said it acknowledges there is a transition period and would therefore only use minors under 18 in its compliance checks until further notice, reported NACS Online. e increased age restric“TRUMP’S SPENDING BILL INCLUDED tion for tobacco purchases is one of several proviA MEASURE THAT PROHIBITS THE sions outside of the SALE OF TOBACCO PRODUCTS TO spending measures themANYONE UNDER THE AGE OF 21, selves that were attached EFFECTIVE IMMEDIATELY.” to the broader $1.4 trillion spending agreement. A bipartisan mix of senators has long pushed the restriction on tobacco sales. As of December, 19 states have raised the minimum age to buy tobacco products to 21: Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Utah, Vermont, Virginia and Washington. Washington, D.C., and more than 500 cities and towns have also raised the age.

New Year Rings In With Minimum Wage Hikes Twenty states and 32 cities rang in the New Year with minimum wage increases, according to MinimumWage.com. e largest year over year increase occurred in New Mexico, where the minimum wage went up by 20 percent, from $7.25 to $9.00 an hour, on January 1. San Francisco, California set the benchmark for the highest minimum wage in the United States at $16.61. Across the “SEATTLE HAS ONE OF THE HIGHEST bay, the MINIMUM WAGES IN THE COUNTRY AS neighboring

OF JANUARY 1, AT $16.39 AN HOUR.”

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City of Emeryville 2019 2020 will be close behind MINIMUM MINIMUM when its minimum STATE WAGE WAGE wage increases to Arizona.................$11.00 ..............$12.00 16.42 on July 1, California..............$12.00 ..............$13.00 2020. Florida..................$8.46 ................$8.56 Seattle also has Illinois ..................$8.25 ................$9.25 one of the highest Maine...................$11.00 ..............$12.00 minimum wages in Maryland..............$10.10 ..............$11.00 the country as of Massachusetts ......$12.00 ..............$12.75 January 1, with the Michigan ..............$9.45 ................$9.65 lowest permissible Missouri................$8.60 ................$9.45 pay rate rising to New Jersey ...........$10.00 ..............$11.00 $16.39 an hour, reNew Mexico ..........$7.50 ................$9.00 ported CSP Daily New York ..............$11.10 ..............$11.80 News. e miniOhio$8.55.............$8.70 mums also inVermont ...............$10.78 ..............$10.96 creased in a number Washington ..........$12.00 ..............$13.50 of the California high-tech centers neighboring San Francisco, including Sunnyvale (the new wage: $16.05), San Mateo ($15.38), South San Francisco ($15) and Santa Clara ($15.40). California’s overall minimum wage jumped 8.3 percent, to $13 an hour, the second-highest next to Washington’s pay floor as of 2020 of $13.50, a 12.5 percent increase from the 2019 threshold. Following is a list of all states where 7-Eleven operates and the minimum wage increased on January 1, as published by CSP Daily News.

FDA Bans Most Flavored E-Cigs e FDA recently published final guidance banning most flavored cartridge-based e-cigarettes, except for tobacco and menthol flavors, reported NACS Online. e guidance permits the sale of e-liquid flavors used in open vaping systems and in disposable, single-use vape products. Stores were required to remove the banned products from their shelves on Febcontinued next page

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Legislative Update ruary 6. Unlike the initial proposal from the FDA, the final guidance focuses on which products can and cannot be sold rather than the locations in which those products are sold. Under the guidance policy, all e-cigarette manufacturers are required to file Premarket Tobacco Product Applications by May 12, 2020. Premarket approval applications are also required for vape shops or other retailers that mix

“All e-cigarette manufacturers are required to file Premarket Tobacco Product Applications by May 12. Manufacturers must take steps to try to prevent minors from purchasing their products.”

their own vape juice because they are, in those cases, manufacturing the product. e guidance also provides that manufacturers must take steps to try to prevent minors from purchasing their products. ese steps may include manufacturers requiring retailers to use certain age verification systems and/or manufacturers conducting stings of retailers and imposing fines on retailers for violations.

NYC Bans Cashless Stores e New York City Council recently voted to prohibit businesses from only accepting credit card, debit or digital payments, reported ABC News. ere were concerns from elected oﬃcials that such stores and eateries discriminated against continued on page 45

Dark Chocolate Peanut Butter McLane UIN 321337

Honey Sea Salt McLane UIN 321347

It’s Time To Grow FOA And National Coalition Membership BY JAY SINGH, CHAIRMAN, NCASEF, PRESIDENT, SAN ANTONIO FOA

Thirteen years ago, when I began working with the National Coalition as an FOA president, I was amazed that one convenience store company could have as many as 3,688 stores. Little did I know that number would climb to 7,808 franchised stores plus 738 corporate stores in the United States by the time I was elected to my second term as chairman of the National Coalition beginning in 2020. As 7-Eleven has grown, the National Coalition has grown with it. 7-Eleven has stated their intentions of growing to 20,000 locations in the United States by their 100th anniversary in 2027. Their most recent acquisition of 100 Oklahoma 7-Eleven stores and their interest linked to the acquisition of 4,000 Speedway convenience stores put up for sale last month shows just how serious the company’s intentions are. In 1978 Bill Schussler, then Chairman of the 7-Eleven Franchise Owner’s Association, which eventually became the NCASEF, uttered the words, “None of us is as great as all of us together.” It probably wasn’t the first time franchise owners talked about the benefits of unity and working together. Schussler’s words still ring true for franchisees today. There’s no question that more franchisee involvement in local Franchise Owner’s Associations means more influence with the company, more buying power with national and regional vendors, and more influence in our local communities where we can help schools and hospitals, fire and police departments, and participate in charity and community events. Recently, 7-Eleven made an announcement to the trade press that the company has surpassed 70,000 locations worldwide in 17 countries. When they build their first store in India later this year, it will be 18 countries. The company has also publicized the fact that

globally last year, 7-Eleven opened a store every 3.5 hours. In the U.S., with the acquisition and ongoing conversion of 1,030 Sunoco stores to the 7-Eleven brand, franchised stores now account for 7,808 stores in 31 states, and there are still some 400 Sunoco stores yet to be converted. 7-Eleven also builds several hundred stores in a typical year. It is the goal of the National Coalition to sign up every franchisee in the country to an FOA membership, and membership in the National Coalition. This is not an easy task, since most storeowners are self-made entrepreneurs, and are used to doing things independently.

All the more reason we must encourage our fellow franchisees to join our local FOAs, participate in their events, and in the process, join the National Coalition. On a local level, most FOAs have a variety of activities, including but not limited to monthly board and/or membership meetings, holiday parties, golf tournaments and other charity events, a trade show, and vendor appreciation days. Many FOAs have other group social events like sporting events, picnics and group dinners. Almost all FOAs donate

“Most FOAs have a variety of activities, including but not limited to monthly board and/or membership meetings, holiday parties, golf tournaments and other charity events, a trade show, and vendor appreciation days. “ to local charities or support local hospitals and other groups doing good work. All in all, the FOA experience can be very social with fellow franchisees, as well as one of your most important sources of support, information, and networking within our 7-Eleven businesses. Many FOAs support franchisees who are struggling with advice on how to run their businesses, and in some cases, Board members and individual franchisees will pitch in and take five people to a store that needs cleaning and organization. If you need a lawyer, most FOAs have a relationship with at least one franchise attorney or can refer you to several. If you get an LON or breach, the FOA leaders can help guide you, and whatever questions you have can be addressed from the franchisee point of view by speaking with fellow FOA members. You can join your local FOA electronically through 7 Help using 7 Hub. On page 14 of this issue of Avanti you can see the complete instructions for FOA membership. To find the FOA closest to you, check out the Membership tab on the Coalition website, www.NCASEF .com, or call the National Coalition office at 210-971-9211. continued on page 27

“Many FOAs have other group social events like sporting events, picnics and group dinners. Almost all FOAs donate to local charities or support local hospitals and other groups doing good work.” AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

“There are a lot of benefits to becoming an FOA and a National Coalition member, including greater understanding of the company and the c-store business, greater involvement with vendors, and the ability to ask questions and get feedback from a community of individuals with common interests.” continued from page 25

Now is the time to increase FOA and National Coalition membership. Besides the new Sunoco stores, we have some areas around the country underrepresented by local FOAs. The National Coalition now has 42 FOA members, with large concentrations of franchisees on the East coast, West coast and the area from Chicago to Dallas. Once you become a member of your local FOA, you will automatically become a member of the National Coalition. It is the Coalition’s job to represent franchisee interests to Dallas and among

national vendors, and to provide a forum for the exchange of information about systemic issues. If you have legal questions, the National Coalition has two lawyers that can answer them generally, but not state by state. To fulfill it’s mission the National Coalition sponsors four full Board meetings per year, a convention and trade show, a Vendor Affiliate Program, a magazine, a website, and Linkedin, Facebook, and Twitter accounts. We have legislative interests and support various bills affecting our industry and our businesses. We also donate to national charities every year, and each year we choose a worthy one. For the last four years our charity has been Swim Across America, sponsors of swimming events to raise money for cancer research. For four meetings per year, the NCASEF invites two members from each FOA, a president and a vice president, to sit on the National Coalition Board of Directors. All franchisees nationally are also invited to observe at National Coalition meetings, which encompass new as well as old business. The National Coalition has six elected officers who conduct the business

of the organization and lead the meetings. The officers work at the behest of the Board, which votes on all major issues and any and all motions brought by the Coalition’s 84 Board members. There are a lot of benefits to becoming an FOA and a National Coalition member, including greater understanding of the company and the c-store business, greater involvement with vendors, and the ability to ask questions and get feedback from a community of individuals with common interests. The 7-Eleven, Inc. of today is not the same corporation that operated Southland Corporation in the heydays of 7-Eleven franchising by the Thompson brothers in the 1970s and 1980s. The system is so large it is better to be connected in a community of people, rather than being on your own. If you know franchisees who are not in an FOA currently, please build our participation by asking them to join us. If you are not currently in an FOA, get over to 7 Hub and sign up.

JAY SINGH CAN BE REACHED AT 702-249-3301 OR JAYS@NCASEF.COM

Sign up today to receive Dispatch, the NCASEF’s email newsletter that keeps you up to date on the latest 7-Eleven news and announcements from national leadership. With all the changes and challenges happening within our system, the Dispatch newsletter serves as a direct line of communication between the National Coalition and the franchisee community. Receive urgent information, alerts, and reports directly from national leadership as it happens.

Head over to www.NCASEF.com and click on the Subscribe to Our Newsletter button on the upper right column of the homepage. Then fill out the form to be placed on the Dispatch email list. AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

Serve, Lead, Do What’s Right. Controlling vs. Motivating BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF

“It’s called servant leadership. Serve, lead, do what’s right. Invert the pyramid— put the customer first, followed by strategy. Then take all your infrastructure and put it to use to meet customers’ needs.” Ten years ago, on May 13, 2010, 7-Eleven CEO Joe DePinto made these remarks to a crowd of faculty, students and friends at the Owen L. Coon Forum, at the Kellogg School of Management, Northwestern University. He was describing how he demonstrated the concept of servant leadership during his appearance on “Undercover Boss,” a CBS reality series that follows highlevel chief executives as they work anonymously within their companies. The show is still on. He played clips from the show during his speech to illustrate 7-Eleven’s customer-focused business philosophy. “We’re here to make people’s lives a little easier,” he said in the clips, which showed him being trained to sell coffee, one of the company’s most popular items. “We’re here to serve people. That’s what 7-Eleven is about as a company—serving people.” But the way the company serves people is changing, DePinto said. The entrance of the millennial generation into the market, as well as other factors have changed buying patterns. To find out how to meet consumers’ changing needs, 7-Eleven asked customers what they wanted. Quality, service, value, cleanliness and assortment were the five things consumers rated highest. The company then evaluated how it was performing in those five areas. We were focused on the customer. Fast forward to today. After the launch of the WIN coffee program in New York, additional areas of the country are receiving the program, hoping to evolve with the next generation of 7-Eleven’s coffee program. Orlando is among those areas. I have heard from a number of franchisees in this next

“I have heard from a number of franchisees that we need to meet certain criteria before installation of the new coffee equipment can take place.”

wave that we need to meet a certain criteria before installation of the equipment can take place. The checklist process begins with field consultants conducting a specially designed WIN coffee readiness survey and a detailed long-walk store inspection, followed by a visit from the WIN Coffee readiness team. The WIN coffee readiness team surveys the entire store and is requiring franchisees to detail everything—from building pressure wash and gum removal, to mulching and tree trimming. This is followed by several additional progress visits. On the other hand I am told that old gas pumps, cracked lots, cracked floor tiles and other issues, which fall on SEI’s side of repair and maintenance, are overlooked.

Bottom line, the team is telling franchisees that if they do not satisfy the items on these checklists that their participation in the WIN coffee program, the installation of the equipment, will be in jeopardy.

