Avanti July/August 2021

July/August 2021

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7 - E L E V E N

F R A N C H I S E E S

Stronger Together

Franchisee Unity The Highlight Of Convention

Our Unity Is Our Strength Buckle Up—This Ride Is Going To Last A Bit Longer Time For Transparency 40 Is The New 35 National Coalition Demands That SEI Fix ASI 2 Bugs Immediately

Workers’ Compensation Claims Process And Cost Control Protecting Your Business And Employees

N C A S E F

Board Meeting Third Quarter 2021

PRSRT STD U.S. POSTAGE PAID York, PA PERMIT No. 232

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THE VOICE OF 7-ELEVEN FRANCHISEES

Contents 23 Our Unity Is Our Strength

By Jay Singh, NCASEF Chairman

25 Buckle Up—This Ride Is Going To Last A Bit Longer

By Michael Jorgensen, NCASEF Executive Vice Chairman

29 Time For Transparency

17 Accounting, Delivery & Staffing Issues Dominate Third Quarter NCASEF

Board Meeting

20 Franchisee Unity At Full Display During 45th Annual NCASEF Convention & Trade Show Nine Out Of Ten 7-Eleven Franchisees Say Running Their Store Has Negatively Impacted Their Health

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

By Alley Capatosto, Financial Service Professional Agent, New York Life Insurance Company

Talk With Other Franchisees On Free Telegram App Page 8 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. 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.

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Join Your Local FOA.....15

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42 Protecting Your Business And Employees

Bits & Pieces..........................................14

Legislative Update..................46

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By John Harp, CSP, ARM—Risk Engineering Consultant, Mitsui Sumitomo Insurance Group

Member News................................6

SEI News...............................51

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39 Workers’ Compensation Claims Process And Cost Control

NCASEF Survey Finds Staffing Crisis Worsened This Spring

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37 Forty Is The New 35

By Arfan “Art” Farooqi, Board Member, Central Florida FOA

FTC Commissioner Gives Keynote Address at NCASEF Convention

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FOA Meetings Calendar.................................54

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By Tom Ayres, Witmer, Karp, Warner & Ryan, LLP

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35 National Coalition Demands That SEI Fix ASI 2 Bugs Immediately

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12 Sun & Fun At The Greater Oregon FOA Golf Tournament

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July/August 2021

Vendor Focus..................57 Franchisee Calendar.........58

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

Jatinder Singh

7-Eleven Takes The Lead Among Top 100 C-Store Chains 7-Eleven has cemented its place among the top chains in the U.S. convenience store industry, keeping its crown as the No. 1 chain on the 2021 Convenience Store News Top 100 ranking, reported CSNews Online. According to data provided to CSNews by Nielsen TDLinx, the retailer boasted a total U.S. store count of 12,973 locations as of June 2021—broken down to 5,282 company-operated stores and 7,691 franchise stores. The Convenience Store News Top 100 is the industry’s longest-running accounting of the largest convenience store chains by store count.

The Speedway acquisition diversifies 7-Eleven’s presence to 47 of the 50 most populated metro areas in the United States and expands its company-operated store footprint as well, according to the article. That figure far outnumbers No. 2 chain Alimentation Couche-Tard’s 5,833 total U.S. store count, and new No. 3 chain Casey’s General Stores’ 2,365 total store count. Aside from the top three chains, EG America, GPM Investments,

“ 7-Eleven is No. 1 on the 2021 Convenience Store News Top 100 ranking with 12,973 locations as of June 2021.”

Wawa, QuikTrip, Kwik Trip, Pilot Co. and Sheetz round out the top 10 on this year’s Top 100 ranking. The top 10 retailers account for a combined 28,041 industry stores (or 19 percent)—and of those, the top three retailers account for a combined 21,171 stores (or 15 percent).

NATIONAL CHAIRMAN

702-249-3301 • jays@ncasef.com

Michael Jorgensen EXECUTIVE VICE CHAIRMAN

347-251-1828 • mcjorg@yahoo.com

Paul Lobana VICE CHAIRMAN

C-Stores Are The Hit Of The Tokyo Olympics Tokyo’s omnipresent convenience stores, known as konbini, extended a lifeline to some 42,000 accredited foreigners—journalists, sports officials and support staff—who converged in Tokyo, Japan in July for the Summer Olympics, reported the Los Angeles Times and TimeOut.com.

With COVID-19 restrictions and shortened restaurant hours, dining options were significantly limited for the city’s Olympic visitors, but they still found a bit of adventure in the likes of Tokyo’s 7-Elevens, Lawsons and FamilyMarts.

Canadian journalist Devin Heroux lived almost exclusively on a diet of 7-Eleven food, and published daily updates of his hotel konbini spread on Twitter. Plenty of Tokyoites even replied with suggestions of what he should try next. The same thing happened on the Twitter page of fellow Canadian sports reporter Anastasia Bucsis, whose followcontinued on page 8

818-203-2527 • paullobana@aol.com Rehan Hashmi VICE CHAIRMAN

847-845-8477 • rehan711@yahoo.com

Ajinder Handa VICE CHAIRMAN

425-438-8381 • ajinderhanda@hotmail.com

Jaspreet Dhillon TREASURER

310-892-2106 • jaspakam@gmail.com Shawn Howard OFFICE ADMINISTRATOR

210-971-9211 • shawnh@ncasef.com

Eric H. Karp, Esq. GENERAL COUNSEL

617-423-7250 • ekarp@wkwrlaw.com

John Riggio MEETING/TRADE SHOW COORDINATOR

262-394-5518 • johnr@jrplanners.com

John Santiago MANAGING EDITOR

267-994-4144 • avantimag@ncasef.com

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.

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Tricia Kessler ART DIRECTOR

215-500-3204 • design@kesslerdigital.com

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

The Voice of 7-Eleven Franchisees

July/August 2021

©2021 National Coalition of Associations of 7-Eleven Franchisees Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.

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ers were more eager to know about the ins and outs of onigiri packaging than of the live sporting events that were occurring in the meantime. Andrew Keh of The New York Times even dedicated an entire story to the myriad of snacks he sampled from his nearest konbini, proclaiming that 7-Eleven’s chicken gizzards saved his life. Many journalists proclaimed it’s only fitting that Japan’s convenience stores be awarded with as much recognition as this year’s gold-medal athletes.

Seven & i Holdings Honored With NACS Award

To address CO2 emissions, the company’s goal for 2030 is to reduce emissions from store operations by 30 percent and reduce emissions across its entire supply chain. By 2050, Seven & i set a goal to reduce emissions from store operations to net-zero. For plastics use, the company is promoting the reduction of the environmental impact associated with containers and packaging by pledging to make 50 percent of the containers and packaging used in original products consist of environmentally conscious materials by 2030, and 100 percent by 2050. For food waste, the “Green Challenge 2050” aims to raise the company’s organic waste recycling rate to 70 percent by 2030 and 100 percent by 2050, and the amount of food loss and waste will be reduced by 50 percent by 2030 and 75 percent by 2050.

$15 Wage Becoming The Norm Businesses, particularly in the restaurant, retail and travel industries, are now offering a $15 wage to try to fill enough jobs to meet surging demand from consumers, millions of whom are now spending freely after a year in lockdown, reported the Associated Press. The change since the pandemic has been swift. For years labor advocates had trumpeted $15 an hour as a wage that would finally allow low-paid workers to afford basic necessities and narrow inequality. It struck many as a longterm goal. Now, many staffing companies say $15 an hour is the level that many businesses must pay to fill their jobs.

At ZipRecruiter, the number of job postings on the site that are ad-

At the NACS Convenience Summit Asia in mid-August, leading global convenience retailers, business and industry experts named Seven & i Holdings the winner of the 2021 NACS Asian Convenience Retail Sustainability Award, reported NACS Online. The Coca-Cola Company sponsored the award. The award recognizes Seven & i for its “Green Challenge 2050” initiative. Launched in May 2019, the environmental declaration establishes goals for 2030 and 2050 related to CO2 emissions reduction, plastics countermeasures, food loss and waste/ organic waste recycling countermeasures and sustainable procurement. To help cut down the company’s negative impact on the environment, “ The number of job postings on Seven & i is working with various ZipRecruiter.com that are adstakeholders in the value chain to vertising $15 an hour has more reduce CO2 emissions caused by energy consumption, reduce waste than doubled since 2019.” and promote recycling.

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vertising $15 an hour has more than doubled since 2019, said Julia Pollak, labor economist for the company. The proportion of jobs that offer 401(k) retirement accounts, flexible scheduling, signing bonuses and other benefits has risen, too. The CEO of Snagajob, a site for hourly workers, said a handful of restaurant chains are going so far as to offer retirement plans—he calls it the “white collarization” of blue collar jobs, as benefits once reserved for professionals are being offered to some service workers. continued on page 12

Talk With Other Franchisees On Free Telegram App National Coalition members are using a new app to discuss issues, make announce- ments, post information and send files. It’s called Telegram and will accommodate many more than the 250 group member limit of WhatsApp. We already have more than 400 members on Telegram, and we encourage you to down- load the free app onto your phone or desktop and sign on using the following link: https://t.me/joinchat/QR1k9Efl4QmXqtIFtpaCkQ. There are just a few basic rules: 1. Must be a franchisee and paying member of an FOA affiliated with the National Coalition.

2. Not a member of an FOA? Join one ASAP or become a National Coalition Member at Large.

3. Display your full name and area on your profile so issues can be related to that area.

4. If your full name is not displayed, you will be removed.

5. Posts should be strictly business related.

6. Pro SEI? No problem—we all are, that is why we are franchisees. FOA/National Coalition haters, please stay away.

7. Encourage your fellow franchisees to join.

8. STAY UNITED. LOVE YOU ALL.

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NCASEF

HIGHLIGHTS

Nine Out Of Ten 7-Eleven Franchisees Say Running Their Store Has Negatively Impacted Their Health

“Trust is a real issue in part be“ WHEN ASKED cause SEI accepts money from its IF IT WERE POSvendor partners while telling us we won’t necessarily receive the lowest cost of goods from SIBLE TO SELL THEIR STORE AND the supply chain they control,” said NCASEF The 2021 National Coalition survey of 7-Eleven franchiExecutive Vice Chairman Michael Jorgensen, sees paints a picture of operators who are struggling to SALVAGE THEIR a Tampa-area franchisee. “When we raised make a profit even as their health and well-being have been INVESTMENT, this issue with FTC Commissioner Rohit negatively impacted by running their stores. The survey, 71 PERCENT Chopra at our recent convention, he said the conducted during the summer, yielded responses from 598 INDICATED commission was aware of the practice.” franchisees, representing 1,118 stores in the U.S. Seventy-one

In 2020, SEI unveiled a new accounting THEY WOULD.” percent of those respondents said they have been 7-Eleven system for its U.S. stores.

When franchisees for at least 10 years. franchisees were asked if they “trust the ac Sixty-eight percent of responcuracy of 7-Eleven’s retail accounting sysdents said they signed the 2019 tem,” 89 percent disagreed. Eighty-two Franchise Agreement. Of those, 83 percent disagreed with the statement, percent disagreed with the state“7-Eleven’s initiatives and strategies are ment, “I am in a better financial poaligned with my goals.” sition since signing the agreement.”

When asked if it were possible to sell Seventy-five percent said they their store and salvage their investment, would not enter the system again as 71 percent indicated they would. At the a franchisee if they had the chance to same time, 80 percent said the equity in do it over. their store and its value are lower today than “The results of this survey are alarming,” they were two years ago. said Jay Singh, chairman of the NCASEF. Since 2006, SEI has spent $28.3 “ EIGHTY-SEVEN PERCENT OF “The overall sentiment is that franchisees are billion in 39 separate acquisitions, RESPONDENTS SAID THEIR JOB without investing in many of their exunhappy. The company is making money IS MORE DIFFICULT TODAY THAN isting franchised stores. Sixty percent selling gasoline, but franchisees are telling IT WAS FIVE YEARS AGO.” said it had been more than a decade us they are not making a reasonable profit since their store received a physical because of the nature of our contract.” plant upgrade worth at least $10,000.

When asked to choose from a list of 11 “most important issues facing my business,” 82 percent cited staffing and the cost of labor. Eighty-seven percent said their job is more difficult today than it was five years ago. An overwhelming 80 percent agreed with the statement, “The effect of running my 7-Eleven business has negatively impacted my physical health, mental health, and/or family well-being.”

Trust continues to be a major sticking point in the relationship between SEI and its franchisees. More than three-quarters of franchisees disagreed with the statement, “7-Eleven trusts its franchisees.” The same percentage of respondents indicated they do not trust 7-Eleven.

When asked if they thought 7-Eleven executives were honest and ethical, 74 percent disagreed. For comparison, in the National Coalition’s 2018 survey of franchisees, 64 percent disagreed with that statement.

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FTC Commissioner Gives Keynote Address at NCASEF Convention We were honored to have Federal Trade Commission (FTC) Commissioner Rohit Chopra speak at our annual convention in Orlando recently. It was clear from his comments that he understands the challenges facing all franchisees and the specific concerns we have about our relationship with 7-Eleven, Inc. Chopra has promised to “safeguard operators of franchised businesses from abusive practices by franchisors.”

Following Chopra’s lead, the FTC has been soliciting comments on the Franchise Rule which enforces laws prohibiting unfair business practices. The NCASEF Board, actcontinued on page 18

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166 Speedway Properties Up For Sale Speedway, recently acquired by 7-Eleven, is selling off 166 former service station, retail development sites and undeveloped land sites in 22 states, reported CStore Decisions. The properties are being sold individually through a sealed bid auction through Chicago-based NRC Realty & Capital Advi-

sors. Some of the properties have small buildings on them. Properties are being sold in an as-is, where-is with all faults condition, and NRC has recommended that anyone planning on submitting a bid perform his or her investigation of the properties beforehand.

