Avanti January/February 2018

January/February 2018

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

Answering The Call For Unity “None of us is as great as all of us together.”

Bill Schuessler National Coalition Chairman, 1978

43rd Annual Convention GAYLORD PALMS ORLANDO

JULY 23-26, 2018 Page 77

National Coalition Condemns HeavyHanded Tactics, Demands Good Faith Negotiations Page 28

BUILDING FRANCHISEE UNITY: JOIN YOUR LOCAL FOA

SEI Files Trademark Infringement Claim Against NCASEF Page 51

2018: A Challenge For Franchisees The Sunoco Transaction Declining Gross Profit A Partnership Based On Need Franchisees Must Be Involved In Decision Making

PRSRT STD U.S. POSTAGE PAID Philadelphia, PA PERMIT No. 85

THE VOIC E OF 7-ELEVEN FRANC H ISEES

January/February 2018

Contents 35 2018 Will Be A Challenge For Franchisees

47 Our Vendors: A Partnership Based On Need

By Nick Bhullar, Vice Chairman, NCASEF

By Jay Singh, Chairman, NCASEF

4300

37 A Close Look At The Sunoco Transaction

By Eric H. Karp, Esq., General Counsel, NCASEF

49 Who Is To Blame For The Declining Gross Profit?

43 Franchisees Must Be Involved In Decision Making

By Romy Singh, Vice Chairman, NCASEF

National Coalition Condemns Heavy-Handed Tactics of Its Franchisor Demands Good Faith Negotiations

By Rehan Hashmi, Vice Chairman, NCASEF

December 31, 2017 Page 28

TM

EN

Member News........................16 Bits & Pieces ..................................18 Legislative Update................................20 SEI News ......................................................67 Vendor Focus ................................................71 Franchisee Calendars ................................78

PA R DE

16 NCASEF Mourns Loss Of Roger St. George 26 Midwest FOA Presents Donation To Firefighters Fund 55 California FOAs Hold Franchisee Town Hall Meeting 62 Eastern Virginia Franchisees Adapting To Changes

TS

Features

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.

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

13

NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES NATIONAL OFFICERS

Sunoco C-Stores Purchase Is A Done Deal SEI announced on January 23 that it has completed the acquisition of approximately 1,030 Sunoco convenience stores located in 17 states. e company said this acquisition is the largest in 7Eleven’s history and will bring the total number of stores to approximately 9,700 in the U.S. and Canada. e sale to 7Eleven includes a 15-year fuel supply agreement for 2 billion gallons of gasoline a year, plus an additional 500 million gallons of committed growth in the future. e deal, which was first proposed in April 2017, closed aer 7-Eleven agreed to settle Federal Trade Commission charges that its proposed acquisition from Sunoco would violate federal antitrust laws, reported the Dallas Morning News. e FTC review found

76 areas inside 20 cities mostly in Florida and Texas where competition would be harmed if stores that sell gasoline had the same owner. 7-Eleven agreed to sell 26 stores to Sunoco and Sunoco had to keep 33 stores that otherwise would have been included in the sale to 7-Eleven.

Jatinder Singh NATIONAL CHAIRMAN

702-249-3301 • jays@ncasef.com

Michael Jorgensen EXECUTIVE VICE CHAIRMAN

347-251-1828 • mcjorg@yahoo.com

Nick Bhullar VICE CHAIRMAN

626-255-8555 • bhullar711@yahoo.com

Rehan Hashmi VICE CHAIRMAN

847-845-8477 • rehan711@yahoo.com

DePinto’s Vision Of Convenience Retailing’s Future SEI CEO Joe DePinto sees the future of convenience retailing as “click-andcollect, on-demand delivery, frictionless payment, the now factor,” reveals Convenience Store News. DePinto rejects the idea that brick-and-mortar retail is dying, and believes the “golden ticket” lies in uniting brick-and-mortar with continued on page 18

Romy Singh VICE CHAIRMAN

757-506-5926 • evafoa@gmail.com CONVENTION CHAIRPERSON

520-577-8711 nationaloffice@ncasef.com

Jaspreet Dhillon TREASURER

310-892-2106 • jaspakam@gmail.com

Eric H. Karp, Esq. GENERAL COUNSEL

617-423-7250 • ekarp@wkwrlaw.com

John Riggio MEETING/TRADE SHOW COORDINATOR

262-275-3086 • jrpinc@charter.net

Sheldon Smith AVANTI PUBLISHER ADVERTISING MANAGER

NCASEF Mourns Loss Of Roger St. George NCASEF officers and members join the franchisee community in mourning the loss of a dear friend and colleague, Roger St. George. Roger passed away on January 26, 2018 at University of Washington Medical Center with his children by his side. He was 67 years old.

Roger purchased his first store in the early 1980s, and went on to franchise a total of three 7-Elevens in Aberdeen, Washington.

He served his local franchisee community as president of the Pacific Northwest FOA for many years, and most recently as vice president. He also served as a vice chairman and executive vice chairman of the National Coalition for more than 10 years. Roger wrote over 50 articles for Avanti, and is Avanti’s most prolific columnist. We shall miss his wit, his humor and his intelligence.

The NCASEF would like to extend its sincerest condolences to Roger’s family and friends. The franchisee community will remember him fondly, and miss him dearly.

16

AVAN T I J A N U A R Y | F E B R U A R Y 2 0 1 8

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

Sheldon Smith P U BL IS HER & A DVE RTIS IN G SA LE S 2 15 7 5 0- 01 78 S H E LDO N. S M ITH 5 @VE RI ZO N.N E T

John Santiago A S S IS TA N T E DI TO R 2 1 5 7 50 - 017 8 AVA N TIM AG @V E RIZO N.N E T

The Voice of 7-Eleven Franchisees January/February 2018 ©2018 National Coalition of Associations of 7-Eleven Franchisees Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.

Visit the NCASEF Website www.ncasef.com

continued from page 16

“e 7-Eleven of the future may be a customer walking into a 7-Eleven store with their phone, picking up three or four items, scanning the barcodes, hitting pay and walking out.” digital. He told the trade publication that he imagines one convenience experience of the future being a customer walking into a 7-Eleven store with their phone, picking up three or four items, scanning the barcodes, hitting pay and walking out. e article states that, as the largest convenience store retailer in the nation, 7-Eleven is uniquely positioned to marry the brick-and-mortar world to the digital world, as per DePinto’s vision.

More Than 20,000 7-Eleven Stores “Seven & I In Japan Holdings

7-Eleven has become the first retailer to open more than 20,000 stores in Japan, with the Seven & I Holdings unit reporting a store count of 20,033 at the end of January, reported BrandingInAsia.com. e chain attributes this to its increased offering of ready-

reported a total store count of 20,033 7-Elevens in Japan at the end of January.”

made packaged dishes and frozen foods, making it an attractive alternative to supermarkets.

7-Eleven first debuted in Tokyo’s Toyosu district in May 1974 and grew to 10,000 stores by August 2003, followed by growth to 15,000 outlets in February 2013. e convenience stores have a presence in all of Japan’s 47 prefectures with the exception of Okinawa, where locations are set to open next year. Revenue for the chain for the year ended February last year totaled ¥4.51 trillion (US$41 billion), nearly double the sales in the year ended February 2004, when it crossed the 10,000-store mark. Average daily sales per store reached ¥657,000 last fiscal year, a 2 percent gain.

7-Eleven On Entrepreneur’s Franchise 500 7-Eleven has ranked #2 on Entrepreneur Magazine’s 2018 Franchise 500 list. Criteria for making it onto the list include cost and fees, size and growth, franchisor support, brand strength, and financial strength and stability. While 7Eleven was knocked off from its no.

1 spot on the 2017 Franchise 500, continued on page 24

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.

18

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

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

Influential tech analyst Gene Munster predicts that Amazon.com will acquire big-box retailer Target Corp. in 2018, reported Bloomberg. Munster said, “Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count.” • Casey’s General Stores, under pressure from activist investor JCP Investment Management, recently submitted an initial bid for Kroger’s roughly $2 billion convenience-store business, reported CNBC. • In as few as five to seven years, 70 percent of consumers will be grocery shopping online, according to new research by the Food Marketing Institute and Nielsen. The estimated $100 billion spend will occur by 2022 or 2024.

• Through placement of items and signage, test results showed that moving better-for-you options to the checkout area—and calling attention to their healthy attributes—can increase sales of these items, according to two case studies developed by the National Association of Convenience Stores. • Starbucks is experimenting with only accepting payment via credit/debit cards or smartphone apps at a posh location in downtown Seattle, reported the Seattle Times. The company did not indicate whether it will be expanded to other locations. • The U.S. Secret Service is warning banks across the country about a new means of robbing ATMs called “jackpotting,” reported ABC News. The attack works just like it sounds—an ATM is compromised to spit out cash to a fraudster at a rate of 40 bills every 23 seconds until the machine has been emptied of money. • Alimentation Couche-Tard recently announced new full-service franchise opportunities with its Circle K brand in Canada.The expansion marks the first time the Circle K brand will be franchised in Canada, with the offer initially targeting the Ontario province. • Toyota and Pizza Hut have forged a global partnership to explore self-driving delivery vehicles and other initiatives to improve mobility around the world. • Supermarket operator Albertsons plans to buy the rest of Rite Aid Corp not being sold to Walgreens, reported Reuters. continued on page 48

Visit the NCASEF Website www.ncasef.com

Legislative Update 18 States Hike Minimum Wage On January 1 Eighteen states began the new year with higher minimum wages, according to the National Conference of State Legislatures. Eight states (Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota) automatically increased their rates based on the cost of living, while ten states (Arizona, California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, Vermont and Washington) increased their rates due to previously approved legislation or ballot initiatives. ere are now 29 states that have laws mandating higher pay than the $7.25 federal minimum wage, which has not changed since 2009, reported Fortune. In 2017, 19 states began the year with wage increases—five states did so based on ballot measures and seven states raised pay based on legislation passed in prior sessions.

Twenty cities have also increased wages in the new year.

In 13 cities—including the most expensive places to live in like New York City, Washington, D.C., and many California cities—the minimum wage is already $12 or higher. Most of the 2018 increases however, are tied to inflation and will result in only minor benefits for workers. By 2022, 17 percent of Americans will live in a city or state with a $15 minimum wage.

Proposal To Cut Food Stamps e Trump administration has proposed replacing a portion of the federal food stamp program with actual boxes of food delivered to recipients’ front doors, reported CNBC. e

2018 Minimum Wage By State State . . . . . . . . . . . . . . . .Minimum Wage Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Alabama . . . . . . . . . . . . . . . . . . . . . . . . . .none Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . .$8.25 Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . .$9.84 Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Arizona . . . . . . . . . . . . . . . . . . . . . . . . . .$10.50 Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . .$8.50 Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 California . . . . . . . . . . . . . . . . . . . . . . . .$11.00 Kentucky . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Colorado . . . . . . . . . . . . . . . . . . . . . . . .$10.20 Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . .none Connecticut . . . . . . . . . . . . . . . . . . . . .$10.10 Maine . . . . . . . . . . . . . . . . . . . . . . . . . . .$10.00 Delaware . . . . . . . . . . . . . . . . . . . . . . . . .$8.25 Maryland . . . . . . . . . . . . . . . . . . . . . . . . .$9.25 D.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$12.50 Massachusetts . . . . . . . . . . . . . . . . . .$11.00 Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . .$8.25 Michigan . . . . . . . . . . . . . . . . . . . . . . . . .$9.25 Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . .$5.15 Minnesota . . . . . . . . . . . . . . . . . . . . . . . .$9.65 Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . .$10.10 Mississippi . . . . . . . . . . . . . . . . . . . . . . . .none

20

AVAN T I J A N U A R Y | F E B R U A R Y 2 0 1 8

White House said the new boxes would go to households qualifying for $90 or more per month in food stamps, representing about 81 percent of those participating in what is formally known as the Supplemental Nutrition Assistance Program. Currently, SNAP recipients can choose what they spend the money on while shopping at any approved retailer.

According to a summary of the proposal, the boxes would replace about half of the current program’s cash benefits. All food would be grown domestically and include “shelf-stable” items such as juice, pasta, canned meat and beans. e USDA estimated it would save $129 billion over a decade, driven in part by the government’s unique purchasing power.