I want to be clear here that there are contractual obligations and requirements on behalf of both parties to the agreement. The question is not whether 7-Eleven has the right to demand these items be addressed; it is the manner and direct relationship to the WIN coffee program install that is the concern. If you want to understand why there are issues within our system, such as poor franchisee morale and broken trust, one doesn’t need to look much further. For me, both the WIN coffee program and the $1 coffee program started more than two years ago at the March 2018 NBLC Meeting, when slides were shared (the deck was also posted on the NBLC section of 7-Hub) that highlighted our customers were not happy paying our prices for coffee. Our prices were too high. These slides also indicated that our customer’s needs were changing, and that they were now seeking different, more specialized coffee products and experiences such as espresso based drinks, as well as coffee made fresh via bean-to-cup machines and cold brew. They also show that this wasn’t an overnight evolution of the customer, it had been happening over a long period of continued on page 30

“There has been a lot of discussion among franchisees about the lack of funding, duration of the promotion, inability to opt out, issues upon opting out, and 7-Eleven setting our pricing.” AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

Controlling vs. Motivating... time. Then they unveiled the new coffee platform and beverage wall that they were testing in Texas. Franchisees have been participating in $1 coffee through 7-Rewards since July of 2019, first through all 7-Rewards members, and more recently the program is being offered to only registered members. There has been a lot of discussion among franchisees about the lack of funding, du-

“Instead of motivating franchisees to move the needle in the areas pointed out on the Walk and Readiness forms, SEI is using a control approach.” ration of the promotion, inability to opt out, issues upon opting out, and 7-Eleven setting our pricing. When this promotion started back in July, we were presented with a slide that indicated, “Coffee consumption is growing everywhere but 7Eleven (10 year decline),” and “Consumers are thinking of 7-Eleven less and less when considering coffee options.” There was information provided at this year’s SEE, which SEI used to form the business plan for hot beverages. In a survey, 755 people responded to the question “What should 7-Eleven improve in order to motivate you to buy their coffee more often?” Only 6 percent (45) of respondents mentioned lowering prices and an additional 5 percent (38) referred to rewards points. The only piece missing is the timing of the survey. This $1 coffee promo certainly helped draw more customers into the 7-Rewards program and is now motivating them to register. We are still beginning to understand the value of 7Rewards to our business, something that will take us some time. The easy part to understand is the value that comes in the form of customer 30

continued from page 29

loyalty, return trips and happy customers. Franchisees continue to invest in customer acquisition with 7-Rewards and will hopefully share in all of the future revenues it generates. Do I believe the $1 coffee program was the right decision for our business? I believe it was for my particular stores, but this will certainly vary by area and individual store circumstance. I also believe 7Eleven should make the franchisees whole financially and accelerate the installation of the WIN coffee program so all franchisees can again realize positive unit growth along with retail growth, transaction count growth, and everything that comes along with it. Given the current atmosphere, and 7Eleven’s history with franchisees, is it really the proper approach to be holding the WIN coffee program and equipment installation hostage over franchisees until they complete a checklist? Wasn’t this program already long overdue? Is this the definition of “Doing What’s Right?” What about our customers? Sure, they are getting their coffee for $1, but only after they do what we want (register with the 7Rewards program), and many customers are still not getting what they want in the majority of our stores still waiting for the WIN coffee installs. In his article “The Secret to Controlling Other People” published in Psychology Today, Timothy Carey, Ph.D. notes that “When you know an important goal that someone else has, if you can arrange situations so that they only achieve their goal by behaving in certain ways, then you can control their behavior for as long as they continue to pursue that goal.” Regarding the WIN coffee program, most franchisees have a goal of acquiring the new equipment to get them to the current coffee standard in the c-store industry. In this example, 7-Eleven should, and I can argue does, want to achieve the same goal. However, instead of motivating franchisees to move the needle in the areas pointed out on the Walk and Readiness forms, they are

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using a control approach. Again, there are contractual obligations, but what happens when there are not? If you are being controlled it is important to be aware of what is being used to control you. A few examples of goals franchisees have that are used to control them are scrape and rebuild, relocation of existing store, approval for another store, contract renewal, appointments to NBLC or similar committees, etc. It is important to know that 7-Eleven also has goals, many of which are not contractual obligations, which you as a franchisee can use to control them. For example, new item take rate, pre-books, focus items, focus days, custom retail pricing, etc. In his article Dr. Carey advises, “Whenever you’re feeling as though another person is controlling you in some way—instead of asking them to change what they are doing (which could also be useful), it may be helpful to check your own goals. It may not be easy, but changing your own goals will also change the dynamics of the relationship with the other person.” He concludes, “It’s a fact that, because of the way we are designed, other people can control our behavior. It’s also a fact, though, that they only control our behavior by manipulating the extent to which we are able to achieve goals that are important to us.” Is this what we have come to? Is this the Servant Leadership organization that we strove to be back in 2010? In a perfect world 7-Eleven and franchisees would work together to have an alignment of goals, so that when everyone works together, everyone wins together. But this only happens when there is transparency and each party can be held accountable to the other. This is what franchisees want, and what franchisees need, but today accountability is all one-sided. It’s a failure of management.

MICHAEL JORGENSEN CAN BE REACHED AT

JORGENSEN.NCASEF@GMAIL.COM OR 347-251-1828

AVANTI J A N U A R Y | F E B R U A R Y 2 0 1 9

As Seven Eleven Japan Goes…? ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

There’s a famous saying in American politics: “As Maine goes, so goes the nation.” This phrase originated from the fact that, between 1820 and 1958, Maine held its statewide and congressional elections in September rather than in November, in part because of frigid weather. It thus became a bellwether state whose choices, generally for members of the Republican Party, more often than not reflected the outcome of presidential contests. One of my roles as General Counsel to the National Coalition is to closely monitor publicly available information about SEI derived from securities filings by its Japanese-held parent, Seven & i Holdings Co., Ltd., available for all the world to see on its website. These filings provide a wealth of information not available elsewhere and also hint about the future direction of the company in general, and SEI operations in the United States in particular. I encourage you visit that website at https://www.7andi.com/en/ir.html. One of those areas relates to the evolving product mix in the stores. Based on figures for the nine months ended November 30, 2019, Seven-Eleven Japan (SEJ) stores derived 30.6 percent of sales from fast food and 13.1 percent from daily food. By contrast, SEI stores in the United States derived just 14.9 percent of sales from fast food and 4.9 percent from daily food. This means that the fast food and daily food categories in the Japanese stores represent 2.2 times as much rev-

ERIC H. KARP CAN BE REACHED AT 617-423-7250 or ekarp@wkwrlaw.com

enue of United States stores. “SEJ stores had an overall gross profit margin of SEJ discloses that stores in Japan derive a 32.1 percent as of November 30, 2019, compared gross profit margin of to 35.0 percent for SEI stores. That nearly 3 35.9 percent for fast food and 33.4 percent percent differential is substantial and translates for daily food. SEI does into millions of dollars of gross profit.” not disclose gross profit margin by product category. Of course, lates into millions of dollars of gross with higher labor required to prepare, profit. Given the materially different prodprocess and sell fast food and daily food, these higher gross profit margins are not uct mix and gross profit margins between an indication of the overall profitability of stores in Japan and the United States, one that market segment. As a reminder, dur- might plausibly ask whether the profile of ing the protracted but ultimately unsuc- and trends in the Japanese stores portend cessful attempt to negotiate a fair and the future for SEI franchisees. A broad hint may be derived from balanced franchise agreement with SEI, the Financial Results Presentation issued by Seven & i on January 9, 2020. It in“Fast food and daily cludes a slide regarding a trial Grab and Go fresh food initiative in the Dallas area food categories in the with Warabeya. That slide reports that Japanese stores year-over-year sales for October 2019 inrepresent 2.2 times as creased by 21.5 percent for Hot much revenue as in Food, 29 United States stores.” percent for Fresh Meals and 7.7 perthe company was repeatedly asked to cent for Fresh share data regarding the overall, botSandwiches. tom line profitability of fast food and daily food. SEI claimed that it did not possess This compared favorably with growth in such information. Many franchisees ques- these categories generally in the United tion how that could be true given the deep States. The slide indicates that the company intends to expand these initiatives investment in those product categories. Interestingly, SEJ stores had an over- in the next reporting period. Another slide in the same presentaall gross profit margin of 32.1 percent as of November 30, 2019, compared to 35.0 tion regarding the 7Rewards Program repercent for SEI stores. That nearly 3 per- ports substantial increases in active continued on page 34 cent differential is substantial and transAVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

As Seven Eleven Japan Goesâ&#x20AC;Ś? continued from page 33

members, scan ratios, transactions, sales, and store visits. Examples of memberonly offers include any size coffee for $1 (20 million units sold during the calendar quarter) and two 28-ounce Gatorade Zero bottles for $2.50 (2.7 million transactions). Franchisees are justifiably questioning the wisdom of deep discounting, which undermines the general provision in the franchise agreement giving franchisees the right to set retail prices, and raises serious concerns about unit level bottom line profitability. SEJ reports even deeper discounted sales promotions derived from the app sales promotions that include: buy 5 cups of coffee and get the 6th free (71 coupons issued per store in the month of November 2019), buy 10 rice balls, get the 11th free (26 coupons per store), and buy 5

Seven Premium teas and get the 6th free. These promotions generated 3.0 million transactions in a single month. But the abiding question is how they affect the bottom line of Japanese franchisees. In a related trend, SEI has publicly stated its goal to substantially increase the number of stores around the world. On January 17, 2020, Seven & i announced the acquisition of 109 stores in Oklahoma

â&#x20AC;&#x153;While hot food and fresh food seem to have higher gross profit margins, their overall profitability remains in serious doubt.â&#x20AC;?

independently operated by Brown Thompson General Partnership and 7Eleven, LLC. That same month, Joe DePinto celebrated in a press release the fact that the company had passed the 70,000 stores in the world threshold. He also announced that 7-Eleven now operates in 17 countries and this year will expand by opening stores in India for the first time. He went on to say that the company opens a store approximately every 3.5 hours. In Japan, the company has nearly 21,000 stores and a market share of somewhere between 35 percent and 40 percent. These trends raise important questions. While hot food and fresh food seem to have higher gross profit margins, their overall profitability remains in serious doubt. But given the expanded presence of continued next page

continued from page 20

and that dropped to 17 gallons in 2018. • Walmart opened a cashierless Neighborhood Market store in Coral Way, Florida, featuring online grocery pickup, same-day delivery and its Check Out With Me program, reported Grocery Dive. • Wegmans Food Markets phased out single-use plastic bags from its 47 New York stores on January 27, more than a month ahead of a state ban, reported Supermarket News. The retailer said it is now charging a 5-cent fee for paper bags, and the amount collected from the charge will be donated to the local food bank serving each region. • E-cigarette maker NJOY Holdings Inc. has decided to voluntarily halt sales of its fruit-flavored products, as lawmakers continued on page 40

“I encourage you visit the Seven & i Holdings Co., Ltd. website that shows the securities filings of SEI’s Japanese-held parent: https://www.7andi.com/en/ir.html.” continued from previous page

private label goods, will the gross margin of U.S. franchisees drift downward towards that currently being reported by Japanese franchisees? And while deep discounting in general and in particular through the apps may drive traffic, transaction counts and sales, once again, the most important question is whether franchisees can make a living from operating a franchise store. And will the drive for increasing market share, given a big boost by the 2018 acqui-

sition of approximately 1,100 Sunoco stores, give SEI even more leverage to force deep discounting and changes in product mix on United States franchisees? And will any consequence from the fact that SEI shares any further decline in gross margin be offset by a steady increase in the number of stores in the system? These developments make it more important than ever that the National Coalition stands united in its goal to protect its franchisee constituents.

Legal Guest Column

THE PLAYING FIELD MUST BE LEVELED By Arnold Hauptman, General Counsel, UFOLI New York Undoubtedly, except for a few colossal volume stores, this is the most challenging time I have ever witnessed for franchisees to both make a profit or to sell their stores for goodwill value. I make this statement based upon more than forty years of legal representation of both individual franchisees and 7Eleven franchisee associations—local and national. The present conditions are dire for both the old-timers as well as for the newer members of the 7-Eleven franchisee community. As to the many owners of 30, 40, or even longer years of tenure, their dreams of working hard towards a decent and well-earned retirement has mostly evaporated. They are often unable to sell their stores at any price because the stores are unprofitable or barely profitable, and no experienced franchisee would invest money for a franchise fee and goodwill premium for a losing proposition. If a purchaser is found, the price being paid is far below what was expected ten or fifteen years ago, because operating 7-Eleven stores are now an uphill battle, even for multiple owners, and simply not worth the time, effort and money to try to resurrect an underperforming store or stores. The result is a plethora of stores for sale with no takers.

It breaks my heart to listen to the woes of members at UFOLINY meetings, the FOA I represent as counsel. They are, for the most part, not making a decent living and are stuck in a business with no light at the end of the tunnel. Some are working at separate jobs to pay personal expenses. This is not the secure and profitable future that was promised. I have represented “The present conditions are dire for franchisees who were losing both the old-timers as well as for money to the point where it was the newer members of the 7-Eleven no longer feasible to stay in business. These franchisees simply franchisee community.” walked away or sold their store It appears from my observations for a pittance just to that there are more corporate-operated stop the flow of fi- stores than ever before. These are stores, nancial blood. I believe, that were either returned to Of course, SEI by franchisees who could not make much of the prob- a go of it or newly built stores that SEI lem must be attrib- could not franchise. uted to the periodic Recently, I have represented new store agreements, franchisees that have franchised corpowith each successive rate stores, some of which should have one being more fa- been shut down because there is no way vorable to SEI and they could be profitable. Of course, franless desirable to the chising a corporate store without paying franchisee. The 2019 a goodwill price, and with the franchise agreement is no ex- fee frequently being partially financed, ception, with 7-Eleven charges skyrocket- seems to be a good deal. All too often, ing at a time when they should be reduced however, it is not the pot of gold that it to make stores earn a bottom-line profit. appeared to be, with the stores quickly Given the ever-increasing operating going under minimum equity and with expenses, in my view, it is time for SEI breach letters being served demanding to revisit the entire franchisee store more money that is simply not available. agreement terms because if it doesn't, There was a test program that SEI the 7-Eleven franchise system may dis- put in place wherein franchise fees appear as have other franchise systems would be reduced by one third provided that failed to develop a happy, successful that a fully signed goodwill contract be and profitable franchisee community. continued on page 40

“It is time for SEI to revisit the entire franchisee store agreement, because if it doesn't, the 7-Eleven franchise system may disappear.”