NRC said that, unless noted otherwise, there is no minimum bid amount and a bidder may choose what to bid. However, the seller reserves the right to accept or reject any bid.

Delivery Apps Expand Services To C-Stores & Supermarkets Driven by skyrocketing consumer demand during the pandemic, restaurant delivery companies like DoorDash and Uber Eats are rapidly expanding their services to convenience stores, grocers, pharmacies, pet stores and even department stores, reported ABC News. Expanding continued on page 14

Sun & Fun At The Greater Oregon FOA Golf Tournament It was a beautiful summer day on July 19, when members of the Greater Oregon FOA gathered at the Pumpkin Ridge Golf Club just outside of Portland to participate in the group’s Annual Golf Tournament. Pumpkin Ridge is best known as the first course that Tiger Woods won at when he turned professional. The event had a shotgun start with 30 teams, and the tournament was enthusiastically supported by the vendor community. Golf was followed by dinner and a prize raffle. Special thanks to GOFOA President Naeem Kahn and Todd Matson from Miller/Coors for putting this outstanding event together.

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beyond restaurant delivery is critical for Uber Eats and DoorDash, which have struggled to make a profit on the slim margins they get from restaurants. Restaurant delivery can be profitable in dense urban markets, where drivers can complete multiple orders in an hour, according to one analyst. But outside of cities, where deliveries take longer, adding orders from Walgreens or Costco makes better use of drivers’ time.

Non-restaurant delivery makes up around 5 percent of sales at both Uber Eats and DoorDash, but that business is growing rapidly. DoorDash started working with convenience stores like 7-Eleven in April 2020 and more recently opened its own DashMart fulfillment centers. It’s already the market leader in convenience store delivery, with a 60 percent share of the market, according to Edison Trends.

Economy Permanently Changed By Pandemic Federal Reserve Chairman Jerome Powell recently said that the U.S. economy has been permanently changed by the COVID pandemic and it is important that the central bank adapt to those changes, reported the Associated Press.

Powell said that, while it is not yet clear if the delta variant of COVID will have further impact on the economy, the country has already seen significant changes since the pandemic began shutting the country down in March 2020.

Those changes range from the increase in remote work, to restaurants offering more take-out meals, to real estate agents learning to show homes virtually, he noted. Many companies have already made large investments in technology to adapt to the challenges that the pandemic has presented. Powell said the 14

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heavy investment by companies in new technology means there will be more jobs in the future associated with maintaining that technology but also potential job losses in industries focused on in-person contact. He said some of those industries may be moving to an “automated, no-contact model.”

SEI Upgrades Emergency Notification System SEI is rolling out a new tech-based emergency notification system that will be more efficient at alerting store associates to faster moving incidents, like a nearby robbery or active shooter event, or civil unrest in the neighborhood, reported Loss Prevention Magazine. According to the article, SEI started the process of im- “ SEI is rolling out proving its cri- a new emergensis communication system cy notification by examining system that is what stores al- more efficient ready had at at alerting store their disposal. associates to One of those technologies is faster moving the company’s crisis incidents.”

7MD (7-Eleven Mobile Device), a tablet that store location managers use for item information, managing cycle counts, handling payment, and even scanning products. It seemed ready-made for store-level communications, SEI’s asset protection manager told the publication.

7Alert was then piloted in 700 stores within eight short weeks.

The technology is essentially a software API between two platforms: the company’s case-entry system and the 7MD. Critically, the design pushes emergency notifications continued on next page

7-Eleven recently opened its 1,000th store in Hong Kong, reported Retail News Asia. The company launched its very first store in Hong Kong back in 1981. • The makers of some of the world’s bestselling food and drink brands warned they would keep raising prices as they grapple with the strongest inflation in years, reported the Wall Street Journal. Nestlé, Diageo, Anheuser-Busch InBev, and Danone all said that, while sales were increasing as key markets rebound from the pandemic, the recovery was also leading to rapidly increasing costs for ingredients, packaging and transport. • Supply chain services company McLane recently held a National Hiring Day to recruit more than 2,000 part-time and fulltime drivers and warehouse workers.

Candidates were able to apply in person at any of McLane Company’s 70 distribution centers nationwide on July 16. • Uber recently announced that its on-demand and scheduled grocery delivery service is now available in over 400 cities and towns across the U.S. This marks Uber’s first major grocery expansion in the U.S., more than doubling the availability of the offering and accelerating its grocery rollout this year with a 1,200-store partnership with Albertsons Companies. • DoorDash is expanding its service menu with the addition of DoubleDash, which allows customers to add their favorite items from nearby stores to their original order for no additional delivery fee or order minimum, reported Supermarket News.

Both orders will arrive together, with the same delivery person. • Ampex Brands, a Yum! Brands Inc. and 7-Eleven franchisee with more than 400 restaurants and convenience stores, recently announced it acquired Au Bon Pain from ABP Corporation, a subsidiary of Panera Bread. Au Bon Pain’s 171 locations will join the Ampex Brands family and increase the company’s revenue by approximately 10 percent annually. • Chipotle, Target and Shopify are among the companies teaming up with TikTok Resumes, a pilot program that lets job candidates submit video resumes on the social platform, reported CNBC. The recruitment offering is yet another way for companies to connect with potential employees as the war for talent rages on. • The National Federation of Independent Business’s June jobs report reveals that 46 percent of small business owners have job openings they could not fill even while raising compensation. • British American Tobacco (BAT), the UK’s largest tobacco firm, said it sees cannabis as part of its future as it tries to continued on page 34

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directly to the store. Upon identification of an incident, the company’s hotline auto generates a notification to 7MD devices in a predetermined radius of the incident location, which sounds an alarm until someone manually confirms notification of the event on the device. Stores receive reminders or suggestions via the app for actions to take, such as dropping excess cash or to have panic devices on hand.

With the pilot proving successful, the app will soon roll out to all 7MDs.

A Bumpy Road For C-Store Foodservice Convenience store prepared food is still on the menu for many shoppers, but not nearly as many as one year ago, reported CSNews Online, citing the findings of its 2021 Convenience Store News Realities of the Aisle Study, an annual

benchmark study of U.S. c-store shoppers. Slightly more than half of c-store shoppers still make a practice of purchasing prepared food at c-stores—52 percent say they have done so within the past month. However, this is an enormous 28-point drop from the 80 percent of c-store shoppers who said the same in 2020. Accordingly, the average number of prepared food purchases made at convenience stores within the past month fell from 5.0 times to 2.7 times, a decline of 2.3 purchases.

Among shoppers who said they did not purchase prepared food from a c-store in the past month, the top three reasons cited were: they didn’t plan to make a prepared food purchase when they went to the store; they prefer not to buy prepared food at c-stores; and they weren’t hungry when they were there. Each of these reasons was cited by 31 percent

of the shoppers. Additionally, 23 percent say the food was too expensive, and 22 percent didn’t like the available selection.

Another red flag for convenience foodservice is a drop in satisfaction year over year: 64 percent of shoppers report feeling completely satisfied or very satisfied with their last c-store prepared food purchase, down 7 points from 2020.

Protect Employees From Mask Confrontations NACS announced that it has joined nine other associations in a letter requesting clarification on the recently issued CDC mask guidance, asking that the enforcement burden should not be placed on retail employees. The letter was sent to U.S. Department of Health and Human Services Secretary Xavier Becerra, U.S. Occupational continued on page 16

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Safety and Health Administration Acting Assistant Secretary James “ Thirty-nine percent of c-store Frederick, and Centers for Disease retailers said there were ‘signifControl and Prevention Director icant’ levels of disruption across Rochelle Walensky.

The letter asked the agenthe supply chain during the cies “to prioritize the safety of second quarter of 2021.” our employees and clarify that businesses should not be the enforcers of mask wearing.” The beverages and 67 percent reporting supletter pointed out how embattled frontply challenges with beer. Also, two in five line retail employees have been during the industry suppliers (38 percent) said they COVID-19 pandemic while continuing to faced “significant” levels of disruption for serve the public with food, fuel and other materials necessary to create their prodnecessities. When some localities put the ucts. Compounding inventory challenges onus of mask enforcement on retailers, in Q2, three in four retailers (76 percent) many confrontations became heated and said it was difficult to fill available posiphysical, including several deaths related tions. Only 2 percent of retailers surveyed to mask enforcement. said they did not face The Asian American Hotel Owners hiring challenges.

Association; The Energy Marketers of Confidence among America; FMI, The Food Industry Assoconvenience retailers ciation; International Franchise Associaand suppliers that imtion; National Association of Truckstop provements are coming is low: Operators; National Grocers Association; Only 25 percent of retailers and 27 National Retail Federation and the Socipercent of suppliers were confident ety of Independent Gasoline Marketers of that supply disruptions will improve America joined NACS in signing the letter. in the second half of the year.

C-Store Supply Chain Disruptions Are A Concern Product procurement throughout the supply chain was a major challenge for convenience stores and their supplier partners in the second quarter and is expected to continue throughout 2021, according to two NACS surveys of U.S.based convenience retailers and their supplier partners. Two in five convenience retailers (39 percent) said there were “significant” levels of disruption across the supply chain during the second quarter of 2021, and 86 percent reported that at least 10 percent of their orders were disrupted.

Beverages were particularly a challenge in Q2, with 72 percent of retailers reporting supply disruptions of packaged 16

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Despite the challenges, in-store sales have rebounded to pre-pandemic levels at convenience stores, according to NACS CSX sales data ending April 2021. Fuel sales also have largely recovered. Finished gasoline supplied, which is tracked by the U.S. Energy Information Administration and is a proxy for supply, is only 1.8 percent lower the last two weeks of June 2021 than the same period in 2019.

Online Food Ordering Is Here To Stay Turns out when consumers get used to ordering restaurant meals to be delivered straight to their door, they are not so quick to give up that on-demand convenience, reveals a new PYMNTS’ study,

“The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce.” Even as consumers grow comfortable returning to restaurants and as lifting local regulations allow dining rooms to reopen at full capacity, digital sales are remaining strong for most restaurants.

The report finds that many of the on-demand ordering behaviors consumers developed in lockdown are here to stay. The study notes that two-thirds of consumers are now ordering restaurant meals to be eaten at home, and that they are 31 percent more likely to order from restaurants for off-premises consumption than on-premises. These food-on-demand behaviors are not limited to restaurant ordering—the study found that 72 percent of grocery shoppers now order their groceries online for delivery, with 28 percent more ordering for curbside pickup. Additionally, the lines between the businesses that deliver restaurant meals and those that deliver groceries are also blurring, with some eGrocery stores delivering meals cooked inhouse and with supermarket chain Albertsons Companies now partnering with DoorDash.

7-Eleven Australia Settles Franchisee Class Action Suits 7-Eleven Australia recently agreed to settle franchisee class actions following mediation, reported Retail News Asia. A statement from the convenience chain to the news outlet confirmed the settlement but gave no insight into the details of the agreement. “7-Eleven can confirm that a non-binding in-principle agreement to settle the class actions has been reached, continued on page 19

N C A S E F

Board Meeting Third Quarter 2021

Accounting, Delivery & Staffing Issues Dominate Third Quarter NCASEF Board Meeting The NCASEF Board of Directors met July 31 and August 1 at the Gaylord Palms Resort in Orlando, Florida to discuss the most pressing issues affecting 7-Eleven franchisees nationwide. At the top of that list were the new ASI 2 accounting system and McLane delivery problems. Stores currently using ASI 2 find that the system is full of bugs that need to be addressed, and the Board decided to collect all known issues from franchisees so they can be better communicated to SEI. Many of the FOA leaders present at the meeting expressed the frustration their members are having with McLane deliveries—the erratic delivery schedules due to McLane’s driver shortage, as well as the errors being made by the drivers during check-in. The federal Fair Franchising legislation making its way through Congress was also discussed. The legislation features a private right of action clause that will allow franchisees to sue their franchisor for providing misleading Franchise Disclosure documents.

Other topics on the agenda included the employee shortage, and what could be done to attract reliable workers when the big box retailers are offering more pay and benefits. The second day of the meeting featured vendor presentations by representatives of Botanic Tonics, Ferrara, and Big Ideas Marketing.

NCASEF Board members will meet next on November 15-17 in Kauai, Hawaii to further discuss and find solutions to franchisee issues and concerns. This fourth quarter meeting will also include an Affiliate Members meeting.

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NCASEF

HIGHLIGHTS

ing on your behalf, edged to franchisees that the FTC is closely monitoring investigations by other jurisdictions, both in has been quite vocal the U.S. and around the world, into SEI’s parent company. over the last few years expressing concerns over the way SEI “Based on what we heard from Commissioner Chopra, exerts control over its franchise 7-Eleven franchisees should be hopeful the playing field owners and publicizing the fact could soon be leveling,” said Singh. that 7-Eleven franchisees are not guaranteed the lowest cost of goods from the franchisor-controlled supply chain “ FOLLOWING CHOPRA’S LEAD, because SEI accepts money Results of a recent survey of U.S. 7-Eleven franchise owners conducted by NCASEF finds an overwhelming THE FTC HAS BEEN SOLICfrom vendors. majority have raised their wages beyond what is mandated Because owners of franITING COMMENTS ON THE by their state or local minimum wage, but still face chronic chised businesses do not have FRANCHISE RULE understaffing. The 17-question survey of 422 respondents the right to file private legal WHICH ENFORCES LAWS was conducted in June 2021. action against a franchisor for “This survey proves what our franchisee members have PROHIBITING UNFAIR violation of the Franchise Rule, been telling us for a long time. They can’t find enough peowe must rely on the FTC to BUSINESS PRACTICES.” ple to work and they are working too many hours protect our interests. themselves,” said Jay Singh, chairman of the Aside from Chopra, members of Congress are NCASEF. “What is most telling is that only also stepping up to improve protection for “The message to 13 percent of franchisees who responded franchisees. Recently, Rep. Jan Schakowsky said overnight operations were financially franchisees was that greater (D-IL), who chairs the House Consumer profitable to them as franchise owners.