But the proposal drew swi opposition from many fronts, including the $840 billion supermarket industry, where food stamps drive 7.5 percent of sales, according to Customer Growth Partners. e firm estimated that Wal-Mart alone “Proposals to rereaps more than one-fih of all place the federal food stamp sales. Critics also food stamp prosaid the program would be inefgram with boxes ficient and costly, and would of actual food end up reducing benefits for low-income families and comdrew opposition munities. on retail fronts.” continued on page 22

Missouri . . . . . . . . . . . . . . . . . . . . . . . . . .$7.85 Montana . . . . . . . . . . . . . . . . . . . . . . . . . .$8.30 Nebraska . . . . . . . . . . . . . . . . . . . . . . . . .$9.00 Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . .$8.25 New Hampshire . . . . .repealed by HB 133 New Jersey . . . . . . . . . . . . . . . . . . . . . . .$8.60 New Mexico . . . . . . . . . . . . . . . . . . . . . .$7.50 New York . . . . . . . . . . . . . . . . . . . . . . . .$10.40 North Carolina . . . . . . . . . . . . . . . . . . . .$7.25 North Dakota . . . . . . . . . . . . . . . . . . . . .$7.25 Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$8.30 Oklahoma . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Oregon . . . . . . . . . . . . . . . . . . . . . . . . . .$10.25

Pennsylvania . . . . . . . . . . . . . . . . . . . . .$7.25 Rhode Island . . . . . . . . . . . . . . . . . . . .$10.10 South Carolina . . . . . . . . . . . . . . . . . . . .none South Dakota . . . . . . . . . . . . . . . . . . . . .$8.85 Tennessee . . . . . . . . . . . . . . . . . . . . . . . . .none Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Vermont . . . . . . . . . . . . . . . . . . . . . . . . .$10.50 Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Washington . . . . . . . . . . . . . . . . . . . . .$11.50 West Virginia . . . . . . . . . . . . . . . . . . . . .$8.75 Wisconsin . . . . . . . . . . . . . . . . . . . . . . . .$7.25 Wyoming . . . . . . . . . . . . . . . . . . . . . . . . .$5.15

Visit the NCASEF Website www.ncasef.com continued from page 20

Legislative Update Maryland Paid Sick Leave Law Begins Maryland’s new sick leave policy has gone into effect, reported WJZ-CBS Baltimore. is law requires businesses to provide five days of sick leave for full-time employees. It applies to businesses with at least 15 employees, providing one hour of paid sick leave for every 30 hours worked, and businesses with fewer than 15 employees get unpaid job protective leave, which also applies to part-time workers. Paid sick leave needs to be used within a calendar year and cannot “NJ COULD BECOME THE FIRST be carried over. While most Maryland employSTATE IN THE COUNTRY TO ers provide paid sick

BAN THE SALE OF MENTHOL CIGARETTES.”

leave, analysts estimated about 700,000 people didn’t have the benefit, which this law will now change.

Supporters have been fighting to pass Maryland’s paid sick leave policy for six years. It passed last year, but was immediately vetoed by Governor Larry Hogan. Earlier this year, the House voted to override that veto. en the final hurdle; the Senate voted to delay it until July, but that delay didn’t make it past the House.

New Jersey Bill Would Ban Menthol Cigarettes Opponents of a New Jersey bill to ban the sale of menthol cigarettes say small businesses in the state would lose more than a quarter of their annual sales if it becomes a law, but lawmakers argued that a prohibition could reduce the prevalence

Visit the NCASEF Website www.ncasef.com continued from previous page

of nicotine addiction and cancer in the state, reported NorthJersey.com. New Jersey would be the first state in the nation to have a ban on the sale of menthol cigarettes, should the bill (A2185) become law, lawmakers said at the committee hearing. Last summer, San Francisco became the first city in the country to ban the product. e proposed legislation would amend the current law, which prohibits the sale of flavored cigarettes. e bill is headed to the Assembly Appropriations Committee for review.

Maine’s SNAP Petition Rejected For the second time in less than two years, the U.S. Department of Agriculture has denied a request by Maine Governor Paul LePage to ban food stamp recipients in the state from using their benefits to buy sugary drinks and candy, reported

the Press Herald. In a January 16 letter to the commissioner of the Maine Department of Health and Human Services, the USDA outlined concerns that a ban would increase administrative costs; impose burdens on small businesses and retailers; choose winners and losers in the food industry; create difficult decisions about the nutritional values of allowable or excluded foods; and “restrict what individuals could eat in their own homes without demonstrating clear evidence of meaningful health outcomes.” e governor’s spokeswoman said the administration would “revise our waiver request and resubmit it,” but she did not offer a timeline or specifics about what those revisions might be. Many other states, mostly led by Republican governors, have requested similar waivers and all have been denied. continued on page 58

Visit the NCASEF Website www.ncasef.com continued from page 18

the company’s growth is absurd, according to Entrepreneur: SEI had 3,336 new units in 2017—more units than three of the companies on this list have in total.

McDonald’s took the #1 spot on the list, while Dunkin’ Donuts came in at #3.

Amazon’s C-Store Finally Launches Amazon’s cashierless convenience store, Amazon Go, opened its doors to the public on January 22, a debut that followed a nearly 14-month trial run open only to the Seattle company’s employees, reported the Seattle Times. e store requires customers to scan their smartphone on the way in, tracks them with cameras and other sensors as they browse, and, when they take an item off the shelf, adds it to a virtual cart. Groceries are charged to the customer’s Amazon account when they leave with their goods. e concept, which Amazon has termed “Just Walk Out” shopping, sparked speculation that Amazon could use its high-tech concept as a beachhead to expand into convenience stores or perhaps other categories of physical retail. More recently, Recode has reported that Amazon plans to open as many as six more of these storefronts this year. Citing multiple people familiar with the company’s plan, Recode stated some of the Amazon Go stores are likely to open in Seattle, as well as Los Angeles. It’s not clear, however, if

Amazon will open up Go stores in any other cities this year.

C-Stores Continue To Grow e U.S. convenience store count increased to a record 154,958 stores as of December 31, 2017, a 0.3 percent increase (423 stores) from the year prior, according to the 2018 NACS/Nielsen Convenience Industry Store Count. e number of c-stores is significantly higher than other channels of trade, accounting for more than one third (34.4 percent) of the brick-and-mortar retail universe tracked by Nielsen in the United States.

Single-store operators within the convenience retail space also increased by 139 units (0.14 percent), up from 97,504 stores at year-end 2016 to 97,643 stores at year-end 2017. Overall, 79.1 percent of convenience stores (122,552) sell motor fuels, a decrease of 1.0 percent (or 1,255 stores) from 2016, with the single-store motor fuel segment dropping by 1,025 stores. e decline in the number of c-stores selling fuel is reflective of retailers evolving their business models to focus more on the in-store, foodservice offer, as well as retailers embracing new store formats and establishing their brands in more urban, walk-up locations, the report states.

“Amazon’s autonomous c-store launched amid fanfare over it’s lack of employees and use of smart phone checkout.”

Among the states, Texas continues to lead in store count at 15,813 stores, or more than one in 10 stores in the country.

California is second at 11,946 stores, followed by Florida (9,891), New York (8,725), Georgia (6,687), North Carolina (6,235), Ohio (5,686), Michigan (4,962), Pennsylvania (4, 855) and Illinois (4,759). e bottom three states in terms of store count are Alaska (217 stores), Wyoming (355) and Delaware (344).

‘Oh Thank Heaven For 7-Eleven’ Creator Dies Daniel Patrick McCurdy Sr., co-creator of the “Oh ank Heaven for 7-Eleven” advertising campaign, passed away on February 8 at age 76, reported the Abilene Reporter-News. McCurdy, a member of the Texas Radio Hall of Fame, died from complications following surgery. In 1967, he joined the company that handled advertising for the Southland Corp., owners of 7-Eleven.

With the advertising agency, he helped create jingles and slogans for the convenience store chain and its new drink, the Slurpee. McCurdy later was named special projects manager for the Southland Corp. and then became vice president of corporate communication. Later, he became creative director for Town and Country Food Stores, which was headquartered in San Angelo before being purchased by Stripes.

Kroger Sells Its C-Stores To UK’s EG Group Kroger will sell nearly 800 convenience stores to British gas station operator EG Group for $2.15 billion, as the supermarket chain focuses on its mainstay grocery continued on page 26

24

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

Visit the NCASEF Website www.ncasef.com continued from page 24

“Presidents and vice presidents of all 44 FOAs in the National Coalition chose not to attend the corporate’s 7-Eleven Experience tradeshow.”

business amid a brutal price war, reported CNBC. Kroger plans to use proceeds from the sale to buy back shares and lower debt. e sale is part of Cincinnati-based Kroger’s “Re-stock” plan that aims to revamp its nearly 2,800 brick-andmortar supermarkets, cut prices and boost in-store technology. Kroger is also investing in online channels amid stiff competition from chief rival Walmart, discounters Lidl and Aldi, and Whole Foods, which is owned by Amazon.com. e company’s supermarket fuel centers and Turkey Hill Dairy are not part of the sale.

Franchisee Leaders Skip 7-Eleven Experience As SEI celebrated at its annual trade show in Las Vegas on February 14 and 15, the presidents of all 44 Franchise Owners Associations (FOAs) that comprise the leadership of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) skipped the event. “Our FOA representatives spoke and the Coalition listened, voting to urge members stay away from the 7-Eleven Experience,” said Michael Jorgensen, Executive Vice Chairman of the National Coalition. “e relationship between SEI and its franchisees

is no longer evenhanded and that is hurting the livelihood of those we represent.”

In a released statement, the NCASEF said the numbers tell the story of a relationship tilted against the franchisees, and claims SEI has “unveiled the makings of a new franchise agreement that imposes an even more regressive royalty, penalizing franchisees for increasing sales.” “In order to keep in the spirit of celebrating franchisees, as SEI advertises in the brochures for the 7-Eleven Experience, they must recognize our concerns and work with the elected franchisee representatives to construct the framework for a future all franchisees can celebrate,” said Jorgensen.

“Many franchisees, aer seeing their January financial statements, don’t have much cause to celebrate.”

ICE Agents Target 7-Eleven Stores Nationwide U.S. Immigration and Customs Enforcement agents blitzed dozens of 7-

Eleven stores before dawn on January 10 to interview employees and deliver audit notifications, carrying out what the agency said was the largest operation targeting an employer since President Trump took office, reported the Washington Post. ICE said its agents showed up at 98 stores and made 21 arrests, describing the operation as a warning to other companies who may have unauthorized workers on their payroll. During its sweeps, ICE agents temporarily shut down 7-Eleven stores in Washington, D.C., and 17 states: California, Colorado, Delaware, Florida, Illinois, Indiana, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas and Washington. ICE described the action as a follow-up enforcement operation that built on a 2013 raid resulting in the arrests of nine 7-Eleven franchise owners and managers. e U.S. Citizenship and Immigration Services department is offering free seminars on its website for employers who want to learn how to use E-Verify to confirm a job applicant’s immigration status. Visit https://www.uscis.gov/everify/e-verify-webinars/take-free-webinar for more information. continued on page 50

MIDWEST FOA PRESENTS DONATION TO FIREFIGHTERS FUND The Midwest FOA's Vice President Nisar Siddiqui (pictured left) presents $711 to Lt. Peter Hullinger of the Troy Firefighters Community Fund. Nisar focuses on community outreach within Michigan, and with his dedication to supporting fellow business owners in the state, the Midwest FOA has been able to support many charitable organizations. The FOA said it is thankful for Nisar's support and involvement in his community.

26

AVAN T I J A N U A R Y | F E B R U A R Y 2 0 1 8

Visit the NCASEF Website www.ncasef.com

From the NCASEF National Office:

National Coalition Condemns Heavy-Handed Tactics of Its Franchisor Demands Good Faith Negotiations to Develop a Fair, Balanced and Equitable Renewal Agreement NCASEF Officers Explain e Reasons Behind e Lawsuit National Coalition, December 31, 2017 On October 12, 2017, a 54 page class-action complaint was filed in the United States District Court for the Central District of California, Western Division, alleging that 7-Eleven, Inc. (SEI) is in violation of the Federal Labor Standards Act and California employment laws in connection with its administration of this convenience store system. e docket number is 2:17-CV-7454. e complaint seeks money damages, restitution and other relief. e central basis of the complaint is that while SEI promises to treat franchisees as independent contractors, they in fact do the exact opposite, treating franchisees as employees. Over time, SEI has been gradually chipping away at the profits of franchisees, increasing their costs, exercising more and more control over what is supposed to be an independently operated convenience store, where franchisees actually control the manner and the means of the operation of the location.

Aer an unsuccessful attempt to slow the progress of the case down, SEI has responded to the complaint in court, but outside of the legal proceedings, it has also responded in two separate and highly problematical ways.

First, SEI suspended all communications and meetings with each of the franchisee organizations within the system, including the National Business Leadership Council, the CEO Roundtable, and the National Coalition. In response to this disappointing and petulant action by SEI, the National Coalition voted to urge its members to skip the upcoming February 2018 7-Eleven Experience.

Second, without consulting any of the long-standing franchisee organizations, SEI more recently organized and executed a series of so-called Town Hall Meetings, pointing out to the franchisees that 80% of all franchise agreements will expire between 2019 and 2024.

SEI then laid out a series of heavy-handed ultimatums to franchisees as a way of trying to outflank the potential massive liability of the California lawsuit, leveraging the fact that some franchisees have franchise agreements with a 50-50 gross profit split and others have a graduated gross profit split (GGPS). e core of these ultimatums is that SEI will double down on the existing GGPS, which even in its current form is virtually unprecedented within convenience store franchising in particular, and franchising in general.