ARNOLD HAUPTMAN CAN BE REACHED AT AJHAUPTMAN@AOL.COM OR (516) 541-7200

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Franchisee Guest Column

DON’T WORRY, BE HAPPY! By Serge Haitayan, President, Sierra FOA, President, Sierra FOA

Why the long face, fellow franchisee? Why are you feeling down and negative about our glorious 7-Eleven system? We are being treated so well, after all. Life is rosy! We couldn’t ask for a better franchise system! Don’t you realize that our 7-Eleven system is so friendly to use? It allows us to order anything we want, anytime we want. It only takes an hour to enter a new SI item, and it’s never deleted from our ISP. Undoubtedly, one of our biggest perks is that we get the lowest cost of goods in the country among all the c-store chains! Our franchisor’s dealing with vendors is very transparent, and our cost of goods is very well separated from the advertising funds or any kind of hidden kickbacks (SEE). You should praise our franchisor for our private brands, which are always in stock and of high quality compared to the national brands, which are always failing to deliver their products. Also, we are never monitored by corporate via their camera system like other

So what’s with all this negativity? After all, we can all close on Christmas Day so we and our employees can enjoy a peaceful and quiet day away from the store. I heard other chains charge anything they want at any time without franchisee permission and without any consideration to the impact on franchisee financials. Come on now, our franchisor never does that! And if they do by mistake, it is quickly removed. Nor will SEI turn in all franchise stores’ payroll records to Homeland Security to avoid an aggressive investigation into their practices. Servant leadership ethics prevents our franchisor from stooping that low. Yes, they may have asked more from us, but they have added more support staff at HQ to help. Our item information is consistently updated to ensure we are always able to make the most informed decisions regarding how to adjust pricing to maintain optimum profitability. Accounting has added additional staff, in-

“Japan, Australia and SEI have only ONE thing in common, and that’s Seven & i leadership.” chains, and our franchisor respects our elected leaders and does not interfere in our affairs or elections. They even hired an ex-chairman of the National Coalition to make sure everything goes smoothly in the system, unlike other chains that hire ex-chairmen to campaign and get involved in their franchisees’ elections.

cluding a quality control inspector. They have even added additional staff in the Asset Protection department, and are once again resuming asset protection seminars across the Zones to educate franchisees on how to use the systems and tools to protect their people and profits. Oh, and if you ever call any of the

“The leadership of this company both in Dallas and Japan has failed the franchise community. The days when franchisor, franchisees and vendors needed to be profitable at the same pace are gone.” help desks—which they take so much pride in—they even tell you that the call may be recorded and ask if you will stay on the line for a short survey after spending around 60 minutes to get a response. After all, we are the customer! Least I forget to mention, SEI has spared no expense nor left any stone unturned to simplify store operations for us and our associates, not because they see an immediate return on their investment, but because they believe this is what is right and necessary to ensure the future health and success of OUR business. Our franchisor really cares about its franchisees because they remodel our stores on time as promised, and our equipment is always upgraded after depreciation. We also have the best fresh stores around, not like other chains with old dirty signs and floors tiles that look like worn out checker boards. Our stores are kept properly heated and cooled, according to each store layout and location. At other chains, I hear, stores have to put fans all over to keep it cool and fresh. I mean, the list goes on and on! continued on page 40

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Franchisee Guest Column continued from page 39

Still feeling low about 7-Eleven? Just remember that SEI is fair and gives new stores to whoever is qualified, not just to the well-connected and privileged franchisees. After all, we have a contract that clearly defines every detail of our operation, not like other chains where an operation manual can be changed at any time without any input or notice. Even the 7-Eleven franchisees in Australia and Japan are happy and doing well, with no scandals, no government inquiries, and no lawsuits. I really do not understand those of you on the NCASEF Board who are always negative. After all, we get to go to Las Vegas every year to attend our franchisor’s convention/trade show for three days and dance to the tunes of a major In-

dian musician and listen to our very successful and caring CEO’s speeches, a person who practices servant leadership to the tee. You are all ingrates and negative people, and should be ashamed of yourselves! Enough said. If by now you did not see the sarcasm in my article, I would say the following: Japan, Australia and SEI only have ONE thing in common, and that’s Seven & i leadership. The leadership of this company both in Dallas and Japan has failed the franchise community. The days when franchisor, franchisees and vendors needed to be profitable at the same pace are gone—corporate greed has taken over and we the franchisees have paid the heavy price. It is time for bold changes in our unsustainable system that is crashing fast.

Legal Guest Column continued from page 37

submitted to the Franchise Sales Representative. That was a good start, but the period within which to sell a store was too short. There are just too many stores on the market for a purchaser to be found quickly. It remains to be seen whether this program will be enough of an incentive to jump-start goodwill sales at a reasonable price. There is always a downside to these programs. In this case, lower franchise fees will result in lower long-term tenure payments for those franchisees in the system since 1991. I find it impossible to believe that SEI does not hear the cries and pains of its franchisees, who are the lifeblood of its business. Management must know that the newest 2019 agreement particularly has swung the pendulum too far 40

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in favor of SEI and that immediate action is required to level the playing field before it is too late for franchisor and franchisee alike. Let's hope for better times.

“The 2019 agreement has swung the pendulum too far in favor of SEI, and immediate action is required to level the playing field before it is too late.”

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and antivaping advocates raise concerns that young people might migrate to the devices, reported the Wall Street Journal. • Wawa held a grand opening event on January 10 for its new concept store in Philadelphia featuring a walk-up window, reported the Philadelphia Inquirer. Customers can place an order through the Wawa app and schedule a time to pick it up at the walk-up window, without ever entering the store. The prototype store is also the smallest Wawa in Philly and the second smallest in the chain. • Kitchens are popping up in empty mall spaces to fill food-delivery orders, a new approach in the fast-growing business of delivering meals to customers, reported the Wall Street Journal. The move to cook food for delivery in former retail space melds two industries that have been upended by e-commerce: restaurants and malls. • Dollar General recently announced the availability of approximately 20 CBD product SKUs in approximately 1,100 stores in Tennessee and Kentucky. The company said it plans to expand the products’ availability to seven more states (Colorado, Florida, Indiana, Oregon, South Carolina, Texas and Vermont) by spring 2020. • California’s Department of Motor Vehicles recently started approving permits for self-driving delivery vehicles, reported Jalopnik.com. These permits allow for testing and commercial use, and there are separate permits for vehicles with and without backup drivers. • 7-Eleven Canada has debuted a new pizza recipe that combines authentic Italian cuisine with Canadian ingredients, reported CSP Daily News. The dough is made with Canadian wheat and sourdough bread from Puglia, Italy. Toppings include slow-dry cured pepperoni from Montreal, provolone and Parmesan cheeses from Ontario and mozzarella cheese from British Columbia. • Visa Inc. is planning the biggest changes in a decade to the rates U.S. merchants pay to accept its cards, reported Bloomberg. The company’s interchange rates will go up or down depending on the merchant and the way continued on page 57

Why The Franchise System Is Broken (And How To Fix It) The franchise system places franchisees between a rock and a hard place when it comes to legal and financial responsibilities – but new research has found that there is a simple fix for the problem. This article originally appeared on the website Business Think. Franchising is a significant sector of Australian business, contributing around 9 per cent of gross domestic product – equivalent to $170 billion a year – and employing more than 470,000 people. Despite its success and growth, the “Despite its franchise sector continues to suffer success and from an ongoing power imbalance between franchisors and frangrowth, the franchise sector chisees. Jenny Buchan, a professor in the continues to school of taxation and business law suffer from an at UNSW Business School, deongoing power scribes the sector as “feudal” in the imbalance way that it operates. In particular, Buchan calls out the between franrelationship between the franchisor chisors and and franchisee as one that still, after franchisees.” 17 enquiries in Australia across three decades, resists fundamental reform. The current franchise model, she says, embeds institutional rules developed over time that no longer reflect the reality of a mature franchise market, but which remain nonetheless. Franchisees, for example, have no input in overall strategy and can find themselves on the wrong side of change. This occurred in Australia in 2016, when franchised Sizzler restaurants were reduced to non-core businesses and deprived of growth capital by parent company Collins Foods, which decided to focus on its KFC outlets. 42

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The power imbalance can also surface in cases of franchisor insolvency. With her colleague Jennifer L. L. Grant, a post-doctoral research fellow at University College Cork in Ireland, Buchan recently published Moral Hazard, Path Dependency and Failing Franchisors: Mitigating Franchisee Risk Through Participation, which looks specifically at this issue and proposes solutions drawn from alternative legislative models for collective redundancies in the US, the UK and Australia.

An Unfair Deal? While, in the event of franchisor failure employees still enjoy protection, franchisees across these jurisdictions have few rights or legal recourse and can – in some circumstances – find themselves responsible for costs that can culminate in their financial ruin. This can happen even if their own franchisee businesses are viable. “The system allows franchisees to make very significant investments in their business, and yet provides them with no support in the event of franchisor failure,” says Buchan. “A fundamental problem, “And the response, as it says Buchan, is that the is now, is to say that franfranchisor/franchisee chisees didn’t do their due relationship is dealt with diligence, even though the under competition and pre-contract information consumer legislation and they receive from franchisors is tightly managed not under the Corporations and often doesn’t give a true Act, which she thinks picture.”

would be more appropriate.”

FRANCHISING “Franchisees, for example, have no input in overall strategy and can find themselves on the wrong side of change.” A fundamental problem, says Buchan, is that the franchisor/franchisee relationship is dealt with under competition and consumer legislation and not under the Corporations Act, which she thinks would be more appropriate. “We have a sophisticated set of obligations and rights for shareholders and employees under corporations law,” she says. “Franchisees in effect replace these people in the relationship with franchisors, but we don’t have a set of rights to mirror this, so this means that franchisors are on a free ride once they get the franchisees to sign on the dotted line.” While there are rights for the franchisor, under the existing Franchising Code, if franchisees fail there are no reciprocal rights. In the event of franchisor failure, administrators and liquidators have to act in the interests of the franchisor’s creditors while franchisees are excluded from the process and have no seat at the table. The franchisor’s employees, in this event, are recognised as priority creditors. Administrators may negotiate restructuring agreements of the franchisor’s business without any consultation with franchisees, while franchisees who are considered to be underperforming can have their businesses taken over. If the process moves from administration to liquidation, the liquidator has even more power.

Between A Rock And A Hard Place A worst-case scenario can occur if the franchisee is operating successfully and the franchisor company fails. “The administrator will be coming after you because, as a successful operator, you are a source of income and royalty stream for the administrator to pay the franchisor’s creditors,” says Buchan. “Unless you as franchisee have negotiated an exit right, you have no exit right until your contract “While there are is disclaimed as onerous, and that is unlikely to occur quickly because your busirights for the franchisor, under ness provides a lucrative income stream.” For franchisees who sublease the existing premises from the franchisor as the head Franchising lessee, the situation can be even bleaker. Code, if franIf the franchisor has the head lease and the company then fails, it is possible chisees fail there are no reciprocal that rent and outgoings will have gone unpaid to the landlord even if the franchisee

rights.”

has been diligently paying them to the franchisor each month. “In that case, you might find you have signed a rental guarantee and that means you can lose your shop and your investment,” Buchan says. “You may find that the rent you have been paying to the franchisor, expecting them to pay the landlord, has been used to pay other creditors.”

The Simple Fix For Franchise Arrangements If the reverse situation occurs, and the franchisee's business fails, the Franchising Code allows the franchisor to terminate the agreement if the franchisee is bankrupt or goes into administration.

“If the reverse situation occurs, and the franchisee's business fails, the Franchising Code allows the franchisor to terminate the agreement if the franchisee is bankrupt or goes into administration.” The recently enacted laws making ipso facto clauses in most contracts unenforceable do not exempt franchise agreements, but are yet to be tested in court. “In reality, the franchisor has the opportunity to terminate the franchisee before any administrator is called,” says Buchan. “The franchisor sees all of the franchisee’s books and knows how badly the franchisee is trading. In many systems every time the franchisee’s till rings there is information sent through to the franchisor’s head office.” Buchan believes that the “simple fix” to the imbalance in legislative rights would be to bring franchise arrangements under the Corporations Act in Australia, and in that process define the rights and responsibilities of both parties. The alternative is standalone legislation. But, most countries in the world that do have standalone franchise laws largely address issues around pre-contract disclosure and registration of aspects of the franchisor’s offering. They are limited in terms of protection for franchisees once the ink is dry on the franchise agreement. “The imbalance of power began when we deviated from the Corporations Act model, and so franchisees came to be looked upon as consumers rather than investors,” says Buchan. “I believe it is an egregious situation, which should be urgently addressed.” AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

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Legislative Update poorer customers who don't have access to bank accounts, according to city councilman Ritchie Torres, who draed the bill. e bill, which will take eﬀect 90 days aer it is signed, makes it illegal for any store to refuse a cash payment from a customer, but there are a few exceptions. Stores can refuse to take denominations larger than $20, and they would be exempt from the ban if they have a machine on site that can load cash onto a prepaid card. Online and phone purchases would also be exempt from the law, which fines first time violators $1,000. Last year Philadelphia, San Francisco and New Jersey passed laws that banned cashless establishments. Massachusetts passed a similar law in 1978.