Protection and Commerce Subcommitscrutiny will reign in some of That’s because the economic environtee, called for a Congressional probe of 7-Eleven’s practices, whether they ment we find ourselves in has changed, the Franchise Rule. make changes on their own or but the royalty structure for 7-Eleven “It was refreshing to hear Commissioner franchisees hasn’t.” they are forced to do it.”

Chopra’s commitment not only to enforcing

NCASEF Survey Finds Staffing Crisis Worsened This Spring

the Franchise Rule, but also expanding the — Keith Miller Franchisees who said overnight operarule to include the substance of the relationship tions were unprofitable were asked how after we buy in. Most of the time, bad things happen these four factors impacted profitability: after franchisees sign their franchise agreement,” said • Increased labor cost (27.25 percent) NCASEF Chairman Jay Singh.

• Lack of an available, qualified and reliable workforce (11.05 Chopra’s talk was facilitated by Keith Miller, the principal percent) of Franchisee Advocacy Consulting and a Subway franchise • Lack of customer traffic during overnight hours (10.54 owner, who also addressed the convention. Miller is an outpercent) spoken advocate for franchisee interests around the country • Declining customer count due to newer competitive who has watched the situation between 7-Eleven and its stores near your store(s) (0.26 percent) franchisees for years.

Fifty percent cited “All of the above.”

“The message to franchisees was that greater scrutiny Ninety-seven percent will reign in some of 7-Eleven’s practices, whether they make of respondents said they “ THIS SURVEY SHOWS FRANCHIchanges on their own or they are forced to do it,” said Miller. have had trouble staffing SEES ARE BEING SQUEEZED BY The FTC’s consent order allowing SEI ownership of their store over the last year.

THE STAFFING CRISIS AND THE Speedway required SEI to divest 293 of its locations. But Ninety-six percent said Chopra told the National Coalition he remains concerned TERMS OF THEIR AGREEMENT.” they (or their designee) the deal may still be harmful to consumers. He also acknowlcontinued on page 43 18

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subject to terms of a settlement deed being agreed and subject to the approval of the Federal Court of Australia. The settlement follows mediation between the parties on 24, 25, and 29 June 2021,” said 7-Eleven.

In February 2018 Stewart Levitt, senior partner at Levitt Robinson Solicitors which was acting for the franchisees, filed a claim in the Federal Court alleging misleading and deceptive conduct, unconscionable conduct, and contract breaches by 7-Eleven, and alleging the ANZ bank had provided loans that were unsustainable. In 2019 the class action hit a roadblock when the court accepted an undertaking from 7-Eleven Australia. An in-principle settlement was approved in August 2020 between ANZ and the applicants, and the class actions against 7-Eleven continued with a trial set for winter 2021. However, in May of this year a judge rejected a proposal by the convenience chain for a pre-trial ruling and mediation took place in late June.

Retail Workers Quitting For Higher-Paying Jobs Retail workers, drained from the pandemic and empowered by a strengthening job market, are leaving jobs in record numbers, reported the Washington Post. Some 649,000 retail workers put in their notice in April, the industry’s largest one-month exodus since the Labor Department began tracking such data more than 20 years ago.

Some are finding less stressful positions at insurance agencies, marijuana dispensaries, banks and local governments, where their customer service skills are rewarded with

“ Some 649,000 retail workers quit their jobs in April, the industry’s largest one-month exodus in more than 20 years.”

higher wages and better benefits. Others are going back to school to learn new trades, or waiting until they are able to secure reliable childcare.

Companies of all sizes, meanwhile, are offering a host of perks—from free appetizers to subsidized college courses—to attract and keep workers. Some labor experts, however, say retailers are not going far enough in addressing structural problems in the industry. Retailers, they say, should be focusing more on stable schedules, safer working conditions and benefits like paid sick leave and vacation time.

Online Grocery Market Nearly Tripled In 2020 In 2020, more consumers than ever before were deciding to order food and beverage items online to avoid grocery shopping in crowded stores, where they might be exposed to the COVID-19 virus. As reported by Packaged Facts’ new report “The Future of Grocery: Online Grocery, Meal Kits, & Direct-to-Consumer Food,” the online grocery market nearly tripled in 2020.

Packaged Facts projects that online sales of food and beverages will decelerate over the next five years, although the pandemic boom in 2020 and 2021 will affect the market for years to come.

Online grocery shopping is largely driven by convenience, even during the COVID-19 pandemic. Packaged Facts’ June 2021 National Online Consumer Survey found that online grocery shoppers most often report shopping for groceries online for convenience, with pandemic-related concerns that prevent consumers from shopping inside stores being the second most commonly selected reason. Nonetheless, many consumers do identify the pandemic as the reason they have used online grocery shopping options for the first time or have increased their use of online grocery shopping.

In Packaged Facts’ November-December 2020 survey, 35 percent of consumers reported using grocery store curbside pickup for the first time because of the coronavirus.

Seven-Eleven Japan’s Plans To Retain Foreign Workers Seven-Eleven Japan Co. plans to start programs to support both the private and work-life of foreign workers at its convenience stores as part of efforts to retain them amid a labor shortage due to Japan’s graying population, reported Kyodo News. The company, which employs about 37,000 foreigners, plans to establish a database that will compile information on them, including nationality, education and job history, to enhance the workers’ credibility when applying for credit cards, rental housing and other services.

The programs for foreign workers, primarily students, aim to encourage them to settle down in Japan and work over the long term, the company said. Seven-Eleven Japan will also introduce training courses for foreign workers to learn skills, including those required in the distribution and information technology sectors.

C-Stores In The Post-COVID World A new report by Omnicom Commerce Group (OCG) provides insights into convenience shopping, helping retailers and brands understand how convenience store shoppers are changing their behaviors, how they are doing economically, at work and at school, and what they perceive the future will look like. Some of the most critical insights from the survey include: • Economic Dislocation: During COVID, over 40 percent of convenience continued on page 43 J U LY | A U G U S T 2 0 2 1 AVANTI

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A Special Thanks To Our 2021 Convention Sponsors!

DIAMOND Anheuser Busch

PLATINUM Coca-Cola PepsiCo

GOLD McLane Company

SILVER Advantage Solutions Bang Energy Constellation Brands Keurig Dr Pepper King Palm MONSTER Energy

BRONZE A SHOC Aon Risk Services Barbot Insurance Services BIC USA

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BlueTriton Brands CROSSMARK Convenience Dreyer’s Grand Ice Cream Ecolab Future Proof / Beat Box Beverages Glanbia Performance Nutrition / Optimum Nutrition Heineken USA Hershey Company Hostess Brands InComm In Motion Design JUUL Labs Mike’s Hard Lemonade Molson Coors Mondelez International Perfetti Van Melle Red Bull Ruiz Foods SRP Companies Swedish Match Swisher International

Despite labor shortages and the increasing spread of the COVID-19 delta variant, more than 714 franchisee attendees representing approximately 1,800 stores gathered at the Gaylord Palms Resort in Orlando, Florida on August 1-4 to partake in the 45th Annual NCASEF Convention and Trade Show. It was a strong showing of unity as 7-Eleven franchisees from across the country, along with their families and friends, enjoyed four days of fun activities like a trip to the Kennedy Space Center and the Charity Night Gala with silent and live auctions, informative seminars with cash prize raffles, and the Grand Banquet with guest speaker Federal Trade Commission Commissioner Rohit Chopra.

The two-day trade show was also a big hit with franchisees. The convention center floor was filled with vendors offering their best and newest products and deals, and franchisees enthusiastically obliged them by placing orders on the spot. The trade show also featured a raffle with wonderful prizes, including a BMW X1 grand prize giveaway!

The 46th Annual Convention and Trade Show has already been scheduled for August 7-10, 2022 at the Gaylord National Resort and Convention Center in National Harbor, Maryland. Check Avanti and the NCASEF website in the coming months for more details.

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Make Plans To Join Us!

The NCASEF 46th Annual Convention & Trade Show Gaylord National Resort & Convention Center National Harbor, Maryland

August 7-10, 2022

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Our Unity Is Our Strength

BY JAY SINGH | C H A I R M A N , N C A S E F ; P R E S I D E N T , S O U T H T E X A S F O A

We are now several weeks past our 45th Annual Convention and Trade Show, and I must admit I am still feeling energized by the show of solidarity and camaraderie displayed by franchisees during the four-day event. Despite the spread of the COVID-19 delta variant and a labor shortage that is forcing many 7-Eleven franchisees to work countless of extra hours, we had 714 franchisee attendees representing roughly 1,800 stores, and 475 vendor participants representing 75 companies. That is not a bad turnout, considering the circumstances.

By all measures, everyone had a fun and productive time. For the family there was plenty of entertainment, including games during the Opening Night Reception for the kids and young at heart, an indoor water park in the Gaylord Palms Resort, fine dining and dancing on the Charity Auction Night, and trip to the Kennedy Space Center.

For franchisees there were three days of seminars facilitated by the NCASEF officers, our General Counsel Eric Karp, and special guest Keith Miller, the founder of Franchisee Advocacy Consulting and a Subway franchise owner who provided an update on the Fair Franchising legislation making its way through Congress. Also presenting were Thomas Bunting of Reynolds Marketing Services, who spoke about the importance of fighting legislation that affect tobacco sales, and Alley Capatosto of New York Life Financial Services, who presented tips on how to attract and keep quality employees by offering certain benefit packages.

Capping off the convention was the Grand Banquet featuring distinguished guest speaker, FTC Commissioner Rohit Chopra. Commissioner Chopra assured the audience that the FTC is working around

the clock to change the fed“Grand Banquet guest speaker Commissioner eral franchising rules to betChopra assured the audience that the FTC is ter protect franchisees, and I working around the clock to change the federal believe we could soon see the playing field leveling under franchising rules to better protect franchisees.” the current FTC administration.

Of course, there was also the main event of our convention—the two-day trade show.

The Gaylord Palm’s convention center was filled with exhibitor booths showcasing the latest products and deals from our valued vendors, and franchisees were eager and more than willing to take advantage of their exclusive offers by placing orders on the spot. The trade show was truly a win-win

for all involved. I would like to extend our sincerest gratitude to all the exhibitors and the Major Sponsors for their participation and their generous support.

Although our annual convention offers franchisees a good mix of business-building opportunities with time to sit back, relax and enjoy a small vacation with their families, it also emphasizes the importance of unity. Operating a 7-Eleven store has never been as difficult as it is now. From the employee shortage to the new ASI 2 accounting system, “ Despite the spread of the COVID-19 we have a myriad of internal and external delta variant and a labor shortage that factors affecting our is forcing many 7-Eleven franchisees businesses that are to work countless of extra hours, we had quickly turning into roadblocks. Togeth-

a great turnout for our convention.”

er as a group we stand a better chance of resolving these issues and of getting a seat at the table when our franchisor develops new programs or a new agreement.

I have stressed many times before in my Avanti articles the importance of joining and becoming an active member of your local FOA. Your FOA not only serves as a great networking apparatus where you can meet other franchisees to exchange ideas and knowledge, but it is also where you can go to get support for problems you may have in your store or help in dealing with SEI management. Your FOA leaders and NCASEF officers are always hard at work on finding solutions to our store issues. At the end of the day, SEI and franchisees want the same thing: to elevate the 7-Eleven brand and make our stores as successful and profitable as possible If you are not a member of your local FOA, I strongly encourage you to join.

We have a special section in every issue of Avanti entitled “Join Your Local Franchise Owner’s Association Today” that provides step-by-step instructions on how to do so. Our strength lies in our unity because Franchisees ARE the Brand!

JAY SINGH CAN BE REACHED AT

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Buckle Up—This Ride Is Going To Last A Bit Longer The Question Is, Will We Still Be On When It Ends?

BY M I C H A EL JORGE N SE N | E XECUTIVE VICE C H AI R M AN, NC AS EF ; P R ES I D ENT , C ENT R AL F L ORI D A F O A

It seems every other headline in the news these days is about the tight labor market, and for good reason. Our country is experiencing a severe employee shortage, and it’s having a particularly heavy impact on the retail industry. According to a recent report by the U.S. Department of Labor, there are now more job openings than people seeking work—about 9.8 million job vacancies versus approximately 8.7 million potential workers as of July 16.

Needless to say, the competition among retailers for these workers is stiff.

Many are not only offering starting wages of $15 per hour or more, but also signing bonuses of $500+ and benefits like health insurance, paid vacation and sick days, and college tuition assistance. Smaller retailers lacking the deep pockets to offer such perks are instead compensating by reducing their hours of operation, thus reducing their need for workers. Unfortunately, with all the bigger retailers like Walmart, Target and Amazon offering hefty starting pay, $15 per hour is becoming the new “reservation wage,” known as the least amount of money a person would consider for a certain type of employment.

Obviously, not all 7-Eleven franchisees can afford to pay this wage rate.

And, although SEI allowed stores to close overnight during the pandemic for labor shortage reasons, it appears the company is not going to make it a permanent option for franchisees with staffing issues.