SEI’s central message is that if you don’t accept one of their hollow proposals, then you will eventually end up with a graduated gross profit 28

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

split that is much worse for franchisees with gross profit of $500,000 or more than the one that is currently in operation and which has generated so much controversy and unhappiness because it does not incentivize growth. We are calling this GGPS on Steroids or “GGP-SOS”.

Disturbingly but unsurprisingly, SEI has not been transparent in providing detailed analysis of the combined effects of GGP-SOS, the proposed flattening of the advertising fee to 1% across the board, increased renewal fees and the incremental expense to franchisees of the outsourcing of payroll (a replay of what happened with equipment maintenance—and franchisees don’t need to be reminded of how that negatively affected their bottom line!). We know SEI has crunched these numbers, but as is typical for this franchisor, they are treating the results with the same degree of obsessive secrecy that they apply to their relationships with the supply chain.

SEI had repeatedly assured the members of the Franchise Agreement Committee that their objective in creating a new contract was to grow the pie for both franchisor and franchisee, and assuredly not to grab a larger slice of the pie for itself. Unfortunately, this proposal fails to keep that commitment, because it has materially negative effects for franchisees at all levels of gross profit.

However, here is our preliminary best analysis of the yearly net economic loss to franchisees with gross profit of $500,000 or more, based on the information provided so far, taking into account the change in the ad fee and cost of outside payroll processing:

Gross Profit $500,000 $600,000 $700,000 800,000 $900,000 $1 million

50/50 to GGP-SOS $3,900 $11,400 $19,400 $27,900 $36,400 $43,900

Current GGPS to GGP-SOS $3,400 $5,900 $8,900 $11,900 $14,400 $15,900

ese numbers do not take into account the elevated labor and write-offs associated with fresh foods and hot foods. For more than two years, we have been requesting that SEI provide evidence that fresh foods and hot foods are good for the bottom line. As we all know, franchisees—just like SEI—live off the bottom line. We are still waiting. ese numbers also do not take into account the elevated renewal continued on page 30

Visit the NCASEF Website www.ncasef.com continued from page 28

fees proposed by SEI. If you signed an agreement between 2004 and 2006, you have no renewal fee. If you signed the 2010 or later franchise agreement, your renewal fee is based on a graduated scale. SEI’s new proposal fee would increase by $23,750 for a store with $500,000 of gross profit and by $13,750 for a store with $700,000 gross profit.

gross margin performance of company stores also declined from 31.48% in 2012 to 28.87% in 2016. Moreover, based upon disclosures of SEI’s publicly held parent company, the gross profit margin of all U.S. stores fell from 34.9% for the six months ended June 30, 2016 to 34.4% for the six months ended June 30, 2017.

If you have a store with less than $500,000 of gross profit, GGPSOS contains a modest break by giving those franchisees a slightly higher share of gross profit. However this modest benefit is at least partially offset by an increase in advertising fees to 1% (franchisees gross with profit of less than $300,000 currently pay 1/2 of 1%), the cost of outsourced payroll and elimination of both the Assured Gross Income Support and Gross Income Support programs. us, the claimed benefits to lower volume stores are largely illusory.

Analysis

If You Have a 2004 Agreement For the limited number of franchisees that have a 50-50 gross profit split, SEI is basically giving you a five-year extension, no rights to renew thereaer, during which you must exit the system by selling your store or selling it back to SEI for an amount which they are predictably keeping secret. Alternatively, you must sign a 15 year agreement, converting to the current GGPS until 2030 (which presumably means until December 31, 2029), or for approximately 11.5 years starting next spring, following which you will be subject to the elevated GGP-SOS rolled out at the Town Hall Meetings.

If You Have a 2006 or 2010 Franchise Agreement ese franchisees have the option to sign a 15 year 2019 agreement and remain on the current GGPS until 2030, but only if they lock in GGP-SOS, which will become effective aer December 31, 2029.

Other Representations by SEI SEI apparently claimed in these Town Hall Meetings that it invests 90% of its earnings back into the system. Where is the proof for this representation? SEI has spent, and has plans to spend, billions of dollars on acquisitions, chiefly of gasoline assets. And many of the so-called investments are those which primarily benefit SEI, such as the DVR system. For years, the National Coalition has tried to get SEI to disclose how much money it has spent and how much money it will commit to spending on the remodeling, refurbishing, and updating of franchise locations. What does SEI have to hide?

SEI also announced that the 2019 agreement will drop the minimum Net Worth requirement for a store from $15,000 to $10,000 for a franchisee’s first store and to $5,000 for each additional store.

While it might seem that this proposal would free up more dollars for franchisee draw, it actually has the apparent purpose of masking troubling trends in store level profitability. According to the Audited Financial Statements of SEI, the gross margin achieved by SEI franchised locations throughout the United States fell from 36.24% in 2012 to 36.06% in 2013, to 35.8% in 2014, to 35.68% in 2015. e 30

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

What these proposals have in common is that they give all existing franchisees the right to extend whatever their current gross profit split is until December 31, 2029. ere is some very limited and modest relief for low volume stores. SEI intends to roll these proposals out in the spring of 2018 and induce franchisees, out of fear of the consequences of GGP-SOS, to sign up thereaer. Of course, what SEI is most aer is securing each franchisee’s signature on a release of claims which will reduce the potential damages in the California lawsuit or in any lawsuit that might be brought in any other state on the same basis.

We have two major responses to SEI: First, please come clean and give every franchisee in the system a detailed analysis of how all of the moving parts in this proposal will affect their overall bottom line. is includes not only the effects of GGP-SOS whenever it kicks in, but also all the other financial changes as outlined above. What are the incremental costs of fresh foods and hot foods? How much capital will SEI commit to improving franchised stores? Only with that detailed analysis can any franchisee make an intelligent decision about what to do next.

Second, to the extent that SEI is forgoing its apparent plan to otherwise implement GGP-SOS on an ongoing basis, except to the extent of newly developed stores which will be subject to GGP-SOS from the outset, this does represent SEI’s attempt to create the appearance of a financial concession by SEI for the limited period of time between now and December 31, 2029. e problem is that SEI steadfastly, indeed stubbornly refuses to sit down with elected franchisee representatives and hammer out a logical, fair, and balanced renewal franchise agreement.

In other words, this is SEI’s opening bid; do not succumb to these scare tactics. Your franchisee leaders are working hard to get a better deal. Please support your FOAs and when SEI comes calling, don’t accept their platitudes, just demand that they answer our questions and come to the bargaining table.

National Coalition Leaders: Jay Singh, Chairman Michael Jorgenson, Executive Vice Chairman Nick Bhullar, Vice Chairman Romy Singh, Vice Chairman Rehan Hashmi, Vice Chairman Jas Dhillon, Treasurer

2018 Will Be A Challenge For Franchisees

BY JAY SINGH, CHAIRMAN, NCASEF

The National Coalition and its 7Eleven franchisee members are between a rock and a hard place. The job market is tight, minimum wage is going up, and unemployment is at its lowest in 17 years.

On top of all this, immigration policies by the current administration have raised political issues and public debates, causing a decrease in the number of immigrants looking for jobs in our stores.

At the same time, franchisees on the home front are struggling with the rollout of the 2019 Franchise Agreement, higher maintenance costs, the graduated gross profit split, gas commissions, merchandise promos and competition from our own stores. All of this affects the bottom line of the franchisees, and it is hard to survive. January financials and franchisee income speaks for itself.

It’s a simple fact that today American businesses can’t find enough workers. A recent Federal Reserve survey released in February found labor shortages all over the country. Businesses have no choice but to raise wages to attract and keep good workers, a sure sign that wages are growing. The average 7-Eleven franchisee pays store associates well above minimum wage, even after the most current wage hikes, except in areas like Seattle where the highest minimum wage has reached $15. Competition for workers is fierce, because many retail employers are willing to boost wages to retain or acquire new workers.

A U.S. Labor Department report released February 2 said the U.S. economy added 200,000 jobs in January, and wages have been rising at JAY SINGH the fastest pace CAN BE REACHED AT since the Great Re702-249-3301 OR JAYS@NCASEF.COM cession. All the

while unemployment is at a 17-year low of 4.1 percent. Average hourly earnings rose 2.9 percent in 2017, and could go above 3 percent growth year over year in 2018.

U.S. immigration levels haven’t changed radically over the last five years, yet the U.S. unemployment rate has continued to plummet, approaching a 50year low. Goldman Sachs predicts the

unemployment rate will fall to 3.5 percent by the end of 2019 (it was over 9 percent in 2011), as the administration gives mixed signals on immigration as both a

the way as cost of living in cities continues to rise faster than pay. The same article predicted that by 2022, 17 percent of Americans will live in a city or state with a $15 minimum wage.

That date is not very far away, and when we consider that the 7-Eleven system is changing, with more lower volume stores and more multiple store owners, we can see a great risk for these storeowners in the future.

Our franchisor desires to have 20,000 stores in the U.S. in the next ten years, and this desire is driving a change in the franchisee model to the multiple-store franchisee and the Graduated Gross Profit Split, where higher volume stores subsidize the profits of lower volume stores.

The new franchisee today makes in three stores what one good store might have yielded just 10 years ago.

The payoff for our franchisor is huge.

Store growth can continue, and new franchisees can buy in and try their hands at making money, while existing franchisees struggle with the

“The new year will actually bring minimum wage increases for workers in 18 U.S. states and 20 American cities.” valuable resource and a major challenge.

The new year will actually bring minimum wage increases for workers in 18 U.S. states and 20 American cities. A recent Fortune Magazine article said the impact of $15 per hour on employment levels is small, causing more state and local governments to raise minimum wages above the federal minimum. In 2017, 19 states began the year with wage increases, but it is cities that are leading

changing landscape. So times are tough. We must all stay united for the right cause. If you are not an FOA member, join your local organization to support unity among franchisees and have your rights represented nationally on the National Coalition Board.

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

35

A Close Look At The Sunoco Transaction ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

On January 23, 2018, SEI announced it had closed on the acquisition of 1,030 Sunoco convenience stores located in 17 states. At $3.3 billion in cash, this was the largest acquisition in the history of the company, growing its United States and Canada store count to 9,700 locations. SEI now has about 4,300 gasoline stores, about 45 percent of the total.

The backdrop for this transaction is illustrated by the latest financial disclosures of SEI’s Japanese parent company. For the nine months ended September 30, 2017, revenue from gasoline sales increased by 29.7 percent over the same period the year before. And the revenue generated by retail sales at both corporate and franchise stores exceeded gasoline revenue by only ¥40,000. Moreover, SEI’s margin on retail gasoline sales continues to rise. For the same nine-month period ended September 30, 2017, gallons sold increased by 9 percent, but sales in U.S. dollars increased by 25.8 percent. Also, the cents per gallon margin rose from 20.36 cents to 22.8 cents, or an increase of 2.44 cents per gallon of gross profit. All of this, before the Sunoco transaction.

Last fall, the transaction hit a bump in the road when the holders of $1.6 billion of bonds in Sunoco balked at the transaction.

That hurdle seems to have been overcome.

The Sunoco acquisition required the approval of the United States Federal

Trade Commission in order to ensure that the transaction would be in the public interest. On January 18, 2018, the FTC filed a complaint against SEI, Sunoco and SEI’s parent corporation alleging that the transaction would have anticompetitive effects that could harm consumers. What the FTC was really saying was that to the extent SEI was concentrating its market power for gasoline, it would be acquiring the ability to raise prices because of a lack of

effective competition. This is particularly ironic given the allegation by franchisees that SEI has been deliberately overpricing gasoline, sacrificing instore retail sales and its gross profit split. More information can be found at https://www.ftc.gov/news-events/pressreleases/2018/01/ftc-requires-divestiturescondition-7-eleven-inc-parent-companys.

“At $3.3 billion in cash, the Sunoco acquisition is the largest in 7-Eleven’s history, growing the U.S. and Canada store count to 9,700 locations.”

“SEI now has about 4,300 gasoline stores, about 45 percent of the total.”

4300 In its complaint, the FTC alleged that (a) the transaction would create a monopoly in 18 markets; (b) in 39 markets, the transaction would reduce the number of independent market participants from 3 to 2; (c) in 19 local markets, the transaction would reduce the number of independent market participants from 4 to 3; and (d) the acquisition would result in 76 highly concentrated markets in Boston, New York (Buffalo), Florida (Daytona Beach, Fort Meyers, Venice and Tampa), Virginia (Richmond), Texas (Corpus Christi, Killeeen, Laredo, Mission, San Antonio, Roma and Victoria), Pennsylvania (Gettysburg and Pittsburgh), and the District of Columbia.

The allegations by the FTC were in fact supported by SEI’s parent company public filings. Included in its filings made on January 11, 2018 was a statement that SEI intended to prove the store base and that the acquisition of the Sunoco stores was intended to “advance the market concentration strategy.” See http://www.7andi.com/en/ir/library/ks/ 201802.html.