Massachusetts Ballot Question Would Let C-Stores Sell Beer A proposed measure to allow convenience stores and other food stores to sell beer and wine in Massachusetts will be on the state’s November ballot, reported NBC10 Boston. If passed, the new law would let local authorities issue licenses allowing food stores to sell wine and malt beverages to be consumed oﬀ the premises. Local licensing authorities would have the discretion to determine the number of food store licenses they issue. e new licenses would be in addition to existing licenses issued for the sale of alcoholic beverages, and could be issued as soon as December if the question is approved by voters in November. Supporters of the ballot question say it would require the state Alcoholic Beverages Control Commission to hire at least one investigator for every 250 licenses granted under the proposed law. e new measure would pay for additional costs to the commission by creating a fund consisting of alcohol excise taxes, fines and fees collected by the commission. e ballot question is being opposed by liquor store owners, who could experience greater competition if it is approved. ey are asking the state's highest court to overturn Attorney General Maura Healey's decision to allow the question to head to the ballot. A decision is expected this summer.

Baltimore Bans Plastic Bags At Checkout Baltimore Mayor Bernard C. Young recently signed a bill that bans retailers’ use of “A Baltimore plastic bags starting in 2021, reported the Balbill bans timore Sun. e law will prohibit grocers and plastic bags other retailers from giving out plastic bags, starting in and require them to charge a nickel for any 2021, fines other bag they supply to shoppers, including violators paper bags. Retailers would keep 4 cents from $1,000.” the fee for each alternative bag they supply, with a penny going to city coﬀers. e new law will apply to grocery stores, convenience stores, pharmacies, restaurants and gas stations. ose found to violate the ban three times or more would face a fine of up to $1,000. Environmental advocates, who championed the bill, call it an important step toward reducing plastic pollution. e mayor pledged to fight for a statewide ban in the General Assembly.

Illinois Bill To Ban Self-Serve Gas Pumping Illinois drivers would not be allowed to pump their own gas if a new bill in Springfield becomes law, reported IllinoisPolicy.org. Under House Bill 4571—the Gas Station Attendant Act—only dedicated employees would be allowed to pump gas at Illinois gas stations. Drivers would not be allowed to fill up directly as they have for decades. e bill reads, “No gas may be pumped at a gas station in this “NEW JERSEY IS CURRENTLY THE ONLY STATE State unless it is IN THE NATION WITH A BLANKET BAN ON pumped by a gas DRIVERS PUMPING THEIR OWN GAS.” station attendant employed at the gas station.” It was introduced Feb. 5 and currently sits in the House Rules Committee. If passed, the selfservice ban would go into eﬀect January 1, 2021. New Jersey is currently the only state in the nation with a blanket ban on drivers pumping their own gas. Oregon in 2018 loosened its mandatory gas station attendant law, allowing drivers to use the pump themselves in most counties with fewer than 40,000 people. continued on page 46

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Legislative Update New Jersey Bans All Flavored E-Cigs New Jersey has banned all flavored vaping products—including menthol, mint and wintergreen—aer Governor Phil Murphy signed a bill that goes beyond the final guidance from the FDA on flavored e-cigarettes, reported CSP Daily News. Signed January 21, the New Jersey rule will go into eﬀect in April and will prohibit all flavors in vaping products such as e-ciga“The FDA’s final guidance, rettes, vaping cartridges, e-liquids, released January 2, e-cigars, vape pens and electronic prohibits flavors only in hookahs, according to the closed vaping-system amended version of the measure. cartridges, or pods, and e FDA’s final guidance, released exempts e-liquids and January 2, prohibits flavors only in so-called disposable closed vaping-system cartridges, e-cigarettes.” or pods, and exempts e-liquids and so-called disposable e-cigarettes. e federal guidance also exempts tobacco and menthol flavors. Violators of the New Jersey law will face fines starting at $500 for the first oﬀense, $1,000 for the second and $2,000 for the third.

California Seeks To Ban Flavored Tobacco Sales A newly introduced California Senate Bill 793 would ban flavored tobacco sales statewide, including menthol cigarettes and flavored e-cigs, reported ABC 10. If passed, SB 793 would make California the second state to ban sales of all flavored tobacco products, following Massachusetts’ lead. e bill mirrors a ban the city of Sacramento passed last year, which went into eﬀect the first week of January. Backed by 30 lawmakers, the bill's goal is to stop what it says is an “alarming resurgence of nicotine consumption among youth.”

CBD As A Dietary Supplement A bipartisan group of lawmakers recently introduced a bill in the U.S. House of Representatives that would give the FDA 46

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flexibility to allow hemp-derived cannabidiol (CBD) to be sold as a dietary supplement, reported e Motley Fool. House Agriculture Committee Chairman Collin Peterson, D-Minn., filed the bill amending the Federal Food, Drug, and Cosmetic Act (FD&C), and it is co-sponsored by James Comer, R-Ky.; Chellie Pingree, D-Maine; and omas Massie, R-Ky. e bill would also require the Department of Agriculture to produce a report on the regulatory and market barriers faced by hemp farmers.

Maryland Bans Disposable Flavored E-Cigarettes Maryland Comptroller Peter Franchot recently issued a policy banning the sale of disposable flavored e-cigarettes in the state, reported the Washington Post. Franchot said the new policy is an attempt to close the loophole in the FDA guidelines that ban the most popular flavored e-cigarettes but exempt disposable devices, which are cheaper than the refillable cartridges and increasingly being used by teenagers. e comptroller’s office sent the state’s roughly 8,000 licensed tobacco retailers and wholesalers a letter warning that the state now considers the disposable products contraband, and that selling the items could jeopardize their tobacco licenses.

Court Strikes Down Chicago Tobacco Tax e Illinois Supreme Court recently struck down a Chicago ordinance that imposed local excise taxes on a number of tobacco products, reported CStore Decisions. e Chicago ordinance was passed by the Chicago City Council in 2016 and sought to impose local excise taxes of 20-cents per cigar, $1.80 per ounce on smokeless tobacco products, 60 cents per ounce on pipe tobacco, and $1.80 per ounce on roll-your-own cigarette tobacco. A broad cross section of the industry filed a lawsuit to overturn the ordinance. e plaintiﬀs included the Cigar Association of America, the National Association of Tobacco Outlets Inc. (NATO, the Illinois Association of Wholesale Distributors, and the Illinois Retail continued next page

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Legislative Update Merchants Association, among others. In responding to the court ruling, Cigar Association President Craig Williamson and NATO Executive Director omas Briant stated, “is decision confirms our joint and long-held belief that the City of Chicago exceeded its authority in adopting excise taxes on other tobacco products.”

Legal Weed Up For Vote In New Jersey New Jersey residents will decide whether to legalize marijuana in the state, aer both

“IT ALSO SPECIFIES CANNABIS PRODUCTS WOULD BE SUBJECT TO STATE SALES TAX, AND MUNICIPALITIES COULD IMPOSE A LOCAL TAX, TOO.”

houses of the state Legislature voted recently to put the question on the 2020 ballot, reported NJ.com. An interpretation of the question to be included on the ballot states the soon-to-be appointed Cannabis Regulatory Commission for medical marijuana would oversee the market. It also specifies cannabis products would be subject to state sales tax, and municipalities could impose a local tax, too, if authorized by lawmakers. e ballot question has le both those who support and oppose legalization wary. Supporters worry the brevity of a ballot question will fail to encompass topics like social justice and revenue in the depth legislation could have, while opponents feel lawmakers are punting their duty to the public aer failed attempts to pass a law.

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NCASEF

HIGHLIGHTS

Your National Coalition is Committed to Franchisee Interests

NCASEF Says Deaf Ears Are Bad For The Brand The NCASEF is concerned that corporate profit and success are coming at the expense of store operators—a story that is not being told to prospective investors or to the public, the organization said in a recent press release. Stating that franchisees have struggled with profitability and working conditions for the last 15 years, the NCASEF said it is repeating its call for an overhaul of the 7-Eleven corporate team in Dallas. “With each passing day it becomes increasingly clear that this team is not putting franchisee interests first, as they claim to,” said Jay Singh, NCASEF Chairman. “They have shut the National Coalition out because some of our mem“Stating that bers have been critical of their franchisees have practices. We believe 7-Eleven’s struggled with prof- corporate leadership is a liability itability and working to the brand we love.” The story is similar in Japan, conditions for the where one franchise owner, Milast 15 years, the toshi Matsumoto, has become the NCASEF said it is face of a movement trying to repeating its call for pressure 7-Eleven to change its ways. After Matsumoto anan overhaul of the nounced he was closing on New 7-Eleven corporate Year’s Day because of a chronic team in Dallas.” labor shortage, 7-Eleven terminated his contract, citing customer complaints and his public criticism of the company. In a pitch to prospective franchise buyers on its website, 7-Eleven claims, “…your earning potential can be as big as you want to make it.” But, franchisees say that is not the way things are under present corporate leadership. 7-Eleven exercises pervasive control over many aspects of store operations, include limiting franchisees’ ability to control pricing. “Our contract grants franchisees control over in-store pricing, but mobile technology has different rules, and promotions like $1 coffee benefit 7-Eleven’s gross sales and

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app adoption while franchisees’ expenses are growing faster than profits,” said NCASEF Executive Vice-Chairman Michael Jorgensen. “Conditions for franchisees are worsening and the National Coalition’s requests for open dialogue and collaboration with the company continue to fall on deaf ears,” said Singh. “Only a small handpicked group of franchise owners are able to provide input for critical decisions that affect our business. One has to ask why 7-Eleven continually ignores and excludes the only elected representative body of its franchisees.”

Franchisees Raise Concerns Over SEI’s Retaliatory Tactics In the wake of 7-Eleven’s public retaliation against an outspoken Japanese franchise owner, NCASEF is calling on company leaders to improve communication and collaboration with their store operators. “We see a tremendous imbalance of power within the 7-Eleven franchise system, where the corporation exercises control over its franchisees and retaliates against those that speak out or offer criticism,” said NCASEF Chairman Jay Singh, a Texas franchise owner. In Japan, 7-Eleven has canceled the contract of franchisee Mitoshi Matsumoto, who has become the face of a movement, first for pressing the company’s mandate that stores remain open 24/7, then for closing his store on New Year’s Eve. Since Matsumoto’s emergence, other franchisees have spoken out about their issues. “We are concerned about the company’s abuse of power and retaliatory measures against franchisees that speak up,” said Executive Vice Chairman Michael Jorgensen, a Florida franchise owner who was part of a National Coalition contingent invited to Japan last year to learn about the issues store operators face there. “By trying to squelch Mr. Matsumoto, 7-Eleven is telling all its franchisees they had better not take a stand.” The publicity surrounding Matsumoto’s decision to close his store overnight prompted 7-Eleven to review the man-

date that all stores stay open 24 hours, 365 days a year, but after Matsumoto announced he would close for New Year’s, 7-Eleven announced a number of violations “The publicity surrounding against Matsumoto Matsumoto’s decision to seemingly unrelated to close his store overnight the closing. The company canceled his conprompted 7-Eleven to retract on January 1. view the mandate that all The head of Japan’s stores stay open 24 hours, Convenience Store union, Takanori Sakai, 365 days a year.” sent a letter to 7-Eleven questioning the company’s culture of open communication. “Is this the way we respond to our business partners who want to be the honest company you advocate?” he wrote. “It is a frightening realization for franchisees to see such a blatant abuse of power,” said Singh. “It is time for the leadership to commit to a collaborative relationship that protects store operators’ profits, health and well-being.”

Digital Promos Come At Franchisees’ Expense The NCASEF recently issued a press release stating that certain digital promotions—like the $1 coffee deal available through the 7Rewards app—are not benefiting franchisees, and SEI should give franchisee representatives a voice in determining promotional pricing. NCASEF points out that, although the contract grants storeowners control over the pricing in their stores, mobile technology has different rules, and it believes franchisees are largely being bypassed when decisions about the cost of digital promotions are made. “7-Eleven’s franchisee council, the NBLC, is told in advance about digital promotions, but they are not an elected body and have no independence from the brand to push back,” said NCASEF Chairman Jay Singh. “Our association represents the interests of all franchisees and should be included in the discussion about how promotional items are

priced through the app and how money from the ad fund is being allocated.” Unlike product promotions that are mostly paid for by vendors, $1 coffee and $0.49 Slurpees are considered “proprietary promotions,” whose costs are borne by franchisees. Only customers that have downloaded the 7Rewards app qualify for low-priced beverages, and franchisees say the digital promotions do not draw new customers to their stores like traditional advertising does. NCASEF said SEI has been investing heavily in technology and recently announced it has signed up 25 million loyalty members. At the same time, SEI under-spent its 2018 advertising budget by $4.9 million. “We are concerned that 7Eleven is relying on digital promotions at the expense of traditional advertising and marketing that is proven to drive business to our stores,” said NCASEF Executive Vice Chairman Michael Jorgensen. “The high-level numbers the company provides us do not offer a transparent view into how our ad money is being spent. Most other franchisors include elected franchisees in decisions involving the money they contribute to their national ad fund. It’s time 7-Eleven did the same.”

“The NCASEF recently issued a press release stating that certain digital promotions—like the $1 coffee deal available through the 7Rewards app—are not benefiting franchisees.” Sign Up For The Dispatch Newsletter! Sign up today to receive Dispatch, the NCASEF’s email newsletter that keeps you up to date on the latest 7-Eleven news and announcements from national leadership. With all the changes and challenges happening within our system, the Dispatch newsletter serves as a direct line of communication between the National Coalition and the franchisee community. Receive urgent information, alerts, and reports directly from national leadership as it happens. Head over to www.NCASEF.com and click on the “Subscribe to Our Newsletter” button on the upper right column of the homepage. Then fill out the form to be placed on the Dispatch email list.

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Fun & Deals: FOAGLA/San Diego FOA Trade Show!