So what other solutions are available to us?

One obvious answer is for SEI to take a smaller piece of the graduated gross profit split.

The 7-Eleven franchise model is unique in that we have to split our gross profits with corporate. As sales increase, profits increase, and so does our royalty to SEI. There are no provisions in our agreement with SEI that would allow us to offset these increased salary demands with autonomy, like reducing store hours. But allowing us to keep a larger

“Obviously, not all 7-Eleven franchisees can afford to pay a $15 per hour wage rate.” portion of our gross profits will help put more money into our payroll so we could afford to attract and keep reliable employees. True, SEI has Hire Right and other staffing resources available to franchisees, but at the end of the day, even when we do interview the people we find on Hire Right, what they expect in pay is a lot more than what stores can afford to give.

“ Needless to say, the competition among retailers for these workers is stiff. Many are not only offering starting wages of $15 per hour or more, but also signing bonuses of $500+ and benefits.”

The fact is, we can’t keep up. It’s just money right out of franchisees’ profits. It’s understandable if you’re running your own independent mom and pop business and you can make whatever adjustments you want to compensate for your higher payroll. But when you have to sell more merchandise to make up the difference in your payroll and your franchisor gets a bigger cut of those sales, is like trying to roll a boulder uphill.

By the time you read this article, the minimum wage in Florida, where I live and operate my stores, will have increased from $8.56 per hour to $10. Currently, 29 states have a minimum wage higher than the federal rate of $7.25 per hour.

In two of my stores combined, from January 1, 2020 through March 31, 2020, the average hourly pay of my employees was $10.98. From April 1, 2020 though May 26, 2020—at the height of the pandemic shutdowns—the average hourly rate was $11.90 due to the extra “hero pay” I was giving them. From January 1, 2021 through March 31, 2021 the average pay rate was $11.72, and from April 1, 2021 through May 26, 2021 the average hourly rate was $11.99. For August of this year, the average hourly rate is $12.26.

If I average 260 hours a week in payroll at a $1 increase, this will bump my payroll up $260 a week or $13,520 a year, or $1,127 month. Three hundred hours a week with a $1 increase will bump my payroll expenses by $300 week or $15,600 a year, or $1,300 month. This doesn’t include managers, whose pay is also increasing.

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per hour, I would also have to increase the hourly wage of my existing employees accordingly. How would this even be possible without help from our franchisor?

To date, SEI has yet to communicate how it intends to adjust its systems for this dramatic change in wage requirements.

There was a Minimum Wage Committee on the NBLC as far back as 2016, which was eventually changed to the Store Profitability Committee. There was certainly a concern at the time, enough to dedicate a committee to examine salaries in the cities that led the way to increased minimum wages such as Seattle, San Francisco and Los Angeles.

Although there was much discussion, information gathering and sharing of the effects of different strategies to approach what were deemed “ultra high minimum wage areas,” the focus of the committee changed.

We all know that with the 2019 Agreement the GGPS became GGPS-OS. While it is becoming much more operationally chal-

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lenging, especially in the last “ But allowing us to keep a larger year and a half, there has been portion of our gross profits will little communication from SEI that they understand the effect of help put more money into our the necessary wage increases on payroll so we could afford to attract franchisee net income, nor that and keep reliable employees.” they have any concrete plans to address the issue.

Ultimately, what they should do is cent, the lowest in decades and gave them make an allowance for taking a lower cut confidence to start pushing back.” of the in-store sales because it will be some By all indications, this labor shortage time before we are going to see a return problem isn’t going away anytime soon, to minimum wage workers in our stores. and our new reality will be a $15 per hour This quote from a recent Time Magazine starting wage. If we want a state-of-the-art article states it best, “It’s too soon to tell if convenience store business, and we want this is just a characteristic of an economy things to run smoothly and effectively, suddenly reopening and leaving employers then we need the ability to properly comscrambling for workers, or whether these pensate our people while maintaining our changes will be permanent. There were by store net income. signs, however, that workers were losing MICHAEL JORGENSEN patience with years of low pay even before CAN BE REACHED AT 347-251-1828 or the pandemic. The rock bottom unemployjorgensen.ncasef@gmail.com ment rate in November 2019 hit 3.5 per-

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Time For Transparency

BY ER I C H . K A R P, E SQ . | G E N E R A L C O U N S E L T O N C A S E F

The single most important ingredient in the recipe for success is transparency because transparency builds trust.

These are the prophetic words of Denise Morrison spoken in 2017 as the CEO of Campbell Soup Company, who radically changed the culture of the enterprise by emphasizing ingredient transparency. She was at the cutting edge of the philosophy that if customers know where their food comes from, they will trust the product more and thus buy more of it. She even created the website https://www.whatsinmyfood.com.

Her approach transformed the company and not incidentally, doubled its stock price.

Since January 1, 1979 every franchisor in the United States has been required to furnish a franchise disclosure document (FDD) to a prospective franchisee. This document must contain a substantial amount of information regarding the franchise opportunity. The goal of the FDD is to allow the prospective franchisee to make an informed decision about whether or not to invest. The document must be complete and accurate in all respects. In this respect, the FDD is about selling a product, in this case a franchised business. But the principles of transparency and trust advanced by Denise Morrison with respect to canned soup applies with equal force to the sale of a franchise.

This summer, the National Coalition conducted a survey of franchisees in the system resulting in responses from franchisees who own more than 1,100 stores. Seventy-one percent of the respondents said they had been franchisees for at least 10 years. More than three-quarters of franchisee respondents disagreed with the statement, “7-Eleven trusts its franchisees. The same percentage of respondents indicated they do not trust SEI. When asked if they thought SEI executives were honest and ethical, 74 percent disagreed. For comparison, in the National Coalition’s 2018 survey of franchise owners, 64 percent disagreed with that statement.

What has 7-Eleven, Inc. learned from the visionary corporate executive, Denise Morrison? Is the company transparent with its prospective and current franchisees and does it aspire to be trusted by them? When it comes to information provided

to existing and prospective franchisees, the answer is sadly, not very much.

Here are some specific examples.

In 2018, we wrote to the United States Federal Trade Commission to inform that agency that the financial performance representations (FPR) in Item 19 of the FDDs of SEI were incomplete and misleading. Those FPRs included what the franchisee could be expected to assume was a complete profit and loss statement for the stores in a specific market. The FPR provided components of sales and the franchisees’ gross income after the gross profit split with SEI. It also provided a

total of average selling expenses and general and administrative expenses, but failed to do the math by subtracting those expenses from the gross income.

In the case of the bottom third of the performers in one particular market, the FPR indicated that the franchisees’ average gross income was $208,903 and the total average selling expenses were $161,881, which would seemingly represent average net income to (and before compensation to) the franchisees of $47,022.

However, the FPR went on to state that franchisees reported other general and administrative expenses with a high of $81,641, a low of $75, and an average of $12,581. As can be seen from the foregoing computations, the high end of the administrative expenses would put stores in the bottom third in the red by more than $34,000, before any payment or compensation to the franchisee owner.

We also pointed out the FPR contained three lines for store manager payroll, bonus and taxes, but no information regarding compensation for that essential position. Each of

“ For many years we have been able to discern the national average franchisee gross margin, not because SEI was disclosing that information as part of its FPRs. Rather, we were able to glean that information from the notes to the audited financial statements of SEI which are also part of the FDD.” the lines was listed as a zero. The expenses presented were thus grossly misleading because no store can act without at least one manager.

Did SEI respond by remedying these defects and providing a full, complete and thoroughly transparent average profit and loss disclosure? Did SEI dispute the accuracy of our observations and conclusions? To the contrary, it dispensed with providing the kind of profit and loss statements that it had disclosed for many years and replaced it with disclosures limited to total sales, gross profit and gasoline commissions for a particular market. In the context of a system where gross profit appears to be on a downward slope and employee wages are trending in the opposite direction, many franchisees are rightfully complaining about declining profitability. In that circumstance, it is deeply troubling that SEI did not opt for transparency but for opaqueness, eliminating all disclosures relating to net profit.

Unfortunately, SEI has chosen the same path with respect to what it chooses to report about franchisee gross margin. For many years we have been able to discern the national average franchisee gross margin, not because SEI was disclosing that information as part of its FPRs. Rather, we were able to glean that information from the notes to the audited financial statements of SEI which are also part of the FDD. One of those notes routinely disclosed the total of all franchisee merchandise sales, cost of goods sold, and franchisee gross profit continued on page 32 J U LY | A U G U S T 2 0 2 1 AVANTI

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Time For Transparency continued from page 29 dollars, from which we could compute gross profit as a percentage of sales. Here is one example of that information taken from the 2018 franchise disclosure document.

From those same audited financial statements, we were able to compute the gross margin achieved by companyowned stores with data taken directly from the profit and loss statements. This led us to make two important observations. First, the gross margin of franchised stores as reported by SEI consistently outperformed corporate stores. Second, franchisee gross margin was on a downward trend. For example, franchisee gross margin in 2012 was 36.24 percent but by 2018 had dropped to 35.32 percent. The only year between 2012 and 2018 that year-over-year franchisee gross margin did not go down was 2016. At the 2021 National Convention, we presented the following slide which shows the comparative gross margin of franchised and company stores for 2012 through 2020.

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You may notice that this slide contains no data for franchisee gross margin in 2019 or in 2020. Instead, a question mark appears in the spaces where that data would be recorded. The reason for this is that SEI’s audited financial statements no longer contain information regarding franchisee gross margin. While we have no direct evidence that the absence of that information is the result of direction by SEI to its independent auditors, we will let individual franchisees make their own judgment of why that information is suddenly no longer available.

A clue to the SEI motivation for doing so can be found in disclosures made by its publicly held parent company regarding so-called blended gross margin of both company-owned and franchised stores.

As illustrated by the following slide, the blended gross margin of the system for 2020 was just 34.1 percent, the lowest gross margin since at least 2006 and possibly in the entire history of the system. On top of

Time For Transparency that, the parent company has projected a further decline in blended gross margin to 33.7 percent in 2021. Our approximation is that a 1 percent drop in gross margin translates to a loss of approximately $177 million of gross margin.

SEI’s response to perfectly legitimate complaints from franchisees regarding gross margin and profitability are met with the statement that since SEI shares the gross profit with its franchisees, it is highly motivated to increase that gross margin. While this statement has superficial appeal, the fact is that SEI has for many years been transforming itself into more of a gasoline company than a convenience store enterprise, illustrated by the fact

that in 2020, only 10 percent of its gross revenue came from its share of that gross profit split, with nearly 60 percent of its revenue derived from gasoline sales. These figures do not include the locations acquired in the Speedway transaction, which closed in May of 2021. At this point, we calculate that 62 percent of all locations in the system have gasoline.

Finally, the gross profit associated with fresh food and hot food has been the subject of much discussion over the last several years. In its briefing to shareholders, the parent company of SEI described its Medium Term Plan as including increased collaboration, joint product development, and other measures to create a single team between the United States and Japanese 7-Eleven stores.

The most recent data continued on page 34

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Time For Transparency continued from page 33

available indicates that the Japanese stores drive nearly 30 percent of their revenue from fast food and about13 percent from daily food. The U.S. stores on the other hand derive just 12.5 percent from fast food and 4.3 percent from daily food.

But the Japan 7-Eleven stores report that their gross margin on processed food is actually higher than it is for fast food or daily food.

One of the specific goals of the Medium Term Plan is to increase the revenue from fresh food in the United States to 20 percent. If the experience of the United States franchisees mirrors that of those in Japan, this will result in a decrease of gross margin, without considering the fact that the labor associated with selling fast food and daily food is much higher than that for processed food.

None of this information can be found anywhere in the FDD. It is indeed unfortunate that the National Coalition has to play detective to find a fraction of the information that a company dedicated to transparency and building trust would provide on a regular basis.

ERIC KARP CAN BE REACHED AT

617-423-7250 or ekarp@wkwrlaw.com

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move away from selling traditional cigarettes, reported BBC News. In March, BAT took a stake in Canadian medical marijuana maker Organigram. It also signed a deal to research a new range of adult cannabis products, initially focused on CBD. • CVS Health announced it is making a significant investment in its employees by raising the minimum enterprise hourly wage to $15 an hour effective July 2022. The company said the new wage structure incorporates additional increases beyond the enterprise minimum, with higher starting hourly rates for roles such as pharmacy technicians and call center representatives. • The worst frost to strike Brazil’s coffee-growing region in more than 25 years is set to cut a chunk out of next year’s crop, sending prices of the bean to six-year highs on global markets and threatening to drive up costs at cafes and breakfast tables around the world, reported the Wall Street Journal. • Supermarket giant Aldi recently launched a new chain of convenience stores in Australia, reported News.com.au. Called Aldi Corner Store, it is the first time in that country that the German company has operated under a format that differs from its standard supermarket.

• Dollar General said it expects to offer produce in continued from page 40

NATIONAL COALITION DEMANDS THAT SEI FIX ASI 2 BUGS IMMEDIATELY B Y T O M AY R E S, | W I T M E R , K A R P , W A R N E R & R Y A N , L L P

In June 2021, SEI rolled out its Accounting System Improvement 2 (ASI 2) to replace its 40-year-old mainframe computer.

Although SEI called it an “improvement,” it was anything but because many franchisees have complained about malfunctions and grossly inaccurate reports. The monthly financial statements contain multiple errors and results that are so far removed from reality that they cannot possibly be true. Worse still, many franchisees have been coerced into making equity payments based on inaccurate statements of month-end equity.