Under a Consent Agreement, SEI agreed to sell 26 retail fuel outlets that it continued on page 38

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

37

A Close Look At The Sunoco Transaction continued from page 37

owns to Sunoco and Sunoco will retain 33 of the outlets that would otherwise have been sold to SEI. These outlets will be converted from Sunoco branded locations to independent operators. Firewalls will also be put in place to prevent SEI and Sunoco from collaborating on retail pricing strategies in the future, and for a period of 10 years SEI must notify the FTC of any plans to acquire additional gasoline outlets in any one of the 76 markets identified by the FTC in its complaint.

As for the 1,030 Sunoco of locations acquired with FTC approval, SEI’s parent company has disclosed its three-year strategy. These plans have a number of elements.

• Gasoline Sales. Given that those locations generate substantially more gasoline sales than typical 7-Eleven gasoline stores, the plan is to maintain gasoline sales of 5,500 gallons for the duration of the three-year post transaction period. Zero growth in gasoline sales is planned.

“The Sunoco transaction represents a longterm commitment to the gasoline business, many would say, at the expense of traditional merchandise sales.”

expenditures in existing stores, which for the first nine months of 2017 was significantly below the levels in the previous year.

• Franchising. According to the publicly announced plans of SEI’s parent, there will be no franchising of any of the Sunoco stores during the three years following the acquisition.

Of course, the significance of the Sunoco transaction goes beyond its size and scale. It represents a long-term commitment to the 34.9 percent for the same gasoline business, many would period the year before. The say, at the expense of tradi4300 plan is to raise that gross tional merchandise sales. This margin to 34.5 percent in the transaction, along with many othfirst year, 34.6 percent in the secers that preceded it, shows that the comond year and 34.7 percent in the third pany and its parent are willing to spend year. The apparent plan is to grow this billions of dollars on acquisitions, but margin in part by growing sales by 5 comparatively tiny amounts on the renpercent in each of the second and third ovation of existing franchise stores. And years, which may be optimistic given SEI’s strategy for Improving the Store that SEI existing store sales were up Base seems to rely more on closing unonly 1.5 percent for the first nine profitable stores than it does on improvmonths of 2017 over the same period ing the existing store base. There is a big in 2016. difference between improving the store base (SEI’s parent’s stated goal) and improving the existing store base. Indeed, in the first three quarters of its fiscal year 2018, SEI closed 156 stores and plans to reach 220 store closures by the end of its fiscal year on February 28, 2018.

The overall lesson is that these are perilous times for the franchisee community on a number of levels. It is vi• Brand Conversion. The Sunoco tally more important now, perhaps stores will not be “renovated” into the more so than at any time in the 40-year 7-Eleven brand until the second year plus history of the National Coalition, after the acquisition. There is no indifor franchisees to cation as to whether or not this renoERIC H. KARP remain highly orvation will include anything more than CAN BE REACHED AT ganized, motivated, 617-423-7250 changing the signs. This is consistent and united. ekarp@wkwrlaw.com with SEI’s lack of appetite for capital

“It shows the company and its parent are willing to spend billions of dollars on acquisitions, but comparatively tiny amounts on the renovation of existing franchise stores.”

• Merchandise Sales and Gross Profit. The pre-transaction merchandise gross margin of the Sunoco stores is 31.5 percent. This is interesting because it is significantly above the consolidated gross margin of all SEI domestic stores, which for the ninemonth period ending September 30, 2017 was 34.6 percent, down from 38

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

Vice Chairs’ Forum

FRANCHISEES MUST BE INVOLVED IN DECISION MAKING

BY REHAN HASHMI #WeAreTheBrand VICE CHAIRMAN, NCASEF

The goals of 7-Eleven, Inc. have not their meetings and always been aligned with its franchisees. the franchisor picks “ELECTED FOA REPRESENTATIVES HAVE A Over the years 7-Eleven franchise owners up the hotel room RESPONSIBILITY TO THEIR MEMBERS TO have both praised corporate leadership and pays for meals, BE AWARE, TAKE NOTES AND REPORT and things lean their and felt threatened by it.

BACK TO THEIR ORGANIZATIONS Franchisees don’t have a strong voice way a little more.

AS PART OF THEIR DUTIES.” on brand leadership groups, but continue When you're an into participate. At the time of their cancella- dependent association, the National Business Leadership tion executive, your forget that tomorrow may Council (NBLC) and the CEO Roundtable franchisee associabring change and prosperity. So there's were vastly underrepresented by FOA pres- tion pays for the hotel rooms and plane this constant tension of balancing both idents and vice presidents, who are the tickets and you go in with more credibility kinds of relationships because you know elected representatives of franchise organi- and authority. they're not permanent.

The recent action SEI took against the zations. These folks have a responsibility to Some franchisors collaborate with their members to be aware, take notes and National Coalition—suing us for trade- franchisees to elect some of the members report back to their organizations as part of mark infringement—is now seen by many of their most important governing comtheir duties as elected FOA representatives. as a tactic with three primary purposes: 1) mittees while they appoint the others, but The National Coalition of Associations Intimidation of the National Coalition in our franchisor determines the entire of 7-Eleven Franchisees is the umbrella or- response to our support of a lawsuit on in- makeup of all working committees like the ganization that brings all of the regional dependent contractor status; 2) Distrac- NBLC. Still, franchisees on these councils FOAs together as a way to level the playing tion to deter us from our greater mission have the right to advise, but have no power of protecting fran- to effect any changes in the system or to field. When NBLC and CEO “OVER TIME WE HOPE chisee rights; and 3) veto the franchisor's decisions."

Roundtable members are choRELATIONS WITH Retaliation against sen instead of elected, franAll future franchisee advisory counOUR FRANCHISOR any franchisees who chisees in those roles can give cils formed should include franchisees MAY CHANGE FROM spoke out against feedback, but don’t have any elected by their peers to represent them in BEING HIGHLY the company’s acresponsibility to update their Zone Leadership Council (ZLC) meetings PROBLEMATIC AND tions and policies. fellow franchisees. Individual and the National Business Leadership CONTENTIOUS TO PRODUCTIVE Over time we Council (NBLC) meetings that connect franchisees when chosen for AND UPLIFTING…BUT can only hope rela- directly to SEI leadership. Many of our these roles don’t have the THINGS COULD GO tions with our fran- best ideas have come from working sidemeans to poll their fellow franTHE OTHER WAY chisor may change by-side through this process. chisees to bring suggestions ENTIRELY.” from being highly and comments to company An elected (not selected) NBLC headquarters, have a productive discussion, problematic and contentious to produc- should be an essential part of our 7and then return feedback to the other fran- tive and uplifting. But things could go the Eleven franchise system. It would permit chise owners. If they are not communicat- other way entirely. If you're a franchise as- constructive two-way communication ing with their fellow franchisee colleagues sociation member or officer, when things between the franchisor and franchisees. in an FOA group, how can they represent are contentious you don't want to do A positive culture of “mutual respect and things that lose sight of the fact that you working together” could then be fostered franchisees?

REHAN HASHMI need to work with these folks. On the where the franchisor and franchisees seek As a franchisee CAN BE REACHED AT rehan711@yahoo.com on an NBLC Com- other hand, when things are calm, you to evolve the brand for the benefit of the or 847-845-8477 mittee, you go to don't want to become too complacent and continued on page 44 AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

43

continued from page 43

common good and the system as a whole.

Rather than characterizing franchisee leaders as good citizens or bad citizens, our franchisor must question why the movement among franchisees to support the latest moves by the National Coalition has developed. What are franchisees’ concerns? Are they legitimate? Why did the franchisees choose this path, rather than using an independent NBLC, CEO Roundtable, and Franchisee Advisory Committee? Where did the breakdown in communications between the franchisee community and the franchisor’s management and staff leadership occur?

Franchisees believe there is a school

of hard-liners in the company that believe any concession to a franchisee association—recognition, responding to a demand or suggestion, or whatever—will be viewed as a sign of weakness and only lead to further demands. The more enlightened approach is to think beyond self-interest; more specifically, what action or decision is in the best interests of the system, as opposed to just corporate or franchisees?

We hope our franchisor moves away from positional bargaining and begins to develop a common-interest approach, in which franchisees realize the company is doing “what is right” even when the decisions are extremely difficult. Otherwise, the differences between franchisees and the company will continue in the “we-they” mode.

“ALL FUTURE FRANCHISEE ADVISORY COUNCILS LIKE THE NBLC, CEO ROUNDTABLE, AND ZLC MEETINGS SHOULD INCLUDE FRANCHISEES ELECTED BY THEIR PEERS.”

In large measure, we now believe the framework for the franchisor/franchisee relationship will be established only by franchisee participation in decision-making, as well as the attitudes and leadership of the franchise organization and the franchisee community. Will the parties act out of fear and self-centeredness, crafting tools of destruction? Or will they approach their challenges in a spirit of hope and possibility, building bridges to draw the parties together?

Over the last 10 to 15 years, the relationship between franchisees and franchisors has tended to favor franchisors because of extreme clauses in franchise contracts. Supporting the National Coalition gives franchisees more power and the ability to talk to our franchisor from a position of strength. It's more meaningful and productive, and when our voices are being heard we believe much of the reason is independence. "Whoever pays the bills has the power.”

Vice Chairs’ Forum

OUR VENDORS: A PARTNERSHIP BASED ON NEED

BY NICK BHULLAR VICE CHAIRMAN, NCASEF

The very last point in the National Coalition’s Code of Ethics says, “The National Coalition member believes in the rights of all 7-Eleven franchisees to associate together in an independent trade association controlled and financed by 7-Eleven franchisee members.” The National Coalition does this by working to provide win-win-win situations for vendors, franchisees, our franchisor, and our guests.

It’s a simple fact that manufacturers and service companies have products to provide, and we have space to sell them.

All franchisees greatly value the efforts of our vendor/manufacturer/service provider partners to provide us with all of the great products we have to sell in our stores.

Franchisees want the products that will put the most money on their bottom lines. If anyone can tell us which products will work and make the most money in our stores we want to know!

We want to hear from you, and we will purchase your products.

The smart marketer knows that it is a great opportunity to have the tools to influence franchisee guests favorably towards his or her products. If you as a manufacturer can get enough visibility among 7-Eleven franchisees for your new product, you have a great chance that product will at least be purchased by franchisees and tried by our guests.

To help in this pursuit, the NCASEF has formed a new Me r c h a n d i s i n g NICK BHULLAR CAN BE REACHED AT Committee around bhullar711@yahoo.com this concept of or 626-255-8555 win-win-win, from

members of the National Coalition’s Board of Directors around the country.

We currently have 44 Franchise Owner’s Associations (FOAs) in the 31 states in which 7-Eleven has stores, and we have selected a group that as well as possible represents all areas of the country.

If you have questions about selling to 7-Eleven franchisees, please reach out to me or anyone from the Executive Board for information.

To help everyone sell more products, the National Coalition offers at least five opportunities for vendors to get involved with franchisees on a national scale.

—Avanti Magazine reaches over 7,000 members of the franchised community 6x per year.

“ALL FRANCHISEES GREATLY VALUE THE EFFORTS OF OUR VENDOR/MANUFACTURER/ SERVICE PROVIDER PARTNERS TO PROVIDE US WITH ALL OF THE GREAT PRODUCTS WE HAVE TO SELL IN OUR STORES.” purchase presentation time in half-hour increments at four NCASEF Board meetings per year.

—The National Coalition Website usually peaks at convention time in June and July with over 6,000 unique visitors.

—Our 44 NCASEF member FOAs have varying local events throughout the country including trade shows, holiday parties, golf and charitable events, and local board meetings that vendors can attend.

All of our programs and services, our NCASEF officers, and our FOA

“The NCASEF has formed a NEW MERCHANDISING COMMITTEE around this concept of win-win-win, from members of the National Coalition’s Board of Directors around the country.”

—The National Coalition Annual Convention and Trade Show reaches the largest group of franchisees in the country.

—The NCASEF Affiliate Program provides two meetings per year for vendors and FOA presidents and vice presidents to gather, share information and network.

—Vendors in the Affiliate Program can

members are reachable through our website www.NCASEF.com.

Ultimately all our businesses are partnerships based on need. If we can take a vendor’s promising new product, advertise it in Avanti, show it at our trade show, and get the word out to all francontinued on page 48 AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

47

Vice Vice ’ ’ Chairs Chairs Forum Forum continued on page 47

chisees in the country, we are doing our jobs and raising the water level for everyone: for vendors, for franchisees, for the 7-Eleven brand, and for our guests. We all sell more products. We call this a win-win-win situation.

It is important now more than ever to remember that franchisees are at the forefront of this business. We want to hear from all of our vendors, we want to

“It is important now more than ever to remember that franchisees are the decision-makers in 7-Eleven stores.” know about your products, and we want to know which ones will sell best in our stores.