It was all about great products and fabulous vendor deals at the 10th Annual FOA of Greater Los Angeles and San Diego FOA Trade Show, held January 22, 2020 at the Pechanga Resort & Casino in

Brinderjit Dhillon won the $10,000 grand prize—as well as a $1,000 prize—during the trade show’s raffle cash giveaway.

Temecula, California. Franchisees flocked in from all over Southern California to view the latest offerings from the supportive vendor community and get in on some amazing show-only deals. There was face painting and balloons for the kids, and a raffle giveaway with cash prizes ranging from $500 to $10,000. It was a truly memorable event for both franchisees and vendors.

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SAN DIEGO FRANCHISEES END YEAR ON HIGH NOTE Members of the San Diego FOA and their families gathered at the Hilton San Diego/Del Mar on December 14 to celebrate the end of the year with colleagues and friends at the groupâ&#x20AC;&#x2122;s Annual Holiday Party. The event featured great food, music, dancing and an appearance by Santa and Mrs. Claus. It was a fun event and a fantastic way to close the old year and welcome 2020.

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Midwest FOA Holiday Party A Family And Cultural Affair By Guliz Sonmez

The Midwest FOA celebrated the New Year with our fellow Michigan and how you can help, please contact office@midwestfoa.com. franchisees and their families at our holiday show and dinner on January MWFOA Board member Adnan Siddiqui and MWFOA President Jim 8, 2020 in Troy, Michigan. FranBayci presented the Azteca Youth Enrichment chisees mingled with vendors group with a $1,000 donation. Thank you Adnan and were pleasantly surprised for introducing the Azteca Youth Enrichment group by the Azteca Youth Enrichment to our 7-Eleven franchisees and for your continued group, which performed cultural support of the community. dances for our franchisees and vendor partners. Azteca's core aim is to keep kids off the streets and in positive alternate activities. They succeed in this, and thereby enhance the quality of life for the kids involved. All Azteca teachers are volunteers and have welcomed over 5,000 kids since 1973. If you'd Adnan Siddiqui and Jim Bayci present like more information on the a $1,000 donation to the Azteca Youth Girls from the Azteca Youth Enrichment group. Azteca Youth Enrichment group Enrichment group.

Midwest FOAâ&#x20AC;&#x2122;s Team Pink Out Honors Franchiseeâ&#x20AC;&#x2122;s Wife By Guliz Sonmez

Our Pink Out Slurpee fundraising ended 2019 with a $30,722.18 donation to The National Breast Cancer Foundation in honor of Yvonne Dabish, wife of our fellow franchisee Ammar Dabish, who lost her battle with breast cancer last year. Team Pink Out, led by Michigan franchisee The Pink Out Patty Miller, worked Slurpee fundraising campaigned hard and had so much honored fun raising funds for this Yvonne Dabish. worthy cause. Thank you to all our generous customers, Patty's family and friends, Monster Energy, Dough Master, Keurig Dr Pepper, the Midwest FOA, 7-Eleven franchisees, and 7-Eleven field consultants and market managers. We sold 900 shirts, jackets 54

and hats, 3,000 wristbands, 17,322 Pink Out Donuts, and 300 key chains and handmade items. Patty is truly thankful and humbled by all your support. For more information about Pink Out or to donate, please reach out to office@midwestfoa.com or 847-999-5558.

The Midwest FOA Pink Out Slurpee team.

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chise owners are struggling to keep convenience stores open 24 hours a day despite plateauing demand from consumers and a severe shortage of workers. The Ministry of Economy, Trade and Industry had tasked the panel, consisting mostly of academics and business leaders, with drawing up a report on measures to place the industry on a more sustainable path. Warning that the current business model of convenience stores is “facing a crisis,” the panel urged chains to take a more flexible stance on business hours. The panel welcomed Ministop Co.'s decision to shoulder part of the cost of paying workers starting in the business year from April 2021, and called on other major chains such as SevenEleven Japan Co., FamilyMart Co. and Lawson Inc. to consider following suit. The panel also called for greater flexibility in setting royalty fees paid by franchise owners, suggesting a revamp of the current practice of collecting a set amount based on gross profit. It pointed to long-term contracts, often spanning 10 to 15 years, as favoring convenience store chains and making it harder for franchise owners to adapt to changing

business conditions. The panel further urged chains to improve communication with franchise owners and to establish ways to settle disputes without taking them to court.

McLane Holds Its First Tech Summit McLane Company, Inc., recently held its first Technology Summit and User Conference. The event took place February 10-11, 2020, at The Hotel Contessa in San Antonio, Texas. The Technology Summit helped customers gain a deeper understanding of how McLane’s software and hardware solutions can foster operational excellence in their organizations, the company said in a press release. McLane said it understands the competitive advantage technology can provide and has made a heavy investment in building solutions specifically geared for the industry. From the corporate office to the back office, this event educated retailers on the tools

they need to help them overcome their everyday challenges, the company said.

CBDs & Frictionless Checkout Are Future C-Store Trends Two of the biggest trends shaping convenience stores’ current and future landscape in the U.S. are in-store cannabis sales and frictionless checkout technology, reported Petrol Plaza, citing TrendSource’s end-of-year 2019 Convenience Store Industry Report. TrendSource said savvy operators should already be preparing for a world in which cannabis-derived products, particularly CBD products, will appear on c-store sales floors. The agency’s report suggests that the only resistance to c-store cannabis products seems to come from the silent generation where opposition to cannabis remains firm, but in every younger generation from boomers all the way to the youngest respondents there is comfort if not enthusiasm. Issues surrounding in-store automation similarly break along generational continued next page

Want to talk to other franchisees? To find the FOA closest to you. Visit www.NCASEF.com to contact any one of the 43 local Franchise Owner’s Associations nationwide. Want to talk to someone at the national level? Call the NCASEF Vice Chairman in your area: The National Coalition has Franchise Owner’s Association member organizations in all 33 states in which 7-Eleven operates. 56

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Paul Lobana, Vice Chairman, President, Southern California FOA

Rehan Hashmi, Vice Chairman, Vice President, Alliance Of 7-Eleven Franchisees

paullobana@aol.com 818.203.2527

rehan711@yahoo.com 847-845-8477

Ajinder Handa, Vice Chairman, President, Greater Seattle, FOA

National Office

425-438-8381 ajinderhanda@hotmail.com

nationaloffice@ncasef.com 210.971.9211

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a consumer pays for their purchases. Higher rates are looming for transactions on e-commerce sites, while retailers in certain services categories will see fees decline. • Auto maker Subaru has set a target to sell only electric vehicles worldwide by the first half of the 2030s, in a move toward its long-term goal of a carbon-free society, reported Reuters. • Shell Oil Company recently announced that Shell-branded stations across the U.S. will now accept payment through Uconnect Market, allowing consumers to find the nearest gas station, purchase fuel and services, and save money on Shell fuel purchases, all from the comfort of their vehicles. • Recreational marijuana use became legal in Illinois on January 1, and the state’s 37 dispensaries generated 77,128 transactions to tally more than $3.17 million in first-day sales, reported CNN Business. Sales totaled nearly $40 million in the first month and dispensaries sold 972,045 items. • Sheetz announced that its in-store, employee-driven Sheetz for the Kidz campaign raised a record $704,658 during its 2019 Christmas drive. The fundraiser gives children in need the chance to celebrate the holidays with gifts like toys and clothes • The Bureau of Labor Statistics reported that the economy added 145,000 jobs in December and the unemployment rate was unchanged at 3.5 percent. Retail was the biggest job gainer, adding 41,200 jobs, driven primarily by a 33,200 rise in employment in clothing stores. Restaurants added 15,900 jobs. • According to 5W’s Consumer Culture Report, 83 percent of millennials say it’s important to them that the companies they buy from align with their values, and 65 percent have boycotted a company they have previously purchased from because of their stance on an issue. • Total wine consumption in the U.S. decreased in 2019 for the first time in 25 years, dropping 0.9 percent the year prior, according to the IWSR Drinks Market Analysis, which provides data and intelligence on the global beverage alcohol market. • Walmart has been testing a new technology, called Alphabot, continued on page 58

lines, with younger consumers proving far more “ree in four retailers said that interested in and comfortin-store sales increased in 2019, able with frictionless compared with only 7 percent checkout and other technological innovations. As who said that sales slumped.” these technologies become table stakes thanks to opportunity in 2020, compared with Amazon Go, TrendSource said c-store 26 percent who said lunch and 23 peroperators should begin considering the cent who said dinner. Strong industry most efficient and effective ways to sales in 2019 also pushed retailer optibegin going frictionless. mism to record-high levels: 89 percent of retailers said they are optimistic about their economic prospects for the first quarter of 2020, which is four points higher than the same time last Convenience retailers overwhelmyear. The top concerns identified by reingly said their sales increased in 2019, tailers that could affect their businesses according to U.S. c-store owners surin 2020 are: regulations/legislation (60 veyed by NACS. Three in four retailers percent); labor issues (58 percent); (74 percent) said that in-store sales incompetition from other convenience creased in 2019, compared with only 7 stores (50 percent); competition from percent who said that sales slumped. other retail formats like drug and dolAdditionally, 62 percent said their fuel lar stores (33 percent); and a potential gallons sold increased, compared with decrease in driving/increase in gas 25 percent who said their fuel sales deprices (30 percent). creased. A strong contributor to instore sales growth was better-for-you items that include fruit, vegetables, nuts, health bars and yogurt. Two in three (67 percent) retailers surveyed Convenience channel retailers, said their better-for-you products endistributors and suppliers are mostly joyed increased sales in 2019. upbeat about their business prospects Furthermore, 45 percent of c-store in 2020, although they are a bit less enretailers said breakfast is their biggest thusiastic than they were last year at this time when setting expectations for 2019, reported CSNews Online. The findings of the 18th annual Convenience Store News Forecast Study show that more than two-thirds of c-store retailers and nearly three-quarters of suppliers/wholesalers are optimistic about their companies’ business prospects for the year ahead. While those numbers are high, they represent

C-Store Owners Say Sales Increased In 2019

C-Store Industry Players Feeling Good About 2020

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a slightly more sober view compared to the previous year. A year ago, 25 percent of the retailers surveyed said 2019 would be “their best year ever.” This year, only 14 percent of retailers said the same about 2020 when they were asked to choose a rating on a scale of one to five, with 1 signifying that 2020 would be “Terrible, wake me when it’s over,” and 5 denoting that “It’s going to be our best year ever.” On the supplier/wholesaler side, nearly 74.4 percent chose a rating of 4 or 5 this year, compared to 88 percent last year. However, this year, 30.8 percent did predict that 2020 would be “their best year ever,” up from 26.8 percent a year ago. Interestingly, despite this year’s muted optimism, the Forecast Study findings project an overall industry sales increase of 3.8 percent, slightly better than the 3.4 percent increase projected a year ago.

NACS Asks FDA To Delay Tobacco 21 Enforcement The National Association of Convenience Stores announced that it has joined with five other retail associations to ask the FDA to wait to enforce the new tobacco-21 minimum purchase age law until the agency has issued the required implementing regulations. In a letter, the associations outline the steps retailers swiftly must take to retool operations after the FDA said the law is in effect nationwide, surprising retailers. The letter to the FDA also explains how

complicated the transition will be for retailers who must retrain employees, update signage, reprogram POS systems and inform customers, many of whom could legally purchase tobacco products before the law change. In addition to NACS, the letter was signed by the Food Marketing Institute, National Grocers Association, National Association of Truckstop Operators, Petroleum Marketers Association of America and the Society of Independent Gasoline Marketers of America. Given that the FDA has said that it is illegal for a retailer to sell any tobacco product to someone under 21, NACS urges all retailers to take the steps necessary to come into compliance. While there are unanswered questions about when the FDA plans to enforce this requirement and whether the agency can legally enforce it before updating its regulations, retailers should be aware that the FDA views any sale to a person younger than 21 as a violation of the new law.

Japan C-Store Sales Increase Sales at major convenience stores in Japan in 2019 increased 0.4 percent from the previous year on a same-store basis, up for the second straight year, according to the data from the Japan Franchise Association. The increase reflected robust demand—mainly from double-income households—for pre-

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for its grocery business that should enable it to pick, pack and deliver shoppers’ online grocery orders faster and with fewer headaches, reported CNBC. Grocery sales account for 56 percent of Walmart’s total U.S. revenue. • The number of all-you-can-eat buﬀets in America has fallen by 26 percent since 1998, even as the total number of all restaurants in America has risen by 22 percent, according to the market research firm NPD Group. • Several national drugstore chains—including Walgreens, CVS, Walmart and Rite Aid—are suing physicians in two Ohio counties for allegedly causing the country’s current opioid crisis by excessively prescribing the highly addictive drugs, reported The Hill. The pharmacies, facing their own lawsuit from Summit and Cuyahoga counties, said in a court filing that the doctors need to be held liable since they wrote the prescriptions. • Japan’s birth rate dropped below 900,000 for the first time since records started being kept in 1899, reported Reuters. The 5.9 percent decline from 2018 will put additional strain on welfare finances to support the country’s aging population. • Washington overtook Baltimore as the No. 1 “Bed Bug City,” reported USA Today. Chicago, Los Angeles and Columbus, Ohio, rounded out the top five cities on pest control company Orkin’s list, which ranks metropolitan areas where Orkin performed the most bedbug treatments, residential and commercial, from December 2018 through November 2019. • Worldwide spending on robotics systems and drones will be $128.7 billion in 2020, an increase of 17.1 percent over 2019, according to a new update to the International Data Corporation (IDC) Worldwide Robotics and Drones Spending Guide. By 2023, IDC expects this spending will reach $241.4 billion with a compound annual growth rate of 19.8 percent. • Nissan is testing a vehicle subscription service in the Houston area, reported Marketing Daily. Under the program, drivers can switch their vehicles every day withcontinued on page 66

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pared foods and products that are easy to cook, such as frozen food and noodles. A state-funded program to grant points to shoppers using cashless payment methods, introduced to cushion the impacts of the consumption tax hike last October, also pushed up sales. As of the end of 2019, the number of major convenience stores stood at 55,620—down 0.2 percent from a year earlier. On an all-store basis, sales increased 1.7 percent. Per-customer sales on a same-store basis grew 2.1 percent, up for the sixth consecutive year. But the number of shoppers fell 1.6 percent, down for four years in a row, due to intensifying competition with drug stores and supermarkets, as well as unfavorable weather, such as typhoons.