In response to this system-wide problem, the National Coalition’s General Counsel prepared an extensive demand letter to SEI in conjunction with outside litigation counsel and retained a nationally prominent expert in retail store software accounting systems to assist in understanding the nature and scope of ASI 2’s problems. In the spirit of cooperation and transparency, on August 20, 2021, the National Coalition demanded that SEI take the following steps before the end of the year: 1. No booking of audits above $5,000; 2. For audits already booked, pay money back to franchisees until review process is complete; 3. Suspend all demands for equity contributions; 4. Conduct weekly videoconference calls to monitor progress; and 5. Include National Coalition expert and Officers in the monitoring and review process.

At present, an undetermined yet substantial portion of the financial results reported to franchisees are riddled with errors. These cal-

culations necessarily implicate the accuracy of to pay substantially SEI’s financial reporting because its share of all expenses of that the gross profit split as recorded by ASI 2 is not business.

The accurate. Accordingly, part of any solution go- franchise agreeing forward will require close cooperation with ment obligates SEI’s independent auditors to assure all stake- SEI to undertake holders that SEI’s 2021 financial statements these bookkeeping and accounting functions, and to provide fairly represent the results of operations.

In the letter to SEI, the lawyers pointed monthly financial summaries to franchisees. out over three dozen separate problems re- The National Coalition maintains that SEI ported to the National Coalition, including must therefore fulfill its obligation by delivertechnical issues with the 7-Eleven and 7Now ing complete and accurate financial reporting apps, inconsistencies between information of the results of the operation of each store.

Before SEI made ASI 2 available to apin the purchase summary report and the DMR, delayed processing of billbacks and proximately 4,000 stores in March 2021, it scanbacks for cigarette products, delayed designed and tested the system by concentransmission of store orders to vendors re- trating on company-owned locations and sulting in delivery delays, etc. stores outside of the United States. SEI was SEI effectively treated under enormous pres“ In the letter to SEI, the sure to proceed with the its franchisees as test subjects in a vast and irresponlawyers pointed out over rollout even though the sible experiment that has system was not ready, three dozen separate caused massive dislocation, fearing a delay which problems reported to the would impact its Capidistraction, and damages. tal Expenditures budget Since 2006, SEI has expendNational Coalition.” ed $28.3 billion in 39 M&A and its depreciation detransactions, yet failed to devote adequate ductions, as well as the projected annual human and financial resources to the design savings of more than $3 million from the and implementation of ASI 2. Nevertheless, decommissioning of the mainframe comthe National Coalition seeks to work with puter. The ASI 2 rollout coincided with SEI to achieve a rapid and complete solution other SEI initiatives that diverted attention to this debacle and fair recompense to its and resources and reduced the effectiveness of the system’s deployment: the rollout of member franchisees.

While SEI may describe itself as a con- 7BOSS and the purchase of 3,600 Speedvenience store and gasoline retailer, its core way locations (and the later divestiture of function in relation to its franchisee commu- 293 locations to three separate buyers). nity is bookkeeping, accounting, and finan- Given the number of problems in the cial reporting. first 90 days, ASI 2 may never live up to the Each day, every expectations created by SEI and may need “ The National Coalition’s General Counsel prepared franchisee in to be scrapped altogether. an extensive demand letter to SEI in conjunction the system en- If you have any questions regarding this with outside litigation counsel and retained a trusts SEI with article, you can call or email me. nationally prominent expert in retail store software the cash receipts TOM AYRES of its franchised accounting systems to assist in understanding the CAN BE REACHED AT 617-423-7250 store and the or tayres@wkwrlaw.com nature and scope of ASI 2’s problems.” responsibility J U LY | A U G U S T 2 0 2 1 AVANTI

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40 IS THE NEW 35 B Y AR F AN “ AR T ” F AR O O Q I BOARD MEMBER, CENTRAL FLORIDA FOA

Our industry has always been a bell ringer for the “average Joe”—the first businesses to respond to the needs of our community, and the quickest to set the trends in retail. As such, our enterprises need to have the financial strength and dexterity to maintain our business operations. This means we have to make a profit above and beyond the expenses and costs. As change is inevitable, we are in a crisis of a different kind—we are in a labor shortage tsunami. The available human capital supply for retail industry is shrinking. True to the laws of supply and demand, when a resource becomes scarce, the cost goes up.

Our industry, and particularly our 7-Eleven franchises, are asking so much cerebral work from our staff on a daily basis.

We have become the universal store for all needs. Do you need fuel? We got you. Do you need a money order at 2:30 a.m.? Come on in! Forgot to go grocery shopping for breakfast? Stop in and grab milk, eggs, bread, and cereal. Need to load your prepaid debit card?

We handle those, as well. Plus, while you are here grab a large freshly made pizza and some chicken wings! All this convenience for the customer comes at the expense of the labor to operate a 24/7/365 business.

As an industry leader, 7-Eleven has some of the highest gross margins around. However, due to our unique gross profit split model, most franchised stores do not have the supersized bottom line to match. In 2019, our average store gross profit percentage across the nation was about 35 percent. Even though we have had great sales growth as the economy recovers from the COVID-19 pandemic, our bottom lines are shrinking as expenses slowly increase and more costs are shifted towards the franchisee side of the ledger. Add to this the reduced share of the profit split afforded to us by the 2019 franchise agreement, and it is easy math to see how all this has eroded the vast majorities of

franchisees’ net income.

Our pain is still increasing with no relief in sight. The tight labor market has pushed the large employers like Amazon, Walmart, and Costco to increase their starting pay as high as $32 per hour, plus add in signing bonuses and it is easy to see the reason why we have reduced number of applicants willing to take a complex job like a 7-Eleven Sales Associate at the limited pay we are able to offer. In my area of Florida, even McDonald’s has increased their starting pay to $14.50 per hour, and some hard-pressed locations are also offering $200 signing bonuses. A few months ago, one McDonald’s franchise owner group was offering $50 just to show up for an interview! The point is, we have a tough road ahead.

So, what is the solution? Increased automation? Change the terms of the 7-Eleven franchise agreement? Or simply exit the business? All these choices are good places to search for answers, but the truth is we are years away from the type of technology needed to automate most of the retail c-store operation. Changing the terms of the 7-Eleven franchise agreement is also a long and wishful journey.

Exiting is an option; many older store operators have decided to do this and are selling when lucky or simply handing back the keys to 7-Eleven and walking away with nothing.

But there is another solution: we could increase our gross margins to cover the increasing costs and expenses. Yes, we have to talk about this subject. I know, you don’t

" As an industry leader, 7-Eleven has some of the highest gross margins around. However, due to our unique gross profit split model, most franchised stores do not have the supersized bottom line to match.” want to lose sales and customer counts. I get it. However, hear me out ...

Everyone is aiming for our customers, and I mean the customer that wants convenience. Dollar stores are adding beer and tobacco to their offerings, grocery chains are marketing “quick checkout” in every ad, and Amazon is advertising delivery in as little as one hour. Even the pizza guy now sells you a 2-liter soda with your pie. However, instead of losing sales to these competitors, 7-Eleven has had record same store sales growth. We are the market leaders in convenience. Our stores have the loyalty of so many customers because we are so focused on the guest experience, and we are in our stores daily to make them better. We need to harness this part of our business and charge enough to cover the needs of the store—we have to raise prices, slowly, to get us from the 35 percent range to above 40 percent. After all, our suppliers raise their prices all the time. In 2020 alone there were 9 to 11 cigarette and tobacco price changes. If Altria and RJR can increase their prices to protect their margins, continued on page 38 J U LY | A U G U S T 2 0 2 1 AVANTI

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40 IS THE NEW 35 why should we average only a 10 percent category margin?

There are many factors to consider when planning an increase in prices: Rule #1: Do it slowly. Do not raise the price more than 10 percent at any one time.

However, 5 percent on most items would be best. Then watch the customer adjust to this increase for 30 days, give or take. Then add an additional few cents per item as needed to get the total category margin above the gross profit percentage desired. You should not expect a dramatic change in total store gross profit percentage. Your margin will increase over the course of several months as you change and manage each category to slowly improve your store’s rolling 12-month total profit margin.

Rule #2: Try to reduce cost whenever possible. If you need to stock up on a popular item such as imported beer, investigate the (QD) discounts available from your beer wholesaler. Sometimes simply adding 2 to 3

continued from page 37

“ The current month’s GP calculation that is shown on the DMR is a reflection of that month’s GP from purchases, NOT items sold to date.” weeks of inventory can save you up to a $3 discount per case. If you can buy a shipper of candy and get an 8 to 12 percent discount, do it!. All these small “coupons” add up to the increases needed to add the required category GP growth.

Rule #3: Understand the way GP is calculated in the 7-Eleven Retail Inventory Method. Your month’s GP is calculated when you purchase the inventory, not when you sell it.

Yes (you are not alone in your confusion), your GP is added and calculated when you purchase and add the item on your book inventory for that month. If you purchase high GP items, you will have a high GP for the month, whether or not you sell those items that month. Yes, I know you need to re-read that last sentence to understand it.

Go ahead, I will wait for you to catch up.

The current month’s GP calculation that is shown on the DMR is a reflection of that month’s GP from purchases, NOT items sold to date.

Rule #4: Push the discount promos and raise the single item price. In the vault there are several promos during the summer that are standard seasonal promotions, like Gatorade, Nestle 1-liter water, or Red Bull 12oz. All these items are sold roughly 70 percent on promo and 30 percent single. If you increase the price of the single item 10 percent but maintain the promo offer, you will increase the pool GP in your item about 2.5 percent. (This is an example not taking into account any rebates, billbacks or scanbacks.)

To get to the magic realm of 40 percent+ GP, this type of strategy will be necessary to be undertaken in each category.

If we want to be able to recruit, train, and employ enough staff to maintain the high standards of our brand, we have to compete for those labor resources by offering competitive pay and benefits. The only option available to us to achieve this is the control we have over our retail prices. We have to start thinking that 40 percent is the new 35 percent.

ARFAN “ART” FAROOQI

CAN BE REACHED AT 813-786-1895 or

dhsenergysales@gmail.com

Avanti Is Your Magazine

Avanti Magazine was created in 1981 by franchisees, for franchisees.

It represents your voice within the 7-Eleven universe and requires your participation to remain relevant to the ideas, information, and knowledge floating about the franchisee community. You can contribute to the success of Avanti Magazine by submitting any of the following: > Articles on any 7-Eleven topic that may be of interest to other franchisees. > Your FOA events and Board meeting calendars. > FOA event photos with a short description (who, what, where, when, and why). > Store or community event photos with captions. > Any combination of the above.

Please send your submissions to avantimag@ncasef.com.

As former National Coalition Chairman Bill Schuessler famously said,

“None of us is as great as all of us together, so let’s stay tightly knit together.”

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WORKERS’ COMPENSATION CLAIMS PROCESS & COST CONTROL B Y JO H N H AR P , CSP , AR M — R I S K E N G I N EE R I N G C O N S U L T A N T MITSUI SUMITOMO INSURANCE GROUP

When an injury happens to one of your employees, the actions taken by you as the employer can greatly assist your workers’ compensation carrier in managing lost time and claims costs.

The initial information you provide your insurance carrier will help them in determining whether the injury was caused by work and is a viable claim. And your early actions ensure the employee receives prompt and effective medical care, reducing the likelihood of a frustrated employee that may reach out for an attorney.

These are the key factors in managing a workers compensation claim: 1. Employee Notification—Employees should be informed at hire and periodically after, that you or your manager needs to know about any possible work injury within 24 hours. This shortens the report time to the insurance company and helps control injuries that might not be from work.

2. Get the Facts—Gather all the details you can, including When, Where, What were they doing, and Who might be a witness. Depending on severity, is surveillance footage available?

“ Your early actions ensure the employee receives prompt and effective medical care, reducing the likelihood of a frustrated employee that may reach out for an attorney.”

3. Direct or advise the employee about medical care. Find out if your insurance company offers a 24/7 telemedicine option. Depending on the severity of the injury, an urgent care or occupational clinic is the next most efficient and cost-effective option. In many states, you can direct the care. If you can’t, support the employee with local treatment options. Know your preferred medical provider before an injury occurs.

4. Report the injury to your insurance company within 72 hours. Most carriers have multiple options for reporting including phone, fax, email, or online. Know the contact information before a claim occurs.

5. The claims adjuster will need information about the employee’s work history, payroll, and other facts. The quicker the adjuster has these details, the more efficient the claim can be handled.

6. Attempt to accommodate restrictions. Work with your claims adjuster, medical clinic, or nurse provider to bring the employee back to work as soon as possible by working with any restrictions.

The average cost of a lost-time case is now $55,000.

no policy limit nor excluded treatments.

The goal of workers’ compensation is to use any “reasonable” care to treat the injury and return the employee back to work.

Also driving up costs is the continuing advances in medical treatment, especially for catastrophic injuries. Years ago, a gun-

“ Remember, the SEI Hotline is not how to notify your insurance carrier.”

Reasons For Increasing Cost There are several reasons for the steady increase in workers’ compensation injury costs. First, it’s important to consider that, unlike group health or Medicare, there is

shot wound could frequently result in a fatality. Now with rapid medical response and advanced treatments, lives are being saved.

The other factor in a claim cost escalating is the time from the injury occurring to a report submitted to the insurance company. This “lag time” has a large influence on the chances of an employee seeking an attorney and general costs in lost time and medical treatment. In this study and others, costs can be expected to increase at least 6 percent if reported after three days, and 40 percent if reported after 15 days.

Lag Time Management Tips 1. Inform your employee at hire and periodically after to report all injuries before the end of the work shift.