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.

continued from page 18

Following the deal’s close, the combined company would generate about $83 billion in revenue, operating about 4,350 pharmacy counters, and 320 clinics across 38 states and Washington. • Coca-Cola has announced it will recycle a used bottle or can for every one the company sells by 2030, reported the Financial Times. The company said it will also work towards making all of its packaging recyclable worldwide. • Amazon has joined forces with Warren Buffett’s Berkshire Hathaway and JPMorgan Chase to create an independent company that will provide “high-quality and transparent health care” at a low price to their 1.1 million employees, reported NBC News. • A Virginia Beach 7-Eleven recently sold a $1 million-winning ticket in the Virginia Lottery’s New Year’s Millionaire Raffle, reported WTKR CBS-3. The drawing was held on January 1. Another Virginia Beach 7-Eleven sold a winning $100,000 ticket . • A new Wal-Mart subcontinued from page 52

Vice Chairs’ Forum

WHO IS TO BLAME FOR THE DECLINING GROSS PROFIT?

BY ROMY SINGH VICE CHAIRMAN, NCASEF | PRESIDENT, EASTERN VIRGINIA FOA

There seems to be a lot of frustration among franchisees regarding the decline of gross profit year after year. Many feel we are hardly receiving the same gross profit percentage we saw a few years ago.

Taking a closer look at the situation, I believe the decline in our gross profit percentage is due to numerous factors.

The main reason, I feel, is because SEI only cares about their numbers. This thought is being driven by the actions of the Merchandising Department, which continuously develops aggressive promotions that result in franchisees mak-

quarter pounder for $3 deal was hurting the franchisee’s pocket. In the summer, SEI decided to give away energy doors and in the wintertime they decided to give away every cup of coffee.

The $0.50 coffee deal was just to bring extra traffic into our stores, but how many additional guests have we truly added?

Have we seen a billboard, newspaper, or any TV advertising? All costs for cups, coffee, creamer, stir up holder, in addition to the

“COST OF GOODS IS ANOTHER MAIN FACTOR AFFECTING OUR GROSS PROFIT. FRANCHISEES ARE PAYING MORE THAN WHAT A TRADITIONAL MOM AND POP STORE IS CHARGED FOR THE SAME PRODUCTS.” ing less profit than usual, thereby making SEI look like they have their hands in our pockets.

Franchisees used to make better gross profits through the energy drink and isotonic doors, soda machines, water and grill. Via these items, franchisees used to receive 50+ gross profit percentage, which was offset by cigarette, tobacco, and beer categories’ low margins. This was the healthy gross profit franchisees were used to seeing.

Currently, however, it seems as if every promotional item that is forced on us does not truly work in our favor. In reality, the promotion is just a regular price for the particROMY SINGH ular product or item CAN BE REACHED AT being sold. For exevafoa@gmail.com 757-506-5926 ample, the soda and

labor costs, were coming from our pocket, which in return hurts our gross profit.

Another factor leading to our low gross profit is the ETA program. Since we have pushed ETA, our inventory has increased to over 25 thousand items in every store. This has affected the rotation of our inventory, which has decreased, thus resulting in a lower GP throughout our stores.

Cost of goods is another main factor affecting our gross profit. Franchisees are paying more than what a traditional mom and pop store is charged for the same products. The vendors are complaining they are paying an “extra” amount per case for upgrading our APP and ISP. How can we franchisees negotiate the best cost of goods, which directly impacts our gross profit? It is

obvious that frustration is building within the franchisee community over the APP promotions that are offered.

The end result is franchisees are getting cost (VIP) of the products.

Another example is if a customer buys 5 or more Taquitos we provide a $3 discount, on top of the guest accumulating enough reward points to also grab a Pepsi, Coke, or water. This is at the expense and burden of the franchisee. We franchisees are essentially “giving away” everything to the EXISTING customer base, not necessarily targeting NEW customers. There is not enough advertising being done to let the consumers know about the 7-Eleven app. In addition, the window POP is not enough, which is hurting our GP from already existing customers.

Just look at our competition. There was a point in time where the consumer used to pay an extra 10 cents as a convenience tag. Currently, we are retailing lower in our bakery, cigarettes, and beer categories in comparison to our competition. Why are we hurting our gross profit and who is to blame? If we continue on the current path, I won’t be surprised if our gross profits keep declining in the coming months unless franchisees valuate each promotion, every promo, and CRP those. If SEI wants to see more traffic come through our doors, we must advertise heavily to target and add new customers, so our GP could be recovered.

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

49

Visit the NCASEF Website www.ncasef.com continued from page 24

Wal-Mart Raising Wages After Tax Reform Wal-Mart has boosted its starting hourly wage to $11 and has delivered bonuses to employees, capitalizing on the U.S. tax overhaul to stay competitive in a tightening labor market, reported Bloomberg. e increase took effect in February and will cost $300 million on top of annual wage hikes that were already planned. e one-time bonus of up to $1,000 is based on seniority and will amount to an additional $400 million. e company is also expanding its maternity and parental leave policy and adding an adoption benefit. Wal-Mart’s decision makes it the latest corporate titan to plow expected tax savings into

employee payouts. Boeing Co., AT&T Inc. and Wells Fargo & Co. have all made similar announcements. WalMart said it’s “early in the process of assessing potential additional investments” it could make.

Wal-Mart Raising Wages Aer Tax Reform Wal-Mart has boosted its starting hourly wage to $11 and has delivered bonuses to employees, capitalizing on the U.S. tax overhaul to stay competitive in a tightening labor market, reported Bloomberg. e increase took effect in February and will cost $300 million on top of annual wage hikes that were already planned. e one-time bonus of up to $1,000 is based on seniority and will amount to an additional $400 million. e company is also expanding its

maternity and parental leave policy and adding an adoption benefit. Wal-Mart’s decision makes it the latest corporate titan to plow expected tax savings into employee payouts. Boeing Co., AT&T Inc. and Wells Fargo & Co. have all made similar announcements. WalMart said it’s “early in the process of assessing potential additional investments” it could make.

Wawa Enters Northeast Florida Pennsylvania-based convenience retailer Wawa recently opened the first two of dozens of stores it has planned for Northeast Florida, reported e continued on page 54

continued from previous page

SEI Files Trademark Infringement Claim Against NCASEF SEI recently filed a claim against 3 of the chain’s marks in agreed-upon the National Coalition of Associations ways, relating to certain activities. of 7-Eleven Franchisees (NCASEF) In it’s complaint, SEI said for trademark infringement and un- NCASEF is using the marks in ways fair competition. The complaint was not authorfiled in the U.S. District Court for the ized by the Northern District of Texas, Dallas Di- agreement, vision, on February 16. The result is including on Avanti and the National Coalition will the website no longer use the 7-Eleven logo un- and in press less and until this issue is resolved. releases, and According to the claim, SEI en- is also using a number of 7-Eleven’s tered into a license agreement with other marks without permission. The NCASEF in 2005, granting the asso- company is also claiming unfair comciation a non-exclusive license to use petition, breach of contract, and un-

just enrichment, and has “requested that NCASEF is preliminarily and permanently enjoined from using the infringing marks, that it destroys all

“SEI has sued the National Coalition for trademark infringement and unfair competition over use of the 7-Eleven logo.” materials bearing the marks, and that profits sustained as a result of the infringement and unfair competition are tripled and recovered” by SEI.

continued from page 24

SPECIAL NACS

Membership Offer FOR NCASEF MEMBERS The National Association of Convenience Stores (NACS), in partnership with the National Coalition of Associations of 7-Eleven Franchisees, is now offering a special membership to NCASEF members at the reduced price of $40—an 80 percent discount off of the starting membership rate of $200. The NCASEF NACS Membership Program offers industry-specific programs and services, as well as traditional association benefits to help you compete and succeed. The benefits of the special NCASEF NACS Membership Program include:

• One copy of NACS Magazine (monthly publication).

• Discounts to all NACS events.

• NACS Daily News e-newsletter.

• Discounts on all NACS training, educational, and operational products.

• Congressional and federal agency representation through the NACS Government Relations team.

• Access to NACS Help Desk, an information resource that provides answers to retailer member questions and facilitates greater industry connections.

• Full voting rights as a NACS Domestic Retail member.

• Potential for consideration as NACS Board or Committee Member.

NACS membership is available to any NCASEF member who operates a total of four (4) or less stores and is not a current member of NACS in 2017.

NCASEF members who joined NACS previously at the $40 rate can renew based on the instructions they have received via e-mail and by mail.

To Join: Email NationalOffice@NCASEF.com and ask for the NACS Membership Application, which can be returned by email, fax or U.S. Mail.

If you have questions about NACS membership for NCASEF members, please contact VP Member Services Michael Davis, at mdavis@convenience.org or NACS Retail Membership Manager, Eboni Russell, at erussell@nacsonline.com or (703) 518-4271.

continued from page 48

sidiary called Code Eight has recently started testing a personal shopping service in New York City for busy affluent moms, with the goal of letting them get product recommendations and make purchases simply through text messaging, reported Recode. • Convenience store chain Speedway recently announced it is seeking to fill 1,000 entry-level management positions company-wide, with significant advancement opportunities. • Pilot Flying J announced a new myPilot app capability that delivers real-time, reliable information on parking availability for its guests in partnership with Sensys Networks, a provider of wireless traffic detection and parking data. • Sales through Amazon.com of the 365 Everyday Value brand from Whole Foods Market— which Amazon acquired at the end of August 2017— totaled $10 million in just three months, reported Supermarket News. • Unilever has threatened to withdraw ads from platforms like Google and Facebook if they do not do enough to police extremist and illegal content, reported BBC News. • There are now more people working in the legal cannabis industry than there are dental hygienists in the U.S., reported Business Insider. There were 230,000 people employed in the U.S. legal cannabis industry in 2017, whereas there were 201,000 dental hygienists. • Department store Kohl’s plans to partner with grocery or convenience retailers to lease the white space it has created within its roughly 87,000-square-foot boxes, reported CNBC. • Fast food chain Jack in the Box said it is considering replacing some cashiers with robots as the minimum wage rises in California, reported Business Insider. California is on track to become the first state with a $15 minimum wage. • The California Independent Oil Marketers Association recently announced its partnership with Convenience Stores Against Trafficking, and said it will help empower California’s convenience industry in combating human trafficking across the state. • Casey’s General Stores has partnered with global financial technology company Blackhawk Network Holdings to offer Amazon Cash to its shoppers who don’t have a bank account or prefer not to use debit or credit cards for purchases on Amazon.com. • In desperate bid to stay alive, Sears continued on page 56

52

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

Visit the NCASEF Website www.ncasef.com

continued from page 50

“e 7-Eleven that sold the Mega Millions $450 million winning ticket will get $100,000 in commission.”

Daily Record. e two stores in Duval and Clay counties opened in early December, with seven more planned in those areas. Sites are also targeted for St. Johns County, and the company said Nassau County is of interest. Wawa, with more than 770 stores in six states

and more than 130 in Florida, said it will open six locations in Northeast Florida in 2018 and three to five annually aer that for several years to reach 20-25.

Florida 7-Eleven Sold Jackpot Lottery Ticket A 20-year old Florida man walked away with Mega Millions’ $450 million jackpot on January 5, and he purchased the winning ticket at a Port Richey 7Eleven, reported Fortune. Shane Missler of Port Richey, came forward a week later to claim the grand prize, but chose to accept his winnings in a lump sum. at

meant his prize totaled $281,874,999. e 7-Eleven that sold the ticket will get $100,000 in commission. e Mega Millions jackpot swelled to impressive heights ahead of Missler’s win, in part because of a recent rule change that makes winning the jackpot more difficult, reported CNN Money.

Twenty-three drawings rolled by before Missler’s ticket lined up perfectly with all five numbers plus the Mega Millions ball in the January 5 drawing.

SAA Given ‘Heart Of A Champion’ Award Swim Across America, the National Coalition’s main charity over the last continued on page 56

continued from page 54

CALIFORNIA FOAS HOLD FRANCHISEE TOWN HALL MEETING Five California FOAs—the San Diego FOA, West Coast FOA, FOA of Greater Los Angeles, Joe Saraceno FOA, and Southern California FOA—joined together on January 26 for a town hall meeting that included presentations by NCASEF officers and legislative updates. Nearly 600 franchisees attended the event at the Swad of India Banquet Hall in Upland, California. NCASEF Chair Jay Singh, Executive Vice Chair Michael Jorgensen, Vice Chair Nick Bhullar and Treasurer Jaspreet Dhillon spoke about the state of the National Coalition and provided an update on the California lawsuit, while Ed Casey spoke about legislative issues and labor attorney Mandeep (Bobby) Rupal spoke about the recent ICE raids of 7-Eleven stores nationwide. It was a very productive meeting, with more planned for the future.