Wawa Hit By Cyberattack A data security breach has affected customers who used credit and debit cards at all Wawa convenience stores, reported the Richmond Times-Dispatch. The retailer’s information security team discovered malware on Wawa payment processing servers on December 10, but it affected customer payment card information since March 4, 2019, Wawa’s CEO Chris Gheysens said. The breach was contained by December 12, he added.

The breach affected credit and debit card numbers, expiration dates, and cardholder names on payment cards used at Wawa in-store payment terminals and at fuel pumps. The company said no other personal information was accessed, including debit card personal identification numbers, credit card security codes or driver’s license information used to verify age-restricted purchases. Wawa said it is working with law enforcement agencies to support a criminal investigation of the data breach. In the meantime, at least six lawsuits seeking class-action status have been filed in federal court in Philadelphia, claiming the data breach was due to “Wawa’s inadequate data security measures and cavalier approach to data security,” reported the Philadelphia Inquirer. In late January, the credit and debit card numbers stolen during the data breach were found up for sale on one of the most notorious dark web marketplaces, “Joker’s Stash.”

“Convenience stores and gas stations are becoming the go-to places for quick meals, including dinners-to-go.”

Share Your Experience and Expertise Do you have a store experience, some operational expertise, or thoughts about the 7-Eleven system you would like to share with your fellow storeowners? Avanti Magazine welcomes articles from franchisees interested in communicating their ideas, knowledge, suggestions, opinions, etc. to the franchisee community at large. Please contact Sheldon Smith at sheldon.smith5@verizon.net or 215-750-0178 if you would like to contribute an article to Avanti.

C-Stores Are America's New Favorite Restaurants Convenience stores have reinvented their businesses to adjust to the changing ways Americans eat and as a result are becoming the go-to place for quick meals, reported CNN Business. Snacking is becoming consumers' preferred meal of choice, and Americans are cooking fewer of their dinners at home as they eat out or order in from their couch. Consumers, especially Millennials, are not always willing to go to a quick-service restaurant, a fast-food joint or walk around a 40,000-squarefoot grocery store, according to analysts. Instead, they'll often head to a convenience store, where the average amount of time customers spend inside the store is less than four minutes. As such, the convenience stores and gas stations that dot America's retail landscape have worked to improve their dinners-to-go and coffee. Today, chains like 7-Eleven, Sheetz, Wawa and Kwik Trip offer meal kits, salads, keto snacks, Kombucha and espressos. That overhaul is driving convenience stores' rise, unexpected survivors in an industry suffering mass store closings and shoppers shifting online. While delivery from Amazon has redefined what convenience means for many Americans, the 24-hour, 3,230-average-square-foot convenience store still fills a niche for time-strapped customers searching for a bite to eat and a fill up at the pump, the article states. continued next page

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Rutter’s Suffers POS Data Breach Convenience store chain Rutter’s was subjected to a POS skimming attack for at least seven months affecting card readers inside some stores and at gas pumps, reported SC Magazine. Rutter’s was informed of the problem by a third party and on January 14, 2020 a company investigation confirmed a data breach did take place. The general time frame the malware was present ranges from October 1, 2018 through May 29, 2019. One location was hit earlier, starting August 30, and nine others were infected starting on September 20. Rutter’s owns and operates 72 locations. The company believes the POS systems at some fuel pumps and inside some of its convenience stores were compromised through malware installed on the corporate payment processing systems. The malware has been removed. The company is notifying by mail customers who were known to have used their cards at the affected locations and for whom the chain has an address.

Retail Foodservice Purchases On The Rise A new study by research firm Technomic reveals that 66 percent of consumers purchase prepared foods from retail at least three times a month, compared to 55 percent in 2017. takes a look at what’s driving this growth, including recent retailer investments in foodservice menu variety and quality. Highlights from Technomic’s 2019 Retail Foodservice Consumer Trend Report include: • 73 percent of prepared foods purchases are taken to go. • 71 percent of grocery delivery users say they would add a prepared-foods

“Research firm Technomic found that 66 percent of consumers purchase prepared foods from retail at least three times a month.” meal to their grocery delivery orders at least occasionally. • 47 percent of consumers eat their prepared foods immediately after purchase (as opposed to waiting an hour, a day, etc.).

Visa Warns Of POS Cyber-Attacks At Gas Stations Visa recently announced that cybercriminals are employing new tactics to steal credit card information from around the U.S. by compromising the POS systems at gas stations, reported PYMNTS.com. Visa identified three different types of attacks. One involves compromising the merchant via a phishing email sent to an employee. The email contains a malicious link that, when clicked, installs a Remote Access Trojan (RAT) on the merchant network and grants the criminals network access so they can harvest payment card data. The second attack is a different breach of access inside the fuel dispenser

“Visa has warned that cybercriminals are employing new tactics to steal credit card information from around the U.S. by compromising the POS systems at gas stations.”

system. The criminals gain access and then move laterally inside of the POS environment, although how they get access is not known. The third attack was perpetrated on a hospitality merchant, but could eventually be used at a gas station. Visa thinks that cybercrime group FIN8 may be responsible for this particular attack because it employed a FIN8-attributed malware, but also used new malware not previously seen used by the group in the wild.

Retailers Seeing Rise In Organized Retail Theft About 97 percent of U.S. retailers have experienced organized retail crime (ORC) over the past year, averaging $703,320 in losses per $1 billion in sales, according to the 15th annual ORC study released by the National Retail Federation. Nearly two-thirds (65 percent) of retailers said ORC is a higher priority for their companies than five years ago, while 56 percent were allocating additional technology resources to the issue and 44 percent were increasing their loss prevention budgets. Among steps taken to fight ORC, 38 percent had changed or were planning to change return policies, 37 percent were doing the same with point-of-sale policies, 27 percent with employee screening and 24 percent with the way they handle trespassing. Retailers’ efforts to fight ORC focus on more than just preventing the theft of merchandise. The survey found that 68 percent of retailers said ORC gangs had shown more aggression or violence in the past year, and many anti-ORC resources are directed toward protecting continued on page 62 AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

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the safety of customers and employees. The study also reveals that the top five cities for ORC in the past year in order were Los Angeles, New York, Houston, Chicago and Miami.

Texas Gas Pumps Get New Stickers The Texas Department of Licensing and Regulation (TDLR) recently rolled out new stickers on some H-E-B gas pumps in Austin to let people know the agency is now in charge of investigating credit card skimming, reported CBS Austin. Since September 2019, the TDLR has been working with local law enforcement to investigate potential skimming cases. They've opened 315 fuel related cases regarding quality and skimming, and have closed 121 cases. The TDLR said its goal is to make filing a complaint more user-friendly. Consumers will need to know the gas station name and address, the date of the incident, and which pump they were at. Once a complaint is filed, someone from the TDLR will be out within hours to investigate. The agency said all gas station in Texas will have the new pump stickers by September 2020.

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Interchange Fee Class Action Settlement Cleared By Court The U.S. District Court for the Eastern District of New York on December 13 approved a settlement in the longrunning litigation brought by NACS and other merchants against Visa, MasterCard and the largest card-issuing banks over excessive interchange fees, reported NACS Online. The settlement provides $5.54 billion to the class of merchants that accepted Visa or MasterCard cards at any time since January 1, 2004, and only applies to those businesses that have not already settled their claims against the defendants. The settlement also does not resolve the ongoing class action claims against the defendants seeking changes to the Visa and MasterCard rules, the article states. It is not clear when the claims process will start or how long it will take, nor is it clear how long the ongoing litigation against Visa’s and MasterCard’s rules will continue. According to the article, given the likelihood of appeals and the litigation process, merchants should expect that both will take years to reach resolution.

Gas Stations Upgrading Pumps To Accept Chip Cards Gas stations around the U.S. are rushing to upgrade fuel pumps to accept credit and debit cards with chips after Visa and Mastercard rejected a request to delay a looming deadline to complete the work, reported Bloomberg. Beginning in October, station operators that haven’t

modernized their pumps will face liability for any card fraud that happens at their businesses. Fuel retailers that don’t upgrade could face costs of as much as $201,000 per store over the next seven years, according to data compiled by Conexxus, a non-profit that represents convenience stores. The group expects the fuel industry to suffer $451 million of card fraud in 2020 alone. In a 2019 survey by Conexxus, almost 70 percent of respondents who own a convenience store said they haven’t upgraded any outside pumps to the new so-called EMV technology. More than half of participants cited a lack of available software for not having chip technology fully deployed, while about 15 percent pointed to a shortage of hardware. The convenience-store industry blames Visa and Mastercard for not consulting them when setting deadlines.

Philadelphia Tobacco Retailers Busted For Selling To Minors The Philadelphia city health department will not renew tobacco sale permits for 149 retailers throughout Philadelphia that sold cigarettes to minors, reported WHYY. All the retailers whose permits were revoked sold to minors at least three times over the past two years. They represent 6 percent of the city’s roughly 2,600 tobacco retailers, which include restaurants, hookah bars, vape shops, laundromats, gas stations and convenience stores. In 2017, Philadelphia approved regulations that capped the number of retailers in each planning district, and denied tobacco sales licenses to any retailer caught selling to minors more than three times in 24 months. The city started counting violations in 2018. By continued on page 64

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the time licenses were up for renewal in January 2019, four stores had reached the threshold. This year, 149 reached it.

Tobacco Sales & Advertising Drop The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide declined from 229.1 billion in 2017 to 216.9 billion in 2018, according to the most recent Federal Trade Commission Cigarette Report. The report also states that the amount spent on cigarette advertising and promotion decreased from $8.64 billion in 2017 to $8.40 billion in 2018. Price discounts paid to cigarette retailers ($6.15 billion) and wholesalers ($1.05 billion) were the two largest expenditure categories in 2018, the report shows. Additionally, combined spending on price discounts decreased from $7.38 billion in 2017 to $7.21 billion in 2018, accounting for 85.8 percent of industry spending.

Wawa Sued By Former Employees Over Stock Shares Wawa has recently been busy dealing with lawsuits filed by former employees who accused the convenience retailer of cheating them out of millions in company stock, reported the Philadelphia Inquirer. After settling a lawsuit in 2018 for $25 million filed by more than 1,200 former workers, Wawa is now negotiating a second federal lawsuit settlement with a larger group—who say they, too, were illegally forced to sell shares at a discount, so members of the founding Wood family could regain majority control of the fast-growing convenience64

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store chain. Consolidating control could make it easier for family leaders to sell the company for billions of dollars at terms favorable to them in the future.

Rutter's To Expand Video Gaming Rooms Convenience retailer Rutter’s is planning to put video gaming terminal (VGT) rooms in as many of its Pennsylvania locations as possible, reported Convenience Store News. Rutter’s, which operates roughly 75 c-stores in Pennsylvania, Maryland and West Virginia, debuted its first VGT room in York in August 2019 and expected to have 12 of its Pennsylvania c-stores featuring VGT rooms by the end of the year. After the governor legalized video gaming terminals and expanded gambling statewide, and allowed VGTs at certain “truck stop establishments,” Rutter’s started considering the appeal of VGTs in its strategic plan. The retailer’s model calls for larger stores, heavy foodservice and larger lot sizes, which meet the parameters to qualify for a VGT room. In addition, Rutter’s thought VGTs would be a way to reach new and existing customers.

Why Chick-fil-A Franchises Cost $10K Of all the franchise systems in the U.S. Chick-fil-A is by far the cheapest to get into, with a franchise fee of only $10,000, reported The Hustle. Chick-fil-A also stands out because it has no minimum net

worth requirement and it has the lowest total investment cost for a franchisee— $10,000. The reason for this is because, unlike other franchise models, Chickfil-A—not the franchisee—covers nearly the entire cost of opening each new restaurant (which runs from $343,000 to $2 million). The franchisee only pays the $10k franchise fee. Chick-fil-A pays for and retains ownership of everything— real estate, equipment, inventory—and in return, it takes a much bigger piece of the pie. While a franchise like KFC takes 5 percent of sales, Chick-fil-A commands 15 percent of sales plus 50 percent of any profit.

Minimum Wage Hikes Hurt Small Businesses As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate,” reported the Wall Street Journal, citing a recent study from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology examines how states with the federal minimum wage fare when the nationwide minimum goes up. Using data on one million loans—averaging around $100,000—made through continued next page

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the Small Business Administration, the study found that for each $1 increase in the minimum wage, loan amounts dropped 9 percent more in the affected states; the risk of default was 12 percent higher; the average credit score for small companies in those states showed a sharp decline; business entries fell 4 percent in the year the minimum wage went up; and a year later, business exits rose 5 percent.