2. Remind and post information about timely reporting.

3. Make sure your managers know what to do.

4. Make it easy—Check if your insurance company has a telemedicine option.

The Claims Process Once your claim is received by the insurance company, a file is created continued on page 40 J U LY | A U G U S T 2 0 2 1 AVANTI

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WORKERS’ COMPENSATION CLAIMS PROCESS & COST CONTROL continued from page 39

and a claim number is assigned. Depending on the extent of the injury the claim may be kept in the medical-only department or if the claim has possible medical complications or results in lost time, it will be assigned to a specialized adjuster.

The claims adjuster will review the information received at intake and then need to discuss the specifics of the injury and assess whether it’s a possible claim.

The adjuster will also need payroll information and other employment details to effectively manage the claim. The sooner the information is received, the sooner the employee can be cared for and compensated, as required.

The adjuster will also coordinate billing with the medical provider since there are no out-of-pocket expenses for the employee or employer if proper procedures are followed. The adjuster is also responsible for coordinating payments to the employee if there’s lost time. It’s important to know there are various waiting periods, which is the number of days after the injury before lost wages (indemnity) benefits begin. Waiting periods vary by state and will be communicated by your adjuster in a lost time case.

The adjuster will stay with the claim and manage the process until the file is closed and all along the way it’s essential to stay in contact with them to manage the costs and help the claim to closure.

Tips for success in controlling workers’ compensation costs: 1. Injury prevention. This is the most successful tool in controlling costs.

2. A new or experienced employee should be reminded of reporting all injuries 40

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continued from page 34

“ The other factor in a claim cost escalating is the time from the injury occurring to a report submitted to the insurance company.” without fear of reprisal or discipline. Focus on the positive or lesson learned.

3. Managers should take an active role in injury prevention and after injury management.

4. Look for a telemedicine option to report injuries or provide follow-up care.

5. Find a local clinic that understands work-related injuries (your insurance company can help).

6. Document the facts after an incident.

7. Report the injury to the insurance company within three days.

8. Communicate with the employee.

9. Communicate with the Claims Adjuster.

10. Reduce lost time costs by accommodating restrictions.

11. Workers’ compensation is no fault, making it essential to manage the rules and safety awareness.

MSIG provides workers’ compensation insurance for thousands of 7-Eleven franchised stores throughout the U.S. Our risk management and claim professionals are available to help you with your risk control and claim management efforts.

Check with your agent or broker, or for more information contact:

JOHN HARP, CSP, ARM Risk Engineering Consultant jharp@msigusa.com 908-604-2951

HARRY ENGLEHART, CPCU, ARM Claim Account Executive henglehart@msigusa.com 908-647-4726

up to 10,000 of its stores over the next several years, up from 1,300 stores currently, as it moves closer to functioning as a grocer in more of the communities where it operates, reported Progressive Grocer. • Core-Mark International has partnered with Neste and Diesel Direct to reduce greenhouse gas (GHG) emissions and pollution from its operations in California, reported Convenience Store News. Powered

by Neste MY Renewable Diesel, Core-Mark’s entire California truck fleet—150 vehicles— emits no new GHG emissions and contributes to cleaner air. • A breakdown in the freight supply chain, trucker shortages, and the labor crisis have combined to create problems for retailers and restaurants. reported Business Insider. Experts said the supply-chain crisis will last well into 2022, and it likely won’t stop until we have widespread vaccination, new shipping containers, and a drop-off in demand. • In an effort to draw workers, Target is offering to cover the cost of tuition, fees and textbooks for part- and fulltime workers who pursue a qualifying undergraduate degree at more than 40 institutions, reported CNBC. It will also fund advanced degrees, paying up to $10,000 each year for master’s programs at those schools. • Walmart is testing an all-self-checkout Supercenter in Plano, Texas, the first of its kind in the Dallas-Fort Worth area, reported The Dallas Morning News. The Supercenter has 32 checkout stands, all of which remain open, and has shifted cashiers to the role of “customer hosts”to help shoppers find available registers or assist in the checkout process. • Shipping rates from China to the U.S. were on track for gradual increases, but the pandemic brought supply chain issues that reduced capacity and sent prices soaring, reported the Wall Street Journal. Daily shipping rates from China to West Coast ports have surged more than 400 percent since the start of last year, and rising consumer demand for goods and the approaching holiday shopping season are expected to drive costs even higher. • Oil giant BP recently said it would buy the majority share it does not already own in its Thorntons joint venture from ArcLight Capital Partners LLC to expand its presence in the U.S. fuels and convenience retail business, reported Reuters. The acquisition will bring BP more than 200 c-stores in Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida. • According to new research from the AAA Foundation, the average number of all daily personal car trips plunged 45 percent in April 2020 because of the COVID-19 pandemic and associated restrictions. The dip in travel moderated later in the year but remained below 2019 levels. • A new report by the National Low Income Housing Coalition reveals that full-time minimum wage employees cannot afford a continued from page 42

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PROTECTING YOUR BUSINESS AND EMPLOYEES B Y ALLE Y C APAT O S T O , FI NANC I AL S E R V I C E PR O FE S S I ON A L A G E N T NEW YORK LIFE INSURANCE COMPANY

As franchisees, you know firsthand that the loss of a key employee can have a profound impact on business operations. When an employee leaves, customers who dealt directly with that person may worry about receiving their goods or services in a timely manner; suppliers may be concerned about getting paid for their deliveries; and staff morale can also take a dip as remaining employees worry about assuming a heavier workload.

That’s why it’s important to make sure that your business is prepared to deal with the unexpected departure of a key employee, which usually happens for one of three reasons: the employee chooses to resign, the employee becomes disabled, or he or she passes away.

While life insurance cannot protect against employees choosing to leave, it is often used as a tool to help incentivize them to stay; deferred compensation plans are powerful vehicles for doing just this. Deferred compensation arrangements allow you to provide retirement income to select employees. The way it works is that you and the selected employee enter a contract that specifies the compensation you will pay out to him or her in the future. Since you may not set up a specific reserve fund in which a participant has a vested right, a life insurance policy is uniquely suited to informally finance a deferred compensation plan. The future of your business depends on attracting and retaining the right talent with the right tools.

“ The future of your business depends on attracting and retaining the right talent with the right tools.”

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“ Deferred compensation and key employee insurance are benefits that are related exclusively to your top employees.”

It’s also important to protect your business against the economic losses it may face as the result of a top employee’s death with the use of key person insurance. The way it works is that the business applies for and becomes the owner and beneficiary of a life insurance policy covering the key employee.

If the insured employee dies, the business receives the policy proceeds.

Deferred compensation and key employee insurance are benefits that are related exclusively to your top employees, but New York Life also has options that you can offer your entire team to help cultivate a rewarding work environment, such as life and disability insurance. These benefits can provide employees and their family’s peace of mind and added financial security, which can go a long way toward attracting and retaining valuable employees.

As a business owner, you’ve worked hard to get where you are today. Having a contingency in place will allow you to focus on making the best possible decisions for the future your business. To learn more about the information or topics discussed, you may contact me at 407-683-2692.

ALLEY CAPATOSTO

CAN BE REACHED AT 407-683-2692 or

acapatosto@ft.newyorklife.com

continued from page 40

two-bedroom apartment in any state in the country. The average hourly worker currently earns $18.78 per hour, the report finds. This year, workers would need to earn $24.90 per hour for a two-bedroom home and $20.40 per hour for a one-bedroom rental. • PepsiCo plans to sell its Tropicana and other juice brands in North America to French private equity firm PAI Partners for $3.3 billion as it looks to simplify its product range and move away from high-sugar drinks., reported Reuters. PepsiCo will keep a 39 percent stake in the new joint venture and have exclusive U.S. distribution rights for the brands. • A new study by B2B ecommerce platform Subscribbe found that 72 percent of Britain residents would prefer to live close to a convenience store than a pub (48 percent), park (63 percent) or a supermarket (57 percent). • Utah’s alcohol control authority reported over $517 million in liquor sales last year, setting a new record even in a global pandemic, reported Fox 13 Now. The numbers show that people didn’t stop buying alcohol when bars and restaurants were closed in the COVID-19 pandemic. • Same-day delivery giant Instacart and automation specialist Fabric have partnered to provide U.S. and Canadian food retailers with microfulfillment centers, reported Supermarket News. The facilities will use both robotic software and front-end e-commerce technology to accelerate and facilitate online grocery orders placed through the Instacart Marketplace or through a retailer’s branded Instacart e-commerce site. • The holiday season is typically a time when retailers fill seasonal posts with people in need of extra cash, but this year merchants are going into the season shorthanded and scrambling to fill vacant posts in a tight labor market, reported the Dallas Morning News. Turnover rates are soaring even as wage rates rise, and the number of job seekers is down 10 percent from pre-pandemic levels, while job vacancies have grown by nearly 70 percent. • QR codes have emerged as a permanent tech fixture from the coronavirus pandemic, reported the New York Times. Restaurants have adopted them, retailers including CVS and Foot Locker have added them to checkout registers, and marketers have splashed them all over retail packaging, direct mail, billboards and TV advertisements. • U.S. fossil fuel consumption—including petroleum, natural gas, and coal—fell by 9 percent in 2020 compared to the prior year, the lowest level since 1991, according to the U.S. Energy Information Administration. Economic responses to the COVID-19 pandemic in 2020, including a 15 percent decrease in energy consumption in the U.S. transportation sector, continued from page 47

continued from page 19

store shoppers were on government assistance of some kind, up from 25 percent pre-COVID. Ten percent of these shoppers were unemployed in September of 2020, and that number slightly increased in March of 2021. Selling to shoppers in deep recovery mode requires a different strategy than the typical “pent-up demand” marketing narrative. This shopper may be trying to resume normally after a

time of deep economic struggle and may need affordable treats instead of splurges, value instead of premium experiences.

• Travel Reduction: Fifteen percent of c-store shoppers stopped going to work during COVID, a massive reduction in trip frequency as 90 percent of U.S. c-store shoppers typically drive for their commute. About half of the shoppers that stopped going to work anticipate resum-

ing their normal commute, but almost 10 percent of pre-COVID c-store shoppers may permanently be driving less often.

As a result, brands must reconsider campaign messaging for these shoppers who kept working out of home through the pandemic.

• Anticipated Rebound: By a near 2:1 margin, shoppers that anticipated changing their post-pandemic behavior in concontinued on page 44

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NCASEF

HIGHLIGHTS

had worked more shifts than they typically work during the last 60-90 days. Nearly 50 percent reported they (or a designee) had worked at least 10 overnight shifts during the last 60 days because they didn’t have enough staff.

The National Coalition survey also asked franchisees if they are currently taking advantage of the recruitment tools 7-Eleven has made available to franchise owners. Ninety percent of respondents said they are “utilizing the recruitment tools such as Hire Right, which 7-Eleven provides.”

Further survey results show: “These tools are helpful, but franchisees are still being • Just 20 percent of respondents said “Ninety-seven forced to raise wages in order to find and retain they are able to offer a competitive percent of responhigh-caliber workers. Unfortunately, many franchiwage to their employees based on sees can’t afford to compete with other employdents said they have had their current contractual gross profit ers,” Singh said. split with 7-Eleven, Inc. The compatrouble staffing their

General Counsel Eric H. Karp said this ny’s franchise agreement requires store over the survey shows franchisees are being squeezed franchisees pay a graduated gross by the staffing crisis and the terms of their last year.” profit split in exchange for their right agreement. “7-Eleven could help its franchito operate. For some franchisees, the sees first by sharing with us their extensive portion of the gross profit split, or royalty, data on franchisee profitability in general, and can be greater than 59 percent. overnight profitability and employee expense • Ninety-two percent of respondents said they had inin particular. Then the corporation needs to agree creased their hourly pay rate over the last year and 89 to hold a collaborative and amicable meeting to find solutions percent said they have raised their hourly pay rate beyond to these intractable issues.” what is mandated by their state or local minimum wage.

With the arrival of summer and fewer coronavirus manYet, 97 percent say they have had trouble staffing their dates, more customers will be coming into 7-Eleven stores store during that same time. and other retailers. The National Coalition says its franchisees • Ninety-six percent said it has become more difficult to staff always want to offer excellent service and keep up with the their store just over the past 60-90 days. Ninety percent company’s new initiatives, like fresh food, but are struggling of respondents said they have lowered their standards for without reliable, trained associates in place. Franchisees face new hires because of the state of the labor market. the prospect of reducing their already shrinking profits to support higher labor costs—even as their store-level operat“ FRANCHISEES ALWAYS WANT TO OFFER EXCELLENT SERing expenses are increasing.

VICE AND KEEP UP WITH THE COMPANY’S NEW INITIA “We hope the Federal Trade Commission is taking note of the heavy-handed way SEI is handling this situation with its TIVES, BUT ARE STRUGGLING WITHOUT RELIABLE, TRAINED franchise owners as part of its review of the Franchise Rule,” ASSOCIATES IN PLACE.” said NCASEF Executive Vice Chair Michael Jorgensen.

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venience stores anticipated visiting the stores more often. With half of all c-store shoppers already visiting the store once a week or more, this creates a dependency upon high frequency shoppers. Therefore, to be most effective, brands should focus on engaging and positively disrupting a deeply habitual shopping trip and ensure value is stronger for regular, not occasional, shoppers.

Employers Offering Hefty Signing Bonuses As U.S. employers’ search for hires increases in urgency—especially in the manufacturing, logistics, healthcare and food-service industries—truck drivers, hotel cleaners and warehouse workers are being offered signing bonuses of hundreds and even thousands of dollars, reported the Wall Street Journal. Nearly 20 percent of all jobs posted on job search site ZipRecruiter offer a signing bonus, up from 2 percent of jobs advertised on the job search site in March. The states with the highest shares of job listings that include a signing bonus are Iowa, Missouri, Vermont, Wyoming and Arkansas. Hiring bonus offers start at $500 and

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quickly rise from there. Job post“ There are now more job openings than people ings across sectors looking for employment—9.8 million job show that a $1,000 vacancies with 8.7 million potential workers.” hiring bonus is quickly becoming table stakes in recruiting hourly workers who make between $16.50 and $25 an hour.