Visit the NCASEF Website www.ncasef.com

continued from page 54

three years, is a non-profit organization that is dedicated to raising money and awareness for cancer research, prevention and treatment by hosting open water and pool benefit swim events across the U.S. e organization was recently named the recipient of the 2017 SwimSwam Heart Of A Champion Award. SwimSwam is a swimming news organization covering competitive swimming along with diving, water polo and synchronized swimming. e year 2017 marked Swim Across America’s 30th year of using the sport to raise money for cancer research, and that anniversary was marked with a record-setting fundraising haul of $4.8 million, according to SwimSwam. Since its founding, Swim Across America—which NCASEF and FOAs support though fundraising events—has granted more than $70 million.

tion of Convenience Stores (NACS).

NACS examined how messaging and assortment within cooler doors could encourage sales of healthy beverages in convenience stores. e tests revealed that changing the beverage case planogram to move zeroand low-calorie beverages at eye level and/or to the top of the case, and adding cling displays on the beverage cooler doors with functional messages, increased water, enhanced waters, functional beverages and diet soda sales by 21.3 percent over the control

“C-stores are consolidating as a result of competition from restaurants, supermarkets and dollar stores.”

NACS Examines Impact Of Beverage Messaging Messages focusing on the attributes of a beverage can increase sales—but not always, according to two new pilot tests released by the National Associa-

weeks—and the sales increase did not come at the expense of other cooler items. Total purchase of goods also increased by 11.7 percent in retail sales over the control weeks.

NACS also examined messaging specific to juice in two pilot tests to determine if a targeted messaging campaign would increase awareness and sales of bottled 100% juice at convenience stores. e graphics featured tomato juice, orange juice and apple juice, which taglines reading: “Drink continued on page 60

Play The Name Game!

Look carefully at each page in this issue.

Somewhere in this magazine a line is hidden that contains the words $Name Game Winner + person’s name + city$. If you find this line, and it contains your name, call AVANTI’s Offices at 215 750-0178 before the next magazine is published, and win this issue’s total. NCASEF Members only.

continued from page 52

Holdings announced it will close 103 of its Sears and Kmart stores throughout the U.S., with liquidation sales to begin shortly thereafter, reported The Motley Fool. • Budweiser has switched all its U.S. brewing to renewable electricity and is adding a clean energy logo to its labels as part of a global shift to green power by its parent company AB InBev, reported Reuters. • A new survey by Wakefield Research found that most Americans (67 percent) will be prioritizing healthy or socially-conscious food purchases in 2018, and their primary point of emphasis is cutting back on sugars, with nearly half of consumers (47 percent) planning to eat less sugar or buy more “no sugar added” products this year. • Dollar General Corporation recently announced plans to build a new distribution center in Longview, Texas.The state-of-the-art facility in Gregg County is expected to create approximately 400 new jobs at full capacity and serve approximately 1,000 Dollar General retail locations in Texas and the southeast. • Rosa Foods, makers of the complete nutrition meal replacement Soylent, announced that it will continue its rapid expansion into retail with product launches in 800 7-Eleven locations in Greater Seattle, Portland and the Bay Area. • Global fitness lifestyle brand Reebok and design firm Gensler have partnered on a new “Get Pumped” campaign to reimagine gas stations across the country as fitness hubs, reported CSP Daily News. • QuikTrip makes the most appearances in GasBuddy’s Top 100 Pit Stop list, with 18 of its gas station locations making the cut. They are followed closely by Wawa with 14 and Shell with seven. The gas stations on the list represent the best locations where drivers can enjoy pleasant customer service and enjoy a perfect pumping experience, according to GasBuddy. • Drugstore chain CVS Health Corp said it would use part of a $1.2 billion savings from the new U.S. corporate tax law to increase hourly pay for its workers—to $11 an hour effective April 2018—and offer a paid parental leave program, reported Reuters. • Once-bankrupt retailer Circuit City relaunched its online business on February 15, reported CNBC. Circuit City also has plans to open kiosks, stores within other stores and eventually its own showrooms. • Up to 2,000 people may have been exposed to Hepatitis A after eating non-packaged food items or using the restcontinued on page 62

56

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

Visit the NCASEF Website www.ncasef.com continued from page 23

Legislative Update Indiana Bill Would Raise Cigarette Tax & Smoking Age New legislation introduced in Indiana would drastically increase taxes on cigarettes and raise the legal age at which residents can buy tobacco products from 18 to 21, reported the Indianapolis Business Journal. If passed, House Bill 1380 would boost the state’s cigarette tax by $2 per pack, from 99.5 cents to $2.995. Another proposed measure—House Bill 1381—would remove exemptions from public facilities that still allow smoking indoors such as casinos; cigar and hookah bars; fraternal and social clubs; tobacco stores; taverns; and cigar manufacturing plants and specialty stores.

Florida Could Raise Smoking Age Florida legislators have recently introduced a bill to raise the legal smoking age from 18 to 21, reported WFTV-9. If passed, Florida would be the sixth state to increase the legal smoking age. Florida Senator David Simmons, the bill’s author, believes that increasing the age limit by just a few years will significantly decrease the number of young smokers. Opponents of the bill argue that an 18-year-old can vote, get married and serve in the military, so they should be able to decide if they want to smoke or not. Under Simmons’ proposal, a first offender would be sentenced to 20 hours of community service, and 40 hours for a second offense happening within a year.

A similar bill has been introduced in the Florida House of Representatives.

Boston Mayor Signs Ban On Plastic Bags Boston’s Mayor Martin J. Walsh recently signed a measure banning single-use plastic bags in Boston, despite worries the city’s low-income residents and seniors would bear the financial brunt of the new rules, reported the Boston Globe. Boston joins 59 other municipalities statewide and hundreds across the nation, including Seattle and Washington, D.C., in adopting a ban. It takes effect in December 2018, giving stores and shop-

“Boston could become the next city to ban plastic bags in favor of reusable bags or 5-cent compostable plastic bags or paper.”

pers time to prepare. e ban would encourage shoppers to use reusable bags or pay a 5-cent fee for either a thicker, compostable plastic bag or a larger paper bag with handles. Stores would collect the fees to help offset the cost of using more-expensive bags.

Walsh’s decision ends more than a year of debate over whether to eliminate disposable shopping bags and steer businesses and consumers toward reusable ones. e goal, supporters say, is to reduce litter and cut the amount of plastic in the environment. Opponents included representatives of the paper and plastic industries as well as critics who say the measure will amount to a tax on the poor. e Retailers Association of Massachusetts also opposed the ban.

Indiana Sunday Alcohol Sales Could Kick In Sooner Indiana residents may be able to buy carryout alcohol on Sundays sooner than first expected aer a House panel voted recently to move up the effective date of a bill that would overturn the state’s Prohibition-era ban on such sales, reported the Associated Press. e House Public Policy Committee voted 9-1 in favor of a change that would make the measure take effect immediately instead of July 1, should the measure be signed into law

by Governor Eric Holcomb. e Indiana Association of Beverage Retailers and the Indiana Retail Council both support the change.

Republican Statehouse leaders have made Sunday alcohol sales a top priority this year aer decades of debate and failed efforts to modernize the state’s liquor laws. e House and Senate both approved separate bills that would allow stores to sell carryout alcohol on Sunday between noon and 8 p.m. However, neither chamber has given final approval to either of the bills.

“Indiana, Florida and Illinois all have plans to raise the smoking age to 21.”

Illinois Tobacco Buying Age Proposal Moves Forward An Illinois Senate panel recently endorsed a bill, SB 2332, that will raise the age to buy tobacco in an effort to prevent teenage smoking, reported the Chicago Tribune. e Senate Public Health continued on page 64

58

AVA N T I J A N U A R Y | F E B R U A R Y 2 0 1 8

$name game winner Kamran Chaudry, Ft Washington, MD$

Visit the NCASEF Website continued from page 56

Your Veggies,” “Get Juiced Early” and “Ultimate Energy Drink!” In both tests, juice sales declined slightly (2.4 percent in each test). NACS stated these results demonstrated that a simple awareness campaign alone does not always lead to an increase in sales. holders.”

Campbell Soup Buys Snyder’s-Lance Campbell Soup has recently purchased the snack maker Snyder’s-Lance for $50 a share, an all-cash deal worth $4.87 billion, reported Business Insider.

Campbell has pushed into other markets amid declining soup sales. is acquisition was its sixth in five years. It bought Pacific Foods, which makes organic broth and soup, earlier in December. Snyder’sLance will become part of Campbell’s global biscuits and snacks division, which includes brands like Goldfish crackers and Milano cookies.

www.ncasef.com

“Meal kits pose both an opportunity and a challenge for convenience store chains that have their own distribution centers and commissaries.”

The deal “will provide our consumers with an even greater variety of better-for-you snacks,” Campbell Soup CEO Denise Morrison said in a statement. “The combination of Snyder’s-Lance brands with Pepperidge Farm, Arnott’s and Kelsen will create a diversified snacking leader, drive sales growth, and create value for shareholders.”

C-Stores Squeezed By Fast Food & Dollar Stores Competition from all sides is squeezing the nation’s 154,500 convenience stores, reported Bloomberg.

As the income gap between top and bottom earners continues to widen, convenience store retailers find themselves competing with restaurants, supermarkets and dollar stores for cash-strapped customers. This is putting pressure on c-store/gas station retail chains to merge, the article states.

The $550 billion convenience store in-

dustry last year recorded its weakest merchandise sales growth since 2013, and businesses are rushing to improve loyalty programs, offer better food and let customers order online. That means more consolidation could be on the way for the fragmented c-store industry, where chains make up less than 40 percent of the market.

Nestle Sells U.S. Candy Business To Ferrero Swiss food group Nestle has agreed to sell its U.S. confectionery business to Ferrero for $2.8 billion, reported Reuters. Nestle has cited the unit’s weak position in the United States—where it trails Hershey, Mars and Lindt—as the continued on page 62

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.

60

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

Nick Bhullar, Vice Chairman, Board Member, So. California FOA

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

bhullar711@yahoo.com 818.571.1711

rehan711@yahoo.com 847-845-8477

Romy Singh, Vice Chairman, President, Eastern Virginia, FOA

National Office

757-506-5926 evafoa@gmail.com

nationaloffice@ncasef.com

Visit the NCASEF Website www.ncasef.com

continued from page 60

rationale for a sale. For family-owned Ferrero, the cash deal offers a chance for the Italian company to build scale quickly in that key market, where it has done two other deals in the past year. e maker of Nutella spread and Ferrero

“With the purchase of Nestle’s U.S. candy business, Ferrero will become the third-largest chocolate company in the U.S. and globally.”

Rocher pralines will become the thirdlargest chocolate company in the U.S. and globally. For Nestle, a consumer shi away from junk and sugary foods has led the Swiss company to focus on “nutrition, health and wellness,” although it says it is committed to its non-U.S. confectionery business.

Meal Kits Tested In C-Stores Two separate pilot tests developed by the National Association of Convenience Stores (NACS), in conjunction the Project on Nutrition and Wellness (PNW) and the Cornell Food and Brand Lab (CFBL), showed that convenience stores have considerable opportunities to become players in the meal kit space, while also revealing the challenges. In both meal kit pilots, the intent was to address some downsides to many popular meal-delivery kits, such as requiring a subscription, cost, packaging waste and the need to plan a day or more in advance to order them. e first pilot test was in September 2015 at Square One Markets (Bethlehem, PA) in cooperation with e Six 62

AVAN T I J A N U A R Y | F E B R U A R Y 2 0 1 8

Eastern Virginia Franchisees Adapting To Changes Romy Singh, President, Eastern Virginia FOA No doubt, running a 24/7 operation is a challenge. Our region is facing the same quality employee shortage issue like other areas. The economy in Hampton Roads is based on the Navy’s presence in the harbor, and shipyard hiring/firing. As most of the aircraft carriers are not present in our area, our businesses will be negatively impacted.

Our stores were also experiencing numerous robberies. Our FOA stood up with the help of SEI’s Loss Prevention Department and we started partnering with several different city police chiefs and mayors to make our stores safer for our customers and employees. As a result, we succeeded in opening a police mobile substation in one of the high crime stores in Norfolk on February 1, the first of many we hope to come. We made sure that office is equipped with a computer and printer. We have also approached vendors and asked them to donate enough samples to the office, so police officers don’t have to buy snacks, food and other items. Also, police in Norfolk, Hampton and Richmond are now patrolling our stores more.

We recently had a meeting with the Hampton police chief and came up with a solution so police can watch all Hampton 7-Eleven storefronts from their command unit via specially installed security cameras. We really want to thank SEI Loss Prevention and Operations for their support in this effort.

Declining GP is another major concern for our franchisees. We all are working hard to educate our franchisees on how to stay profitable. I am proud of our Board of Directors team and our members, who all have dedicated themselves to helping each other.

O’Clock Scramble. e second test was launched in March 2017 at the Shaw’s 88 Kitchen store at Utah State University (USU). While consumers told NACS that they were receptive to dinner meal kits purchased at stores, the sales for both pilot tests did not reflect the stated interest. NACS said both tests demonstrate the marketing, merchandising and sourcing challenges convenience stores face in producing and selling meal kits to customers.