Candy Plan Focuses On Younger Shoppers SEI is keeping a close eye on Gen Z and millennial shoppers as it utilizes its proprietary tools and techniques—including the 7-Eleven app and 7Rewards loyalty programs—to drive trial and repeat business to its candy category, reported CSP Daily News. Andrew Lee, SEI’s senior category manager of centerstore merchandising, told the trade publication that he and his team are also preparing for the next consumer coalition to exert its influence, the Gen Alphas, who were born starting in 2010. Lee said millennials and Gen Z customers are looking for an innovative and differentiated assortment of candy, so his team strives to make 7-Eleven a destination for them to find exclusive and limited-edition options. His team has also created social programs that include augmented reality experiences, online games and giveaways. As for Gen Alpha, Lee said this consumer group has led his team to expand novelty sets with a focus on surprise and delight items, such as Kinder Joy and Yowie.

Advertiser’s Index

Yowie Surprise Rescue Series includes one of 26 collectible endangered species animals.

Anheuser Busch ...................8 Aon Risk Services..........34-35 Blue Bunny/Wells ..............11 Cima Confections ...............55 Coca-Cola......Cover 2, 3,23,31 Danone...............................15

Diageo Guinness ..................7 Glanbia...............................51 ITW GTR .............................53 Johnson&Johnson .............41 JUUL ...........................Cover 3 Kellogg's.............................17

Living Essentials.................63 Mars Ice Cream...................18 McLane...............................21 Miller..................................38 Mondelez...........................13 Monster...........................4,24

National Confectioners ......59 Nestle Waters.....................65 Ocean Spray .......................44 Path Water .........................36 Pepsi Quaker ......................23 Simply Orange .....................5

Smuckers............................67 Swisher....................6,Cover 4 Tell Industries.....................32 Windsor..............................26

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FOA Board Meeting Dates CENTRAL FLORIDA FOA

SAN DIEGO FOA

Phone: 207-415-0924

Phone: 619-713-2411

May 19, 2020 August 25, 2020 November 10, 2020

March 19, 2020 April 9, 2020 May 21, 2020 June 11, 2020 July 16, 2020 August 20, 2020 September 17, 2020 October 22, 2020 November 19, 2020

COLUMBIA PACIFIC FOA Phone: 503-998-5941 March 11, 2020—Board Meeting June 2, 2020—Board Meeting September 17, 2020—General Members Meeting October 29, 2020—Board Meeting

FOA OF GREATER LOS ANGELES Phone: 619-726-9016 March 17, 2020 April 21, 2020 May 19, 2020 June 16, 2020—Meeting & Mini Trade Show July 21, 2020 September 15, 2020 October 20, 2020—Meeting & Mini Trade Show November 17, 2020

MIDWEST FOA Phone: 847-971-9457 March 19, 2020—General Meeting, co-hosted with Alliance of 7-Eleven Franchisees FOA April 2, 2020—General Meeting May 21, 2020—Board Meeting June 25, 2020—Board/General Meeting, co-hosted withAlliance of 7-Eleven Franchisees FOA July 23, 2020—Board Meeting August 20, 2020—Board Meeting October 22, 2020—General Meeting & Golf Social October 29, 2020—Board Meeting November 19, 2020—Board Meeting

SOUTHERN CALIFORNIA FOA Phone: 818-357-5985 March 18, 2020 May 20, 2020 July 15, 2020 September 16, 2020 November 18, 2020

SOUTH NEVADA/ LAS VEGAS FOA Phone: 702-561-0311 March 12, 2020—Board Meeting March 26, 2020—General Meeting April 2, 2020—Board Meeting May 7, 2020—Board Meeting June 11, 2020—Board Meeting June 25, 2020—General Meeting July 16, 2020—Board Meeting August 9, 2020—Board Meeting September 10, 2020—Board Meeting September 17, 2020—General Meeting October 8, 2020—Board Meeting November 12, 2020—Board Meeting November 19, 2020—General Meeting & Elections December 10, 2020—Board Meeting

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SOUTH TEXAS FOA Phone: 702-249-3301 March 11, 2020—Board Meeting March 18, 2020—General Meeting April 8, 2020—Board Meeting May 20, 2020—Board Meeting June 17, 2020—Board Meeting June 20, 2020—General Meeting July 8, 2020—Board Meeting August 19, 2020—Board Meeting September 9, 2020—Board Meeting September 16, 2020—General Meeting October 7, 2020—Board Meeting November 11, 2020—Board Meeting November 18, 2020—General Meeting December 2, 2020—Board Meeting

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out a long-term contractual commitment. Called Nissan Switch, the program oﬀers a variety of vehicles, including the all-electric Nissan Leaf Plus, Titan pickup and GT-R. •Amazon’s forthcoming grocery store in Woodland Hills, California, may include a “hidden” microfulfillment component, reported Winsight Grocery Business. Floor plans filed with the city of Los Angeles for the new store reveal a 7,200square-foot chunk at the rear of the store where a robotic pick center will assemble ambient items intended for pickup or delivery orders. • While more Americans than ever plan to put their tax refunds into savings this year, they are also putting some money toward purchases, according to the National Retail Federation’s annual survey. Of the 65 percent of continued on page 72

SEI PILOTS CASHIERLESS STORE SEI announced that it is testing a cashierless store at its corporate headquarters, in Irving, Texas. During the pilot, the 700-square-foot non-traditional store is available only to 7Eleven employees. A proprietary mixture of algorithms and predictive technology enables the store system to separate individual customers and their purchases from others in the store, the company said in press release.

considers an organization's “total commitment” to tapping into military talent. product raffles and giveaways, and a NASCAR racing simulator. Classic 7-Eleven cuisine like Big Bite hot dogs and pizza slices were sold for $1, and small Slurpees, medium coffees, and Big Gulp drinks were free. According to the article, the new 7-Eleven will entice guests into parking, rather than circling the airport while texting. The South Cell Waiting Lot was built in 2006 in order to reduce the number of drivers driving around the terminals while waiting for loved ones, something that increases traffic and the potential for accidents.

A MILITARY FRIENDLY COMPANY 7-Eleven has been recogThe concept store offers an nized as a 2020 Military Friendly assortment of the most popular “At 7-Eleven’s Company by VIQTORY, a serviceproducts sold in 7-Eleven stores, cashierless disabled, veteran business enterincluding beverages, snacks, food, store, a detailed prise that connects the military groceries, over-the-counter drugs receipt appears community to civilian employand non-food items. The product in the app auto- ment, educational and entrepremix will continue to be refined, matically after neurial opportunities through SEI said. Shopping in the new the customer G.I. Jobs, Military Friendly and cashierless 7-Eleven store is sim- exits the store.” Military Spouse, reported ple. To test the store, employees CSNews Online. 7-Eleven is download an app, sign up, check in at the store, among 76 employers recognized in this enter the store, shop and exit. A detailed receipt year's listing. appears in the app automatically after the cusThe Military Friendly Compatomer exits. nies list is created each year based

7-ELEVEN OPENS AT ORLANDO AIRPORT A new 7-Eleven store opened at the Orlando International Airport's South Cell Phone Lot on February 13, reported the Orlando Weekly. The grand opening festivities included

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on extensive research using public data sources and responses to the proprietary, data-driven Military Friendly Employers, Spouse, Supplier Diversity and Brands survey from all participating companies. To be a Military Friendly Company, the association

WILD ALASKA POLLOCK SANDWICH 7-Eleven has launched a new Wild Alaska Pollock Fish Sandwich menu item in participating U.S. stores, the Association of Genuine Alaska Pollock Producers (GAPP) announced. The herb-crusted Wild Alaska Pollock (WAP) fillet with American cheese and tartar sauce on a buttery bun will be available until April 20, 2020 and will retail for $2.49. Consumers looking for a Lenten meat alternative can purchase the product for a promotional price of $2 on Fridays through the 7REWARDS loyalty app, the GAPP said in a released statement.

QUAKE ENERGY DRINK SLURPEE Just months after making a splash with Quake, its private brand performance energy drink, SEI boosted its Slurpee drink lineup with an exclusive, new flavor—Quake Energy Berry Blast. Available at participating 7-Eleven, Stripes and Aplus stores while supplies last, the specially formulated, multi-berry-flavored Slurpee contains B vitamins and electrolytes and is energized with 69 mg of caffeine. A 12-ounce serving of the snow-white frozen beverage contains 1 gram of sugar. “When Quake became an instant hit last summer, Slurpee lovers immediately recognized its potential as a Slurpee flavor. Our beverage team has taken that idea and created a great product our Slurpee fans will love,” said SEI President and CEO Joe DePinto.

“7-ELEVEN’S QUAKE SLURPEE IS BASED ON ITS OWN PRIVATE BRAND PERFORMANCE ENERGY DRINK.” continued next page

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LEAP-WORTHY DEALS Participating 7-Eleven stores offered $2.29 whole pizzas inside and outside of store to celebrate Leap Day on Saturday, February 29. From 12:01 a.m. to 11:59 p.m. on 2/29, 7-Eleven customers were able to: • Purchase whole pizzas for the one-dayonly price of $2.29 each at participating stores. • Order $2.29 whole pizzas for delivery through the 7NOW delivery app. • Those customers new to the 7NOW delivery app received a $29 discount on any 7NOW delivery order over $50 by simply adding the promo code upon checkout: 29OFF50. The 7NOW delivery app is available to download from Google Play, the Apple App Store or the online website. To place an order for delivery, customers simply insert their address, add items to their cart, and check out. 7NOW delivery is available 24/7. Real-time tracking lets customers know when to expect their 7NOW app orders.

SEI TO GROW PRIVATE LABEL SALES SEI plans to take its private label to new levels in the coming years, both in the number of items and in sales, reported Store Brands. Recently, the company rolled out a new private brand—24/7 Life—that brought with it a new array of private label electronics accessories benchmarked for quality against top national brands. 24/7 Life will take over all of 7-Eleven’s nonfood private label products, creating a clearcut delineation between its nonfood store brand

offerings and its packaged foods, which will remain under the 7-Select name. Together, SEI expects the private brands to generate more than $1 billion in sales this year, the article states. The estimated growth comes just 12 years after 7-Eleven began its private brand business. In 2008, SEI introduced 7-Select with just 87 items, primarily food and beverage products. In 2018, SEI reported its highest operating income ever, seeing same-store sales rise by 3.4 percent driven by its fresh foods and 7-Select brand. The company now produces roughly 1,500 private brand items in total, and it was this growth that caused the company to seek to develop two primary private brands.

available during the morning hours, can be prepared on request at other times, and has a suggested retail price of $2.

LATEST SEVEN RESERVE COFFEE HAILS FROM KENYA

SEI announced that it has added another sustainability sourced coffee option to its rotating Seven Reserve portfolio: Kenya Single Estate Grown Coffee, made with Rainforest Alliance-certified beans. Hailing from the awardwinning Sasini Estates, this bold and complex coffee is cultivated on six independent family farms that have operated for generations in the foothills of Mount Kenya north of Nairobi. Hand-picked, wet-pulped and natuNEW BREAKFAST rally fermented before being “7-Eleven’s sun-dried on raised screen PIZZA new personal-size beds, the Kenyan Arabica SEI recently introduced breakfast pizza is one beans are finished with a a personal-size breakfast medium roast to enhance of the few breakfast pizza, great as a hearty the flavor that bears pizzas on the snack or meal and available distinct citrus notes morning, noon and night, the market.” and a subtle floral company announced in a rearoma. Introduced in leased statement. The 2018, Seven Reserve is 5-inch breakfast pizza a proprietary line of is one of the only perspecially curated coffees. sonal breakfast pizzas on Available at participating 7the market and has a flaky Eleven stores, Seven Reserve biscuit crust topped with creamy premium-brewed coffees are offered at white gravy, scrambled eggs, sausage crumbles, bacon, ham, and a blend of mozzarella and the same low price as all other hot beverages, cheddar cheese. This hot breakfast option is the company said.

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Monster Unveils Three New Energy Drinks Monster recently announced three new energy beverages available to 7Eleven stores for ordering. • Ultra Fiesta & Rosá—From the leader in Zero Sugar Energy, Monster Ultra introduces two new SKUs to the lineup: Ultra Fiesta and Ultra Rosá. Your customers will have double the fun without sacrificing any of the flaIncrease your energy drink sales with Monster’s new Ultra Fiesta and Rosá, vor they’ve come to know and love Java 300, and NOS Turbo. from the Monster family. • Java 300—Java Monster pioneered the Energy+Coffee category and is taking energy efficacy to the next level with Java Monster 300. Available in French Vanilla and Mocha, Java Monster 300 features a more robust coffee-forward flavor profile with 300 mg of natural caffeine (vs. 200 mg of caffeine in regular Java Monster) and is supercharged with the proprietary Java Monster Energy blend. It’s seriously strong coffee. • NOS Turbo—NOS Energy has launched its first entrant into the Performance Energy Space: NOS Turbo. Turbo has the same kick-ass NOS taste in a sugar free offering. Plus, for those ready to “GetAfterIt,” Turbo has 300mg of caffeine and BCAAs.

New Trolli Crunchy Crawlers Best In Show Introducing new Trolli Crunchy Crawlers: a dual-textural spin on Trolli’s classic sour gummi worms that deliver Trolli Crunchy Crawlers won a thin, crunchy shell and a chewy, fruity the “Best in Show” award during center. Each bag of neon candy-coated the 2019 Sweets & Snacks show.

gummi worms contains three dual-flavored pieces: Strawberry-Watermelon, Raspberry-Orange and Lime-Cherry. The Crunchy Crawlers innovation is a springboard off the success of Sour Brite Crawlers, which is growing at 4x the category. Crunchy Crawlers will accelerate category growth—sour candy is growing at 3x the category (Source: Mintel 2018 Non-Chocolate confections). Research shows that consumers are eating more nonchocolate candy because of their better textures, and sensory excitement is the largest consumer need-state. Furthermore, Crunchy Crawlers was announced the winner of the “Best in Show” award during the 2019 Sweets & Snacks show where this new innovation made its first appearance. This one-of-a-kind product has been available for first order since January 20 and will be supported during P2 with fully funded promotions running February 12 through March 31. Place your order with McLane UIN: 312037 and Coremark#: 482441.