More Job Openings Available Than People Looking For Work Employers in the U.S. face an interesting challenge ahead—how to fill nearly 10 million job openings with about a million fewer workers than there are positions available, reported CNBC. The Department of Labor recently stated that there are some 8.7 million potential workers who have been looking for jobs and are counted among the unemployed. At the same time, job placement site Indeed estimates there are about 9.8 million job vacancies as of July 16. Companies have been using a variety of techniques, including signing bonuses, higher salaries and flexible working arrangements, to entice people. That likely will have to con-

tinue as the COVID-19 pandemic changes the jobs market, perhaps permanently, the article states.

A survey from Gallagher shows the extent to which employers are willing to go to entice workers in the pandemic era. One such enticement: 19 percent said they are offering pet insurance, a perk that is expected to rise to 27 percent of companies in the next two years. They’re also providing discount programs, legal services and identity theft protection, though 71 percent of respondents said medical and pharmacy benefits remain atop the most important added benefits they’re offering. continued on page 48

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Legislative Update Several Cities & States Raise Their Minimum Wage

Minimum wage workers in various parts of the country got a pay increase on July 1, the first day of the new fiscal year for most state and local governments, reported The Hill. The pay raises came just months after Congress failed to raise the $7.25 federal minimum wage to $15. Here are the states and major cities where higher wages kicked in:

STATES • Nevada—The state’s minimum wage rose from $8 to $8.75 for workers who receive health benefits through their employer.

Those without benefits now receive a minimum of $9.75 an hour, up from $9. Similar pay increases will continue for the next three years, when the minimum wage will hit $11.

• New York—Fast food workers outside of New York City saw their pay increase 50 cents an hour, to $15. The pay raise matches the current rate for comparable workers in New York City.

• Oregon—The state’s minimum wage rose to $12.75, an increase of 75 cents.

CITIES • Berkeley, California—The minimum wage increased 25 cents, to $16.32.

• Chicago, Illinois—Employers with fewer than 21 workers now pay a minimum of $14 per hour, while those with more employees pay at least $15 an hour.

Workers making tips now receive a minimum of $8.40 an hour, or $9 if there are 21 or more workers at the location.

• Los Angeles, California—Businesses with fewer than 25 employees increased their minimum wage by 25 cents, to $15.25.

• Minneapolis, Minnesota—Small businesses with less than 100 employees now have to pay their workers at least $12.50 an hour, an increase of 75 cents from the previous wage.

Workers at larger businesses saw hourly pay increase to at least $14.25, up from $13.25.

• Portland, Oregon—Employers in counties within the Portland metro area now pay their workers at least $14 an hour, compared with the previous rate of $13.25. Workers in “nonurban counties” saw an increase of 50 cents an hour, to $12.50.

• Saint Paul, Minnesota—The city raised wages by $2.50 an hour, from $12.50 to $15.00, for workers at businesses with over 10,001 46

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employees. Employers with more than 101 workers increased wages by $1 an hour, to $12.50. Small businesses with six or more employees raised their minimum wage from $10 to $11, while smaller employers increased wages by 75 cents, to $10.

• San Francisco, California—The city’s minimum wage increased by 25 cents, from $16.07 to $16.32.

• Washington, D.C.—The District of Columbia increased its minimum wage by 20 cents to $15.20. The annual increase was indexed to the cost of living.

Delaware Raises Minimum Wage To $15

Delaware Governor John Carney recently signed a bill to raise the state minimum wage to $15 an hour, reported Nation’s Restaurant News. The Delaware minimum wage is currently $9.25 per hour and will increase incrementally over the next four years, starting with a raise to $10.50 on January 1, 2022, followed by $11.75 in 2023, $13.25 in 2024, and $15 in 2025. The state’s last minimum wage increase was in October 2019, an increase of $1 an hour from the $8.25 wage passed in 2015.

“ DELAWARE WILL RAISE ITS MINIMUM WAGE TO $15 AN HOUR INCREMENTALLY OVER THE NEXT FOUR YEARS.” The Democrat-led state House voted along party lines in mid-June to give final approval to the bill, reported the Associated Press. Democrats approved the measure after defeating half a dozen Republican amendments, including proposals to allow small businesses and nonprofits to pay 85 percent of the minimum wage and to require the controller general’s office to submit annual reports regarding the fiscal impact of the wage increases on the state budget, and on the broader effects on the state economy. Democrats also rejected a proposal by one of their own party members to delay each of the annual wage increases for one year for businesses employing 20 or fewer workers. Legislative analysts estimate that the new law will cost taxpayers an additional $3.7 million in fiscal 2024 for state employee wages, not counting resulting salary and wage compression issues. continued on next page

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drove much of the decline.

• Tyson Foods is requiring all of its employees in the U.S. to be fully vaccinated against the coronavirus, reported Axios.

The move makes Tyson Foods the largest U.S. food company—with 139,000 team members—to require vaccinations among all its employees. • PepsiCo recently reported that its quarterly net sales surged 20.5 percent year-over-year to $19.22 billion as restaurant and other food service demand for its drinks returned, reported CNBC. • Dunkin’ is scaling back its relationship with Beyond Meat, limiting the availability of its Beyond Breakfast Sausage sandwich to just 10 states, reported PYMNTS.com. The apparent unprofitability of the partnership suggests that, despite both the growing market for plant-based options and the trendiness of the category, alternative proteins are not a guaranteed money maker. • Walgreens said makeup, passport photos and COVID vaccines drove store traffic and sales in the fiscal third quarter, reported CNBC. The drugstore chain said sales in the photo department rose 54 percent and sales of beauty merchandise rose about 15 percent compared with the year-ago quarter. The company has administered upwards of 25 million vaccines, with about 17 million given in the three-month period. • Lottery mobile app Jackpocket has partnered with Circle K to bring “21st century lottery play” to over 1,300 Circle K stores across Arkansas, Colorado, New Hampshire, New York, Ohio, and Texas, reaching a potential of over 1.1 million new customers a day. Through this partnership, Jackpocket offers will be deployed across a variety of Circle K channels. • Connecticut recently became the 19th state to legalize marijuana, reported the Journal Inquirer. Under the law, people older than 21 can possess up to 1.5 ounces of marijuana on their person and no more than 5 ounces in their homes or locked in car trunks or glove boxes. • McDonald’s is requiring that all its customers and staff wear masks again inside its U.S. restaurants in areas with high or substantial COVID-19 transmission, regardless of whether they are vaccinated or not, reported Reuters. • New research from IHS Markit shows that the average age of cars and light trucks in operation in the U.S. has risen to 12.1 years this year, increasing by nearly 2 months during 2020 and elevated by the COVID-19 pandemic. The increase in average age will further drive vehicle maintenance opportunities from an increasingly aged vehicle fleet, according to the report. • Home Depot is using Bluetooth technology to stop shoplifters from taking power tools without turning its stores into “armed continued from page 48

Legislative Update Joint Employer Rule Overturned

at their contractual relationships and consult with a labor attorney to determine if they may have exposure to possible labor related lawsuits once this rule is formally rescinded. In particular, relationships including those in which suppliers stock shelves, complete tasks such as cleaning and maintenance and or are part of other similar contracts with other companies may merit closer examination.

The U.S. Department of Labor (DOL) recently released a new rule that rescinds the Trump Administration’s “joint-employer” rule, reported NACS Online. With publication in the July 30 issue of the Federal Register, the rescission will become official in 60 days, according to the article. In early 2020, the Trump Administration issued a formal rule, supported by NACS Washington, and much of the business “WASHINGTON, D.C. HAS D.C. Bans community, that reFlavored OFFICIALLY OUTLAWED placed guidance from the Tobacco Sales THE SALE OF FLAVORED Obama Administration on how the DOL would TOBACCO PRODUCTS AND Washington, D.C. has officially outlawed the determine joint-employMENTHOL CIGARETTES sale of flavored tobacco ment relationships. That ACROSS THE CITY.” products and mendetermination is often thol cigarettes across used as the basis for the city, reported liability under employment law.

WTOP.com. Mayor The Obama Administration’s guidMuriel Bowser ance had relied on an “indirect control” issued a statement standard to establish that two employers after signing the bill, which was passed by were “joint” employers and could be the D.C. Council in June, stating, “Today, held liable for labor violations relating to we take a hugely impactful step to reducan employee. The Trump DOL wrote a ing tobacco initiation and addiction in formal rule requiring that one employer Washington, D.C.” must have and exert direct control of However, critics are worried about the employment of a worker to be held the negative impact on young people, jointly liable. In late September, the DOL who are generally targeted by compawill revert back to following the Obama nies that sell flavored tobacco, as well as Administration guidance in making communities of color. During the June such determinations, a 29 legislative session, in which the D.C. scenario under which “The DOL has Council approved the ban, one Council it will be much easier rescinded the Trump member was especially worried about the for one employer to Administration’s addition of the menthol cigarette portion be found jointly liable ‘joint-employer’ rule, of the law and predicted it could lead to a for potential labor making it easier for black market that would shape enforceviolations of another one employer to be ment by drawing in police. Other critics employer. found jointly liable said the new law, which bans the sale but Based on this for potential labor not the possession of flavored tobacco, change, NACS urges violations of would drive customers to Maryland and convenience retailers another employer.”

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Rutter’s Announces Minimum Wage Increase Pennsylvania-based convenience store chain Rutter’s recently announced a third increase to their starting wage over the past 15 months, raising it to $15.00 per hour for field employees, reported WFMZ-TV 69 News. The retailer said it continues to commit to investing in their people, increasing field wages by 36 percent since April 2020.

All Rutter’s Team Members will see a wage increase, company officials said, with fulltime team members earning over $30,000 per year. Rutter’s Store Managers can reportedly earn over $110,000 per year, and Restaurant Managers over $100,000 per year, with bonus. Rutter’s said it also offers other benefits, including multiple scholarship opportunities for employees, and their children, to continue their education.

In April 2020, Rutter’s announced additional hazard pay for store employees, with Team Members earning an extra $2 per hour and Store Managers earning an extra $100 per week. At the end of 2020, Rutter’s made the pay increase permanent, which totaled more than $6.5 million annually. With a second increase in May of 2021, Rutter’s added another $5 million to wages annually.

Target Front-Line Workers Receive Another Bonus Target once again paid front-line employees a $200 bonus to thank them for

their work over the past few months, reported the Star Tribune. In late July, the Minneapolis-based retailer announced the bonus would be awarded to full- and parttime team employees in Target stores and distribution centers as well as headquarters staff who support its customer and employee contact centers. The bonuses were paid out in August. This bonus, an investment of $75 million by Target, was the sixth paid to employees during the pandemic.

A report released last November by the Brookings Institution concluded that many of the nation’s top retail companies posted soaring profits last year, with an average of a 40 percent increase in profit. Pay for front-line workers increased an average of $1.11 per hour, or 10 percent, since the start of the pandemic. The only three companies out of the more than a dozen that the report analyzed that bucked this trend were Target, Best Buy and Home Depot, all of which the report said provided the most pandemic compensation to workers through “temporary pay increases, bonuses and permanent wage increases.” Last summer, Target permanently raised its starting wage for U.S. employees to $15 per hour. Best Buy later instituted the same increase.

Many Job Seekers Not In A Rush To Find Work A new survey by the job-listing website Indeed finds that many job seekers don’t express a sense of urgency about finding a new job, but say they are likely to pick up the search for work in the months ahead. The vast majority of job seekers want a new job in the next three months, but even among those who say their job searches are urgent, more than 20 percent don’t want to start a new position immediately. Many unemployed workers say increased vaccination against coronavirus, shrinking savings, and the opening of schools in the fall will be key catalysts for stepping up their job searches. continued on next page

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encampments,” reported Business Insider. The technology will keep the tools from working until they are activated at the point of sale. • Bitcoin Depot recently announced an exclusive international partnership with Circle K that spans across both the U.S. and Canada with over 700 Bitcoin ATMs in 30 states already installed. Bitcoin Depot ATMs are kiosks that enable users to exchange cash for cryptocurrency. Circle K is the first major retail chain to deploy Bitcoin ATMs within its stores. • Oklahoma-based convenience store chain QuikTrip recently reached a milestone with the opening of its 900th store, located in Corsicana, Texas, reported PetrolPlaza.com. The company is planning to embark into four more states — Tennessee, Arkansas, Alabama, and Colorado — within the next year. • Walmart plans to roll out robotics technology from Symbotic at 25 of its 42 distribution centers around the country, reported Winsight Grocery Business. The new system uses high-speed robots to automate the tasks of retrieval, sorting and storing, as well as to build customized pallets that will make unloading and stocking easier and more efficient. • Almost 90 percent of all beer, wine and spirits purchases in the last year were made in-store, and that number is expected to rise post-pandemic, according to new research

by ChaseDesign. Customers still prefer shopping in-store vs. online because they enjoy being in control of their experience and want the ability to browse, with nearly 40 percent saying they only purchase alcohol in-store. • According to DoorDash’s second annual mid-year Deep Dish Report, snacking orders are more popular in 2021 with an order increase in items such as glazed donuts (501 percent increase), sweet tea (284 percent increase) and sour cream and cheddar potato chips (112 percent increase). • Dollar General recently hired its first chief medical officer and will add products such as cold and cough medication and dental supplies to shelves as it aims to become a health-care destination, reported CNBC. The company’s CEO said its new push was inspired by customers who said they want more convenient and affordable health-care products and services. • A restaurant in Stockton, California is using a robot helper to serve customers as it struggles to hire workers amid the U.S. labor shortage, reported Business Insider. The robot, named Matradee, is capable of opening kitchen doors, uses LiDAR to maneuver and detect its surroundings up to 20 feet, and is equipped to carry up to four trays of food and dishes. • President Joe Biden recently signed an Executive Order that sets an ambitious new target to make half of all new vehicles sold in 2030 zero-emissions vehicles, incontinued on page 54

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Coronavirus is a major factor keeping unemployed workers from stepping up their search activity, the survey reveals.