“Dinner meal kits may be a con-

room at a 7-Eleven store in Utah, reported Time Magazine. Utah health officials said the possible exposure affects customers who visited the 7-Eleven store between December 26, 2017 and January 3. • Vermont recently became the ninth state to legalize marijuana and the first to do it through legislation, reported the Huffington Post. The new law is effective as of July and legalizes the possession of up to one ounce of cannabis. • C-store chain Wawa recently announced it is expanding its GrubHub delivery service into New Jersey. • UPS is buying 125 Tesla all-

continued on page 64

continued on page 64

continued from page 56

Visit the NCASEF Website www.ncasef.com continued from page 62

continued from page 62

cept that is still ahead of its time for smaller convenience stores. However, it still may be appropriate for larger convenience store chains that have their own distribution centers, bakeries and commissaries, or those that operate highly evolved and dedicated foodservice programs,” said Jeff Lenard, NACS vice president of strategic industry initiatives.

Small Business Transactions Reached Record Highs BizBuySell.com recently reported that annual small business transactions ascended to record highs in 2017, exceeding previous highs set in 2016 by 27 percent. is year’s increase marks a noteworthy upward shi in the number of small businesses changing hands across America, the company said. For several years aer the 2008-2009 Great Recession, sales volume remained low as small businesses struggled financially and capital for financing remained tight. Beginning in 2013, as the economy recovered, closed transactions have steadily increased. But 2017 represents a signifi-

cant increase, with 9,919 closed transactions reported compared to the 7,842 in 2016. is year-over-year growth rate is the largest since 2013.

Keurig Acquires Dr Pepper Keurig Green Mountain recently purchased Dr Pepper Snapple in a deal that creates a new beverage giant with $11 billion in sales and combines the Dr Pepper, 7UP and Keurig’s single-serve coffee brand, reported CNBC. e new entity, known as Keurig Dr Pepper, will be 87 percent owned by Keurig shareholders and 13 percent owned by Dr Pepper shareholders. e deal gives Keurig access to Dr Pepper’s drink distribution network, one of the country’s major three. It therefore creates an option down the road for Keurig to shuffle its coffee and other products through its pipeline. Keurig will also gain access to Dr Pepper’s allied brands, a portfolio of healthy and upstart drinks it has invested in and distributes through its network. ese brands include Fiji Water and Vita Coco.

electric semi-trucks, the largest order for the big rig so far, as the package delivery company expands its fleet of alternative-fuel vehicles, reported the New York Post. • Starbucks recently announced a series of new employee offerings that include wage increases, stock grants and a new Partner and Family Sick Time benefit.The company said these offerings will total more than $250 million for more than 150,000 employees and are accelerated by recent changes in the U.S. tax law. • Amazon shipped over 5 billion items worldwide with Prime in 2017, just via one-day and two-day shipping, reported TechCrunch.com. The company said more new, paid members joined Prime worldwide in 2017 than any other year. • According to a national survey conducted on behalf of online grocer Peapod by ORC International, 73 percent of adults currently make dinner at home at least four nights a week and nearly one third (31 percent) are planning to cook dinner at home more often in the New Year. • Burger chain Red Robin plans to offset minimum wage hikes by firing busboys, reported the New York Post. The company hopes to save about $8 million this year by eliminating busboys at each of its 570 restaurants. • Toyota said it will introduce Amazon Alexa—Amazon’s intelligent cloud based voice service—within select Toyota and Lexus vehicles in 2018, allowing customers to ask for directions, control entertainment, get the news, add items to a shopping list, control their smart home while on the road, and more. • San Francisco start-up Embark Trucks recently completed a coast-to-coast test drive of its autonomous semi-truck, reported CNBC. It drove from Los Angeles to Jacksonville, Florida, covering around 2,400 miles without relying on a human driver on the freeway. • A professed failure to understand Bitcoin did not deter KFC Canada from accepting the cryptocurrency continued from page 68

Legislative Update continued from page 58

Committee voted 6-2 to prohibit the sale of tobacco or related products to anyone under 21. e current age is 18. e ban would include cigarettes, cigars, snuff and chew, and nicotine-based products such as e-cigarettes or vaping materials. A House committee voted 3-1 recently to advance an identical proposal. Each goes to the floors of their respective chambers for consideration.

Opponents complained the plan would hurt small busi-

64

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

nesses and convenience stores, which could be fined $200 for a first offense. ey also argued that the legislation sends the wrong message. While buying tobacco under 21 would be barred, underage possession would not be penalized. Current law penalizes underage smokers with a $25 fine for a first violation, but it is rarely enforced. Fourteen Illinois cities and counties, including Chicago, have already adopted local ordinances setting the age to buy tobacco at 21.

continued from page 20

7-ELEVEN RECEIVES STORE OPERATIONS SUPERSTAR AWARD

VIXXO TO SERVICE OVER 500 7-ELEVEN SUNOCO STORES

7-Eleven was recently honored with a Retail TouchPoints Store Operations Superstar Award, which recogFacility and asset management nizes innovative and successful store company Vixxo announced that it will operational strategies implemented this provide maintenance services to over past year. 7-Eleven was recognized in 500 7-Eleven owned Sunoco locations the Loss Prevention category for suc- on the East Coast. Vixxo said it will be cessfully completing a new system roll- responsible for providing overall out of 5,000 stores in North America in maintenance for fuel, food and beverless than one year, while all stores re- age services, and HVAC to the Sunoco mained open for business 24 hours a retail locations. To support this added day, seven days a week. growth and ensure exceptional service, 7-Eleven engaged Tyco Retail SoVixxo said it has expanded its cuslutions to execute against a tomer service team in Hartfour-pillar strategy based ford, Conn.

The “7-Eleven on revenue assurance, relationship between was recognized in inventory variation SEI and Vixxo the Loss Prevention control, incidents began in 2009 with and investigations, category for successVixxo providing reand safety and asset fully completing a active and proacprotection awareness new system rollout of tive maintenance to improve store per5,000 stores in North services across 7formance and deliver a America.”

Eleven's more than consistent, positive shop9,300 corporate and franper experience while also inchisee-owned locations in vesting in multiple innovative solutions: North America.

• Integrated exception-based reporting and case management systems to fully 7-ELEVEN UNVEILS FIRST track incidents.

• Real-time digital video solutions with USDA ORGANIC, COLDIP cameras to help keep customers and PRESSED OFFERINGS SEI recently announced that 7employees safe.

• Fire and intrusion systems, with video Eleven stores are carrying a new line maintenance and remote monitoring of proprietary juices that rival those prepared fresh in free-standing, highfor building security.

• Intelligent video solutions to help end juice bars. The new organic, coldidentify robbery offenders by capturing pressed juices are part of the retailer’s digital information from electronics in 7-Select GO!Smart private brand line of premium better-for-you snacks and their possession during a crime.

beverages. The 7-Select GO!Smart juices come in four varieties: • Clean & Green—Kale, cucumber, apple, spinach, mint, celery, lime, parsley • Tropical Glow—Pineapple, orange, banana, apple, mango, passion fruit, coconut water • Berry & Bright—Tart cherry, carrot, blackberry, pomegranate, bilberry, cranberry, acai • Restoration Red—Tomato, tart cherry, beet, strawberry, apple, lime Each variety is USDA-certified organic, made from whole fruits and vegetables, the company said in a released statement. A special promotional retail price for the launch is 2/$4 at participating stores for a limited time. The everyday suggested retail price is $2.99 for a 14-ounce bottle, less than the cost of premium national brand juices. The juices are sold chilled in the refrigerated section.

EXCLUSIVE HERSHEY'S GOLD CAPPUCCINO On the heels of the launch of Hershey's Gold bars—The Hershey Company's first candy bar launch in 20 years—SEI struck gold with its new, exclusive Hershey's Gold caramelized crème cappuccino. The limited-time continued on page 68

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

67

Visit the NCASEF Website www.ncasef.com

continued from page 67

continued from page 64

beverage treat joined Hershey's Gold bars, already available at participating 7-Eleven stores. The Hershey's Gold candy bar hit 7-Eleven shelves in D ecemb er and already has become one of its top-selling candy offerings. The new 7Eleven Hershey's Gold cappuccino mimics the rich buttery salty sweet taste of its namesake candy. SEI said it began working months before the new candy bar launched to develop the exclusive flavored cappuccino.

SOUR PATCH WATERMELON SLURPEE BACK FOR A LIMITED TIME SEI recently brought back the Sour Patch Watermelon flavor to the Slurpee machine. The drink is the most popular limited-time flavor in the history of the semi-frozen beverage, and was available exclusively at participating 7-Eleven stores through February 2018. In 2015, 7-Eleven introduced the first Sour Patch Watermelon Slurpee flavor, which quickly gained a loyal fan following. The bright pink-colored Slurpee drink became the first featured (limited-time) flavor to become the top-seller ahead of the two perennial favorites, cherry and

68

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

as payment for a bucket of fried chicken, reported the Financial Post. The limited-time marketing promotion for a “Bitcoin Bucket” was launched on the afternoon of January 11 and the chain sold out of the ten-piece chicken buckets entirely by 11 a.m.

Friday. • Of the 7-Eleven stores raided by federal Immigration and Customs Enforcement on January 10, five were in Florida, including one in Palm Beach County, reported the Palm Beach Post. • Toys R Us is planning to close roughly 180 AFFORDABLE 7-ELEVEN stores across the country—or about one‘BIG GAME’ DAY OFFERS fifth of its U.S. store fleet—in a bid to restructure the company and emerge from 7-Eleven helped customers prebankruptcy protection, reported CNBC. • pare for watch parties around the Marijuana sales topped annual liquor country with offers on hot food items sales for the first time in Aspen, Coland additional essentials to prepare for orado, reported the Aspen Times. Legal-pot purThe Big Game between the New Engveyors hauled in $11.3 million in revenue last year compared with $10.5 million for liquor stores, acland Patriots and Philadelphia Eagles, cording to figures provided by the city’s Finance as well as the morning after. 7Department. • Dunkin’ Donuts announced Eleven offered deals on that it has removed artificial dyes meals and snacks from its donuts in the United “Sour Patch such as large pizStates. The company had previously pledged to eliminate artificial Watermelon Slurpee zas for $5.55, 10 dyes from all of its food and bevchicken wings flavor quickly gained a erages in the U.S. by the end of for $7.49 and loyal fan following to 2018. • Grubhub and burger five value menu become the top-seller chain White Castle recently grill items for ahead of the two peren- announced a partnership that will offer delivery from $4. 7-Eleven had nial favorites, cherry White Castles across the couneverything needed and cola.” try, in markets where both brands are for a great game day available. Online ordering and delivery are feast—including 2-liter currently available from Grubhub at more than sodas, cases of beer, chips, pizza, fresh 120 White Castle locations. • A new survey from AAA reveals that that 63 percent of U.S. drivproduce and even sports gear for the ers report feeling afraid to ride in a fully game—and at the right price. Addiself-driving vehicle, a significant decrease tionally, customers were invited to stop from 78 percent in early 2017. • Burger chain Mcby again the next mornDonald’s recently announced that it will ing for products such as eliminate foam packaging from its worldwide supply chain by the end of 2018, and Advil, Gatorade, coffee plans to further its efforts to source its fiber-based and hot breakfast items packaging from recycled sources by 2020. • C-Store to refuel after a long chain RaceTrac kicked off the New Year by night of cheering on offering any size, any flavor coffee for just their team. $1 during the month of January.

cola. Fans of Sour Patch Watermelon were also able to enjoy the iconic flavor as an exclusive flavor of 7-Select Soda crafted by Jones and 2oz. or 5-oz. bags of the classic watermelon shaped candy at participating 7-Eleven stores.

Diet Coke Launches Full Brand Makeover

Limited Edition Sweets Maui Pineapple

Coca-Cola recently re-launched Take a trip to the Hawaiian Islands with the vibrant tropical taste of Diet Coke with a bold pineapples in Swisher Sweets Limited Edition Maui Pineapple. Zesty, new look, a fresh attifruity blends continue to be a customer favorite and there’s no doubt tude, and four delithat this sweet and satisfying pineapple blend will be, too. cious new flavors that Swisher Sweets Maui Pineapple is available for order in a resealable join the iconic origi2-count pouch with the “Sealed Fresh” guarantee and is ready for shipNew Ginger Lime, Feisty Cherry, Zesty Blood Orange nal. Introducing Diet ment to all stores nationwide. It is offered in “Save on 2,” “2 for 99¢” and Twisted Mango join the Diet Coke family.

Coke Ginger Lime, Diet and “2 for $1.49” options.

Coke Feisty Cherry, Diet Coke Zesty Blood Orange and Diet Coke Twisted This limited edition of Swisher Sweets is available only while supplies Mango into the Diet Coke family in sleek, contemporary 12-oz. cans. The last. Additional limited tastes are expected throughout 2018. Place your new flavors bring more variety to the trademark by complementing the orders through McLane. For more information contact your Swisher repunique, crisp taste of Diet Coke with unexpected-yet-delicious tastes. resentative at 1-800-874-9720.