Introducing Fairlife Creamers Created for coffee lovers and connoisseurs, Fairlife’s brand-new collection of real dairy creamers is crafted with a touch of sweetness to help enhance the coffee experience at home. Made with just five ingredients, these smooth and balanced Fairlife creamers help enrich the essence of a home brewed cup without masking the New Fairlife Creamers coffee taste. They have 40 percent available in Sweet Cream less sugar than regular coffee and Vanilla. creamer—giving just the right amount of flavor—and they are lactose free. Now available in Sweet Cream and Vanilla. Learn more at fairlife.com/creamers.

Swisher Adds Optimo Cognac Blend Optimo Cigars, a Swisher brand, continues its tradition of innovation with Optimo Cognac, a limited-edition blend that combines the rich aroma of Cognac complemented with notes of honey. This popular blend offers a smooth smoke with an elegant continued next page

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Fast-Selling YummyLix Gourmet Lollipops

finish that is encased in first-class natural leaf wrappers and delivers a oneof-a-kind smoking experience. According to consumer research, 7-Eleven and YummyLix Gourmet Lollipops have joined the alcoholic beverage blend category to generate great sales for stores. Lollipop sales have been rehas grown more than 23 percent from ported up to 5 units/day for 7-Eleven stores carrying these 2018 to 2019 among adult consumers, great-tasting treats. YummyLix Lollipops have 30+ mouth-waand it’s one of the fastest-growing blend tering flavors. One UPC for all flavors, located on the stick, categories within the natural leaf segscans great and makes setup easy at Limited Edition Optimo Cognac ment (MSAi Database: 52 weeks ending store level. Blend further expands Swisher’s December 28, 2019). The Gravity Feed Display makes natural leaf cigarillo offerings. This in-demand limited-edition merchandising a breeze. It can won’t be around for long, but is available in a variety of market- free-stand on the counter for optidriven price points to maximize sales and profits. To place an mum sales velocity, or use its magorder, contact your Swisher representative at 1-800-874-9720. For nets and other display options. more information, visit www.swisher.com Here’s how the YummyLix Gourmet Lollipop Program works: • Order a starter kit from either McLane (301837) or Coremark Make 50 percent margins and (485174). Includes a Gravity Feed great sales velocity with continued on page 72 Ocean Spray introduces two new on-the-go snacks full of flaYummyLix Gourmet Lollipops. vor and the delightful taste of dried cranberries: • Ocean Spray Cranberry Almond Snack Clusters combine crunchy almonds and sweet, chewy cranberries for a wholesome snack that’s sure to J.J. Martin Group, one of the market leaders of aloe-infused beverages and the satisfy. Customers can pop them in their mouths makers of Aloevine and Salutti aloe drinks, has created a unique, healthy and refreshas a snack or use them as a ing aloe beverage—Aloevine Organic. Beverage consumers have demonstrated their yogurt or salad topper. preference towards better for you organic and naturally sweetened/low calorie alter• Milk Chocolate Crannatives, which have been the growth in the beverage category the past few years. berry Bites—Ocean Spray has taken its signature Manufactured in the USA with USDA CertiCraisins Dried Cranberries fied Organic ingredients and Non-GMO plant and covered them in milk Based ingredients, Aloevine Organic conchocolate for a satistains nothing artificial. It’s sweetened with fying snack customers natural ingredients like agave and monk can feel good about fruit, and infused with organic aloe that is giving their whole famwater soluble. It is flavored with natural inily. They can be enjoyed gredients: lemon juice, raspberry, blueberry on-the-go, mixed into a and strawberry. The best feature of all— tasty trail mix or sprineach 16.9 oz bottle contains just 5 calories kled on top of ice cream. per bottle. Aloevine Organic is priced to sell

Ocean Spray Snack Clusters & Milk Chocolate Cranberry Bites

ALL NATURAL ALOEVINE ORGANIC

Boost your snack sales with Ocean Spray Snack Clusters and Milk Chocolate Cranberry Bites.

at a very competitive price point well below most major better-for-you beverages.

New Aloevine Organic, at a very competitive price point.

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Display and 160 Lollipops. Set it up and start selling. • Order Refill boxes from McLane (715029) or Coremark (418566) to keep the sales going year-round. PLUS: 7-Eleven stores get a rebate from 7-Eleven headquarters. The stores make a 50 percent margin at 2 for $1. It is an exceptional program. Make great margins and great sales velocity with YummyLix Gourmet Lollipops!

Fully-Funded Kellogg’s Rice Krispies Treats Dunk’d Kellogg’s Rice Krispies Treats Dunk’d is an indulgent confection bar with the irresistible combination of the classic Rice Krispies Treats dunked in either Chocolatey or Cookies ‘N’ Crème coating and offered only in convenience stores. Now available with a 2/$3 fully-funded scan deal during P2 Kellogg’s Rice Krispies Treats Dunk’d is now avail- (February 12 – March 20, 2020). able with a 2/$3 fullyfunded scan deal for P2.

NEW MolsonCoors PRODUCTS FOR 7-ELEVEN MolsonCoors has three items new to 7-Eleven stores: • MOVO Wine Spritzers are a modern take on vino, bringing fun and portability to wine. Crafted with simple ingredients, MOVO is the perfect blend of premium wine, sparkling water and real fruit juice. At only 100 calories, these effervescent drinks have a bright, refreshing taste and are 50 calories less than the leading wine spritzer. With no added sugar and gluten free, MOVO is a lively twist on wine. Comes in three flavors: Peach White Blend, Raspberry Rose, and Blood Orange Sangria. Retail start: March 30. • Vizzy is a new line of hard seltzers, made with antiox-

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idant Vitamin C from Superfruit Acerola, juice and natural flavors. Crafted with only 100 calories, certified gluten free, alcohol from real cane sugar, and a 5 percent ALC/VOL, Vizzy makes life more refreshing to enjoy. Vizzy is available in four flavors: Pineapple Mango, Black Cherry Lime, Strawberry Kiwi, Blueberry Pomegranate. Retail start: March 30. • Blue Moon Light Sky is a new light and refreshing wheat beer from Blue Moon, brewed with real tangerine peel for a lighter, exceptional taste at only 95 calories. Blue Moon Light Sky is for consumers at social occasions who are looking for lighter, above premium options with hints of citrus fruit flavors they expect from Blue Moon. Retail start: February 1.

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taxpayers expecting a refund, 10 percent say they will make a major purchase and 9 percent say they will make a “splurge purchase.” • Juul Labs said it will stop selling its fruit-flavored vaping pods in Canada, a move that could help the e-cigarette maker stave oﬀ mounting scrutiny over the surging popularity of its products with teenagers, reported Reuters. Juul has adopted a similar strategy in the U.S. where it also withdrew fruit, dessert and mint nicotine flavors from retail stores. • Walmart is attracting higher-income customers—including some who are new to the retailer—with its online grocery business, reported CNBC. The big box retailer bought Jet.com for $3.3 billion in 2016, with the hopes of winning over the e-commerce company’s customers that tended to be younger, more affluent and urban. • Sheetz once again has been named one of the 2020 Fortune 100 Best Companies to Work For, according to global research and consulting firm Great Place to Work and Fortune magazine. This list, now in its 23rd year, recognizes companies that have exceptional workplace cultures. Sheetz was ranked #80, and is the only convenience store chain on the list.

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Fairlife’s Core Power & Yup Varieties Now Available Fairlife introduces two new lines to 7-Eleven: • Core Power Protein Shakes: What makes Core Power so unique is pure, fresh Fairlife ultra-filtered milk. With 26g or 42g (in Core Power Elite) of high-quality complete protein and all 9 essential amino acids, Core Power protein shakes help build lean muscle and support healthy workout recovery. • YUP!: YUP! is more than just milk. It’s delicious ultra-filtered milk with indulgently bold flavors designed to excite the taste

Fairlife’s Core Power Protein Shakes and Yup! ultra-filtered milk.

buds of those young at heart. YUP! comes in a variety of delightfully satisfying flavors. Rich Chocolate has an irresistible rich and creamy flavor. Cookies N’ Creamiest is a bottled-up version of a classic American favorite—chocolate cookies and milk. Very Strawberry excites taste buds with its ripe, juicy strawberry taste. And, for a traditional white milk option, there’s Classic White.

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foa events Delaware Valley FOA Trade Show Caesars Atlantic City Hotel Atlantic City, New Jersey July 16, 2020 Phone: 215-771-6178

Greater Oregon FOA Golf Tournament (Venue TBD) July 16, 2020 Phone: 503-984-1398

San Diego FOA Day At The Races Del Mar Racing Del Mar, California August 28, 2020 Phone: 619-713-2411

San Francisco/ Monterey Bay FOA Golf Tournament

South Nevada/ Las Vegas FOA Table Top Trade Show

Castlewood Country Club Pleasanton, California September 13, 2020 Phone: 510-693-1492

Sierra Gold Las Vegas, Nevada October 15, 2020 Phone: 702-561-0311

San Diego FOA Vendor Appreciation Day

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA Holiday Party

Alesmith Brewery San Diego, California October 7, 2020 Phone: 619-713-2411

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA Golf Social Top Golf Chicago Naperville, Illinois October 8, 2020 Phone: 847-971-9457

Chicago O'Hare Marriott Chicago, Illinois December 2, 2020 Phone: 847-971-9457

Columbia Pacific FOA Holiday Party

Midwest FOA Michigan Holiday Party (Venue TBD) December 9, 2020 Phone: 847-971-9457

Central Florida FOA Christmas Party (Venue TBD) December 12, 2020 Phones: 207-415-0924

San Diego FOA Holiday Party Hilton San Diego/Del Mar Del Mar, California December 12, 2020 Phone: 619-713-2411

(Venue TBD) December 6, 2020 Phone: 503-998-5941

AVANTI J A N U A R Y | F E B R U A R Y 2 0 2 0

foa events Columbia Pacific FOA Trade Show Double Tree Hotel Lloyd Center Portland, Oregon March 12, 2020 Phone: 503-998-5941

Central Florida FOA Charity Golf Tournament Orange County National Golf Course Winter Garden, Florida March 30, 2020 Phone: 207-415-0924

Central Florida FOA Trade Show DoubleTree Orlando at SeaWorld Orlando, Florida March 31, 2020 Phone: 207-415-0924

FOA Of Southern California Annual Trade Show Pasadena Convention Center Pasadena, California March 31, 2020 Phone: 818-357-5985

South Nevada/ Las Vegas FOA Trade Show Alexis Park All Suite Resort Las Vegas, Nevada April 8, 2020 Phone: 702-561-0311

South Nevada/ Las Vegas FOA 2020 Golf Tournament Rhodes Ranch Golf Club Las Vegas, Nevada April 9, 2020 Phone: 702-561-0311

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA Chicago Trade Show Rosemont Convention Center Rosemont, Illinois April 15, 2020 Phone: 847-971-9457

Greater Oregon FOA Annual Trade Show Monarch Hotel Clackamas, Oregon April 21, 2020 Phone: 503-984-1398

San Francisco/ Monterey Bay FOA The Guardian Trade Show Oasis Palace Newark Newark, California April 22, 2020 Phone: 510-693-1492

Eastern Virginia FOA Annual Golf Outing Sleepy Hill Golf Club Suffolk, Virginia April 22, 2020 Phone: 757-506-5926

Eastern Virginia FOA Annual Trade Show Virginia Beach (Venue TBD) Virginia Beach, Virginia April 23, 2020 Phone: 757-506-5926

South Texas FOA Trade Show Drury Plaza Hotel San Antonio San Antonio, Texas April 28, 2020 Phone: 702-249-3301

South Texas FOA Golf Tournament Canyon Springs Golf Club San Antonio, Texas April 29, 2020 Phone: 702-249-3301

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NCASEF

Board meetings National Coalition Board of Directors Meeting Hyatt Regency Long Island Hauppauge, New York May 13-14, 2020

National Coalition Board Of Directors Meeting Gaylord National Resort & Convention Center National Harbor, Maryland August 9-10, 2020

Eastern Virginia FOA Annual Trade Show (Venue TBD) Charlotte, North Carolina May 13, 2020 Phone: 757-506-5926

Midwest FOA Michigan Trade Show (Venue TBD) May 28, 2020 Phone: 847-971-9457

San Diego FOA Charity Golf Tournament The Vineyard at Escondido Golf Club Escondido, California June 3, 2020 Phone: 619-713-2411

NCASEF 45th Annual Convention & Trade Show Gaylord National Resort & Convention Center National Harbor, Maryland August 10-13, 2020

National Coalition Affiliate Meeting Grand Hyatt Kauai Resort & Spa Koloa, Hawaii November 2, 2020

National Coalition Board of Directors Meeting Grand Hyatt Kauai Resort & Spa Koloa, Hawaii November 2-4, 2020

FOA Of Southern California Charity Golf Tournament Industry Hills Golf Club at Pacific Palms Resort City of Industry, California June 17, 2020 Phone: 818-357-5985

Columbia Pacific FOA Golf Tournament The Reserve Vineyards and Golf Club Aloha, Oregon June 22, 2020 Phone: 503-998-5941

Chesapeake Division FOA Trade Show Waterford at Springfield Springfield, Virginia June 25,2020 Phone: 571-344-2781 continued on page 73