The two-year innovation process was fueled by consumer research continued on page 72 pointing to younger Americans’ affinity for big, yet refreshing and great-tasting, flavors in their favorite foods and beverages. Diet Coke and the new flavors will be sold as on-the-go The health benefits of Hemp Derived Cannabidiol (CBD) are tremendous, helping singles and in eight-packs. Diet Coke also will with things that have a broad appeal like anxiety, inflammation and pain. Education and continue to be offered in all existing package Access is necessary for franchisees, associates and customers alike. Broker MarketHub sizes, such as standard 12-oz. cans, mini cans, brings these aspects together with years of experience in CBD category management, glass bottles and more. distribution and creating retail programs that bring real value. Through their extensive research of this industry they have aligned themselves with the best CBD brands out there:

MARKETHUB & 7-ELEVEN LAUNCH THE NEXT BIG CATEGORY

Ghirardelli Unveils On-The-Go Milk & Caramel Squares

Ghirardelli introduces the new impulse 2count Milk & Caramel Squares SKU, perfect for convenience. Caramel is the largest flavor profile in chocolate, and Ghirardelli is two times the fair share of market. Ghirardelli is leveraging its widely appealing caramel hero flavor in an affordable impulse offering sold for on-the-go shopping.

Grab yours before Grow candy sales with it’s too late! McLane Ghirardelli’s new 2-count UIN—031677.

Milk & Caramel Squares.

• PHOENIX TEARS CBD OIL—Phoenix Tears is Janet Sweenys life’s work with the mission to improve quality of life through cannabis products. Thirty years of formulation expertise is brought to you in hemp-derived CBD products to optimize your health with tincture, vapes and more.

• RESTORATIVE BOTANICAL BOLDER CARAMELS—Restorative Botanicals’ passion is to make and sell effective and affordable hemp extract infused herbal products that provide calming relief and promote an overall sense of health and wellbeing.

• EVERVIVE HEMP GUMDROPS—Evervive is a wellness brand designed to help your body thrive. By offering innovative and natural hemp-derived CBD formulations, EVERVIVE brings your health to the next level.

• UNCANNY WELLNESS POWER DRINK MIXES—Their goal is to bring the benefits of hemp to you in exciting ways, and to improve your quality of life. At Uncanny Wellness, they believe in clean, transparent, healthy products. Everything they make is formulated with non-GMO, plant-based, natural ingredients.

All products are available through MarketHub. To order, contact Blake Patterson at 615-497-9958 or blake@markethubco.com, or Orders@markethubco.com.

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

71

continued from page 71

Swisher Sweets’ Banana Smash Here To Stay The perfect fruit blend of Swisher Sweets Banana Smash cigarillos has been so popular that it is no longer a Get a taste of the tropics with limited edition product, but available Swisher Sweets’ Maui Pineapple. for purchase year-round. Swisher Sweets Banana Smash is available for order in a re-sealable 2-count pouch with the “Sealed Fresh” guarantee and is ready for shipment to stores nationwide. It is offered in “Save on 2,” “2 for 99¢” and “2 for $1.49” options.

The sweet, smooth blend of banana and strawberry continues to be a customer favorite, and this year they won’t be able to resist their favorite blend available in your everyday selection.

Place your orders through McLane. For more information contact your Swisher Popular Swisher Sweets Banana Smash is back to stay. representative at 1-800-874-9720.

Fire And Freeze Sour Patch Kids Sour Patch Kids Fire and Freeze Soft & Chewy Candy is coming to 7Eleven. Sour Patch Kids is taking everybody’s favorite sour-then-sweet treat and shaking things up with a kick of cool and a hint of heat.

Sour Patch Kids Fire, available in stores now, features the classic, fruity Sour Patch mix with a surprise hot, sweet finish. With Sour Patch Kids the #1 indexing top-5 candy brand with Hispanics (Nielsen Homescan, Total U.S. 52 w/e 07/02/16), this hot, new variety was inspired by the street food and desserts of Mexico and is sure to help capitalize on the spicy candy trends.

Sour Patch Kids Freeze, available in April, features a refreshing lemonade variety mix with an invigorating surge of Fire and Freeze, the hottest cool. The blended citrus with juicy fruits innovatons from and one-of-a-kind cooling sensation Sour Patch Kids.

provide an experience 60 percent of teens find extremely new and different.

Thirty-four percent of Sour Patch Kids’ growth comes from new buyers and the NCC category is expanding rapidly on the heels of exciting new trends and flavor experiences. Get ready to make some cool cash with the hottest new innovations from Sour Patch Kids.

Pip Squeaks Surprise Is A Special Treat For Kids The huge trend happening right now in candy is Surprise candy and Toys! Pip Squeaks Surprise is the latest introduction to the Surprise Category and will be a successful performer in your stores. It features 12 collectible pets, each with its own corresponding pet food in the form of dextrose candy. For example, Coco the Monkey gets bananas, Tucker the Dog gets bones, Turbo the Turtle gets leaves and Penelope the Bird gets raindrops.

Kids love the flavor of dextrose candy. Both boys and girls will love the excitement of opening a new Pet House to see the surprise of what pet they will collect next and then enjoying the delicious pet Pip Squeaks food candy. Each new pet house Surprise features candy and a toy pet. comes with a collectible pet, candy pet food, clip, collection guide and stickers. Kids can collect all 12 adorable pets and send in the completed collection guide to receive another surprise 13th pet. Pip Squeaks Surprise should be in your stores.

New Cutting-Edge my blu blu recently unveiled the latest addition to its product lineup: my blu, the most satisfying adult e-vapor product available on the market today. In maintaining key attributes of the blu brand, including its simplistic and convenient usability, my blu merges innovation, power, and performance to bring cuttingedge features to life in a first of its kind form factor for blu. my blu’s big-impact advantages include an ergonomic design that fits comfortably in the palm of your hand, new pod technology featuring pre-filled liquid pods with hassle-free “click-and-go” continued from page 74

72

AVA N TI J A N U A R Y | F E B R U A R Y 2 0 1 8

continued from page 72

usability, and a long-lasting 20-minute USB recharge so users can enjoy anywhere, at any time. blu has even gone the extra mile to introduce the myCARE guarantee with my blu, marking the brand’s first lifetime device warranty available to their consumers. my blu Starter Kits, which inRamp vape sales to the next clude the my blu device, one USB level with my blu. charging cable, and one liquid pod in the Gold Leaf flavor, sell for $19.99, with my blu Liquid Pods including two pods for $8.99.

Lifeway Kefir Now Available To 7-Eleven The #1 drinkable Kefir is now available to 7-Eleven franchisees. Reach new customers by expanding your dairy snacking selection. This “Better for You” product is what today’s consumer is buying. Now your Make your store the store can be the destination for their daily preferred destination for serving of kefir on-the-go. Lifeway’s Lowfat Lifeway’s Lowfat Kefir.

Kefir is up to 99 percent lactose-free, glutenfree, and made with all natural, non-GMO ingredients. Kefir is a tart and tangy cultured dairy drink packed with protein, calcium, and 12 live and active probiotic cultures. Lifeway’s Lowfat Kefir is lightly sweetened with 1g of added cane sugar per ounce. Blend into a smoothie, whip into a dip, or simply pour yourself a glass.

Welch’s Cookie Bites Features Real Fruit Now available at 7-Eleven nationally is the first ever Welch’s Cookie Bites made with real fruit. It is all the favorite cookie classics, now with 100% real fruit! Offer your customer the chance to take their cookie snacking to Drive snack the next level with sales with Welch’s Real Fruit Cookie Bites.

74

AVAN T I J A N U A R Y | F E B R U A R Y 2 0 1 8

deliciously chewy Raspberry Chia & Mixed Berry fruit pieces in every bite. Soft baked cookies packed with real fruit pieces, Welch’s cookie bites are the perfect way to liven up your cookie set and drive incremental dollars to the category!

Hi-Chew Introduces New Açaí Flavor Açaí is the newest Hi-Chew flavor debuting in 2018. Morinaga America, Inc. continues to innovate Hi-Chew Açaí promotes the super with the newest flavor of the fruit’s popularity. world’s best chewy candy. Packed with Açaí flavor and containing real chia seeds rolled into the outer layer, this sensationally chewy fruit candy has not only a feel-good real fruit taste, but Açaí is on-trend as a “superfruit” growing in popularity due to its known antioxidant health benefits. Hi-Chew Açaí is the perfect buy and a great ‘pick-me-up’ snack for your customers. See Hi-Chew Açaí on the McLane VTS and at upcoming FOA Events attended by your HiChew representative.

Graze Oat Squares Wholesome Mission Introducing new Graze Oat Squares, made with wholegrain oats and superfood ingredients for a tasty source of protein and fiber. Three flavors are now available at 7-Eleven: Cinnamon, Maple and Cocoa Vanilla.

With Oat Squares, Graze continues Nutritious Graze Oat Squares its mission to reimagine snacking by can now be ordered for your 7-Eleven store. creating wholesome snacks that are as delicious as they are nutritious. Graze Oat Squares are handmade at a family run bakery in the British countryside for a uniquely fresh and chewy texture.

Today, Graze has over 100 snacks that have been tried and tested by millions, with the very best now available at retail. Each recipe is created by combining delicious, classic flavors with wholesome, high-quality ingredients for one-of-a-kind snacks. Plus, every Graze creation is nutritionist-approved and perfectly portioned, so you can get excited about making the better choice.

FRANCHISEES ONLY

FRANCHISEES ONLY

foa events

Central Florida FOA & South Florida FOA Annual Charity Golf Event

National Coalition Board of Directors Meeting

(venue to be announced) March 27, 2018 Phone: 347-251-1828

San Juan Marriott Resort San Juan, Puerto Rico May 9-11, 2018

Central Florida FOA & South Florida FOA Annual Trade Show

FOA of Greater LA/ San Diego FOA Trade Show Pechanga Resort and Casino Temecula, California March 7, 2018 Phone: 909-822-4122

Columbia Pacific FOA Annual Trade Show Doubletree Hotel Lloyd Center Portland, Oregon March 13, 2018 Phone: 503-998-5941

TriState FOSE Trade Show Metro Points Hotel New Carrollton, Maryland March 15, 2018 Phone: 301-580-0305

(venue to be announced) March 28, 2018 Phone: 347-251-1828

Delaware Valley FOA Annual Trade Show Caesars Palace Atlantic City Atlantic City, New Jersey April 4, 2018 Phone: 215-852-4738 Phone: 215-771-6178

Chesapeake Division FOA Trade Show Waterford Reception Center Springfield, Virginia April 5,2018 Phone: 703-309-8081

UFOLINY Trade Show Hilton Long Island Melville, New York April 11, 2018 Phone: 631-486-6266

National Coalition 43rd Annual Convention & Trade Show Gaylord Palms Resort & Convention Center Orlando, Florida

July 23-26, 2018 Trade Show: July 25-26, 2018

San Francisco/ Monterey Bay FOA Trade Show Paradise Ballrooms Fremont, California April 25, 2018 Phone: 510-693-1492

Texas FOA Trade Show (venue to be announced) May 23, 2018 Phone: 214-208-0992

Texas FOA Charity Golf Tournament Cowboys Golf Club Grapevine, Texas May 24, 2018 Phone: 817-797-4911

San Diego FOA Charity Golf Tournament (venue to be announced) May 24, 2018 Phone: 619-713-2411

Utah FOA Trade Show & Golf Tournament Airport Hilton Doubletree Hotel Salt Lake City, Utah June 6-7, 2018 Phone: 801-450-4538

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA Trade Show Donald E. Stephens Convention Center Rosemont, Illinois June 6, 2018 Phone: 815-210-2950

Eastern Virginia FOA Golf Tournament Sleepy Hole Golf Course Suffolk, Virginia June 6, 2018 Phone: 757-247-6152

Eastern Virginia FOA Annual Trade Show Hilton Garden Inn Suffolk River78

AVA NT I J A N U A R Y | F E B R U A R Y 2 0 1 8

front Suffolk, Virginia June 7, 2018 Phone: 757-247-6152

Midwest FOA Michigan Trade Show (venue to be announced) June 27, 2018 Phone: 815-210-2950

7-Eleven FOAC Charity Golf Outing St. Andrews Golf Course West Chicago, Illinois June 27, 2018 Phone: 847-353-9999

7-Eleven FOAC Annual Trade Show Odeum Expo Center Villa Park, Illinois June 28, 2018 Phone: 847-353-9999

Columbia Pacific FOA Annual Golf Tournament (venue to be announced) June 28, 2018 Phone: 503-998-5941

7-Eleven FOAC Annual Picnic Forest Preserves of Cook County Busse Woods Grove 29 Elk Grove Village, Illinois July 21, 2018 Phone: 847-353-9999

Midwest FOA Michigan Golf Outing (venue to be announced) August 16, 2018 Phone: 815-210-2950

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA Golf Outing St. Andrews Golf & Country Club West Chicago, Illinois August 22, 2018 Phone: 815-210-2950