Among the unemployed, concern about COVID-19 is the most commonly cited reason for a lack of urgency in looking for work. In the eyes of many job seekers, vaccination against the virus—for themselves, family members, coworkers, and customers—is a key milestone to be reached before they will be ready for a new job.

What’s more, unemployed workers seem more patient than they otherwise might have been thanks to the financial cushions of savings, employed spouses, and enhanced unemployment insurance (UI) benefits. Care responsibilities at home are also a big impediment to more intense job search. Thus, the widespread return of in-person schooling in the fall may spur greater intensity in the job hunt.

McDonald’s Owners Up Perks To Lure Workers McDonald’s franchisees aim to boost hourly pay, give workers paid time off and help cover tuition costs to attract enough workers to run their businesses, reported Fox Business. McDonald’s corporate parent said it is making a multimillion-dollar investment to back the franchisee efforts.

Franchisees own 95 percent of the chain’s roughly 13,450 U.S. stores. McDonald’s, one of the largest U.S. private employers with around 800,000 people working in the chain’s restaurants, is closely watched by others in the industry for its moves on pay. McDonald’s in May said it would bump up starting pay in its corporate-owned restaurants to $11 to $17 an hour and said it would keep assessing wages to be competitive.

McDonald’s franchisees last year began evaluating the pay and benefits that operators currently provide workers to figure out what may need improvement. They also surveyed current McDonald’s restaurant employees about what they’d like to see in compensa-

tion. More than 5,000 McDonald’s workers and managers participated, and franchisees found that their employees gave priority to a range of possible additional benefits, spanning enhanced pay to more workplace flexibility. After discussions throughout the year, franchisee leaders in June agreed to help boost training, workplace flexibility, pay and benefits across markets.

More Consumers Brewing Coffee At Home Last year, consumers drank approximately 44.5 billion servings of coffee, spent $2 billion on coffee makers and accessories for in-home brewing, and made 6.3 billion visits to order coffee at foodservice outlets, according to a new report by The NPD Group. The study reveals that before the pandemic, consumers sourced about 73 percent of coffee servings from home and 27 percent from foodservice. The split between at-home and away-from-home coffee consumption became 81 percent

from home and 19 percent from foodservice during the pandemic. With fewer opportunities to visit their favorite coffee shop, consumers re-created the gourmet coffee experience in their homes. Sales of espresso machines, French presses, and cold brew makers grew by double-digits in the year ending May 2021 compared to the same period a year ago. Coffee accessories, like temperature-controlled mugs and milk frother wands, also experienced double-digit growth. Sales of frothers, for example, increased by 120 percent this May compared to a year ago.

The NPD Group study also found that lockdowns and restaurant restrictions during the pandemic did impact coffee servings ordered at U.S. restaurants and foodservice outlets. In the year ending May 2021, coffee servings ordered at commercial foodservice declined by 7 percent from a year ago, and for a pre-pandemic view, it decreased by 11 percent from two years ago. Consumers also cut down on visits to their favorite coffee house and gourmet coffee chain.

Visits to these types of outlets declined by 6 percent in the period compared to a year ago, and 8 percent from two years ago. Still, coffee shops, independent and chains, have been among the strongest performing restaurant channels over the long term, and as the country emerges from the pandemic, visits improve.

Get On The Avanti Mailing List!

Are you a franchisee and would like to receive your own copy of Avanti—The Voice of 7-Eleven Franchisees? You can get on our mailing list by sending a request to avantimag@ncasef.com with your name

and store address, and we’ll be sure

to include you in future mailings.

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SEI TO OPEN STORES IN MYRTLE BEACH, S.C. 7‑Eleven is moving into the Myrtle Beach, South Carolina market with at least three new stores and the company’s recent acquisition of the Speedway chain of convenience stores, reported The Sun News.

There are nearly 20 Speedway stores combined in Horry and Georgetown counties, and there are currently no 7-Eleven stores in Horry County. The three new locations that are either under construction or are scheduled to soon be built are located in Murrells Inlet, in Conway, and in Myrtle Beach. It is unclear if the area Speedway stores will be rebranded with the 7-Eleven name and business model.

NEW STORE FEATURES LAREDO TACO COMPANY & RAISE THE ROOST SEI recently debuted Tennessee’s first new-build store in the town of Murfreesboro, south of Nashville, and it is the very first to feature the company’s two most popular restaurant concepts—the Laredo Taco Company and Raise the Roost Chicken and Biscuits—under just one roof. Ad“ Tennessee’s first ditionally, the new-build 7-Eleven opening marks store is the very first the expansion to feature the Laredo of 7-Eleven’s Taco Company and footprint in the state in a big Raise the Roost way and means Chicken and Biscuits the creation of

restaurants.”

new jobs—about 40 full- and part-time employees per location. The Murfreesboro location is one of many stores opening in the greater Nashville area in 2021, five of which will have one or more onsite restaurants. While 7‑Eleven operates more than 40 stores in Tennessee, seven with Laredo Taco Company restaurants, the Murfreesboro store houses the state’s first Raise the Roost. Both restaurants are set side-by-side inside the Murfreesboro store, with separate ordering counters and shared indoor and outdoor seating.

MOBILE CHECKOUT FEATURE EXPANDED

iOS devices and is available for most 7-Eleven merchandise that has a bar code.

Some items still require cashier assistance, such as financial services and age-verified products (alcohol, tobacco and lottery tickets). The company plans to expand Mobile Checkout to all U.S. stores by the end of 2022.

SEI UNVEILS ALCOHOL DELIVERY SERVICE

SEI announced that it has teamed up with Minibar Delivery, known for their SEI recently announced that it has on-demand alcohol delivery service, to expanded its new Mobile Checkout con- bring beer and wine to the doorsteps of adult residents in select markets. The tactless shopping solution to an collaboration will kick off in additional 2,500+ stores Florida, Texas, and Virginacross the U.S. Using the “Mobile ia, where approximately 7-Eleven app, customers 600 stores are participatCheckout has been can quickly scan items ing in the pilot launch. and pay for purchases expanded to an additional The stores are primarily without standing in a 2,500+ stores across servicing the cities of Orcheckout line. The comlando, Tampa, Fort Myers, the U.S.” pany said Mobile CheckMiami, San Antonio, Dallas, out is now available in more Austin, Fort Worth, Virginia than 3,000 participating 7-ElevBeach, Richmond, Norfolk and Alexanen stores in 32 states including Washingdria, the company said. The beverage-centon, D.C. As an incentive to try Mobile tric delivery service has plans to expand Checkout, for a limited time, 7-Eleven is to additional offering 10x the rewards points for every 7‑Eleven marpurchase made using the new feature in kets later this the app. year.

SEI said 7-Eleven was the first conve Customers nience store chain to develop proprietary can log in to technology for a full frictionless shopping Minibar Deexperience from start to finish. Mobile livery’s app or Checkout works on both Android and continued on page 52

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website (minibardelivery.com) and choose from 7‑Eleven’s wide range of wine and beer to be delivered in 30-60 minutes. As a welcome offer, customers will receive $7.11 off of their first Minibar Delivery order from 7‑Eleven, by entering the promo code 7ELEVEN at checkout. 7‑Eleven’s range of beer and wine varies from store to store and includes national brands as well as the company’s own wine and beer portfolio.

WHERE NO SLURPEE HAS GONE BEFORE

The mission was commemorated with a spaced-themed mural that will mark the launch location forever. Michigan locals and Slurpee fans alike can snap a selfie at the mural in Saginaw, Michigan at 10950 Gratiot Rd., or check out photos on 7‑Eleven and Slurpee social channels.

HOT BEVERAGES TAKE CUSTOMERS ON A FLAVOR TRIP

As the end A 7‑Eleven Slurpee was recently of summer aplaunched into space, SEI announced. The proached, particiconic beverage that’s been enjoyed by ipating 7‑Eleven millions of Americans since 1966, was stores began offerofficially rocketed out of the earth’s at- ing a mini-vacamosphere on August 10 from a 7‑Eleven tion for customers’ taste buds with two store in Michigan—the Slurpee capital of limited-time hot beverages—coconut the U.S.—on a private space flight com- coffee and s’mores hot cocoa. Coconut missioned by SEI to celebrate its 94th coffee has become a seasonal summerbirthday. Throughout the month of July time favorite at 7‑Eleven stores, bringing 7‑Eleven called on Slurpee drink lovers a taste of the tropics to a freshly brewed everywhere to choose the space-bound morning wake-up cup or an all-day treat. flavor. Each Slurpee drink ordered via The sweet, creamy, and coconutty flavored brew is made with 100 7‑Eleven Delivery was counted percent Arabica beans as a vote, and Coca-Cola was and offers up toasty the big winner, with Cher“A Slurpee was light-roasted notes. ry and Blue Raspberry recently launched into Those looking for a as close runners-up. space from a 7‑Eleven store mountaintop beverage experience can in Michigan to celebrate indulge in the deca7-Eleven’s 94th dent s’mores hot cobirthday.” coa, featuring a blend of rich hot chocolate, sweet vanilla, marshmallow and golden graham flavors. These limited time beverages have unique and quality flavors, but at the cost of any other 7‑Eleven hot beverage.

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NEW SUMMERTIME SLURPEES SEI featured new fruity Slurpee flavors this summer to help customers beat the heat. Customers were able to grab each of the new options—Blueberry Lemonade Bliss, Pineapple Whip and Peach Perfect—for just $1 in small stay-cold cup at participating stores. Here’s a closer look at the summery Slurpee drink lineup: • Blueberry Lemonade Bliss—The flavor of lemonade with the sweet and sour taste of berry, this drink is made with real sugar and real juice.

• Pineapple Whip—This bright yellow Slurpee drink is a cool blend of pineapple and rich whipped cream flavors to offer a frozen tropical delight.

• Peach Perfect—Peach Perfect is made with real juice, is perfectly peachy in every way and has a light, slightly tart, refreshing taste.

WING DEALS ON NATIONAL CHICKEN WING DAY To celebrate National Chicken Wing Day on July 29, 7-Eleven offered buy one, get one free five-count bone-in wings via 7–Eleven Delivery found on the 7NOW delivery app and the 7–Eleven app. Participating 7‑Eleven stores also offered a buy one, get one free offer on boneless chicken

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wing skewers to 7Rewards loyalty members. Available in hot honey, sweet sriracha and classic breaded flavors, an order of eight wings usually costs $3. On National Chicken Wing Day, customers got double that—two skewers or 16 boneless wings— for $3. 7‑Eleven’s chicken wings come in a wide variety of flavors and all come hot and ready to eat. New to the boneless lineup are the hot honey wings, which are basted with a honey chili glaze made of real honey, roasted garlic, and chili pepper for a sweet and spicy finish.

SOUR PATCH KIDS BRAND’S FIRST MYSTERY FLAVOR & SWEEPSTAKES The Sour Patch Kids brand introduced a new flavor to 7-Eleven stores this summer, but they didn’t disclose what it is, instead leaving it up to customers to guess the new “sour, then sweet” mystery flavor in the Sour Patch Kids Sweepstakes and Instant Win Game. A winning guess could be worth $50,000 or one of almost 200 other prizes—including a camera, tablet, mini drone and a detective pack to solve the next big case. While the mystery flavor could be found in mixed flavor packages elsewhere, 7‑Eleven was the only place to score a

Mystery Kids flavor-only package of Sour Patch Kids candy.

The Sour Patch Kids sweepstakes and instant win contest ran through August 15. Details on how to enter was available on the back of specially marked packages. Clues could be found on packages and were posted weekly on the Sour Patch Kid’s social channels—Twitter, Instagram, and Facebook. Mondelez International’s Sour Patch Kids is the No. 1 sour candy brand and a top-selling candy at 7‑Eleven stores.

INTRODUCING PLOT + POINT WINE SEI introduced a new wine this summer: Plot + Point. Available in two popular varietals, chardonnay and pinot grigio, Plot + Point Wine is packaged in a Tetra Pak container featuring a screwcap top that makes it easy to pack and sip. The medium-bodied chardonnay has aromas of green apple, pineapple and a touch of oak and the pinot grigio varietal is light and crisp, with notes of citrus and flavors of ripe apple and juicy peach. Each California vintage has an ABV of 12 percent to 12.5 percent and is available at participating 7-Eleven stores. Customers can find 500 mL of Plot + Point Wine chilled in the cooler or on shelves.

Alternative packaging and non-breakable containers continue to grow in popularity over traditional wine bottles as wine drinkers look for convenient options for outdoor events and activities. The Plot + Point Tetra Pak packaging holds the equivalent of three glasses of wine. It’s easy and convenient to enjoy where

and when customers want, and the re-sealable container makes it simple to have one glass, store and save for later, or to enjoy in one sitting.

Plot + Point joins other wines in 7-Eleven’s wine portfolio, including: Sip Sip Hooray canned wine cocktails, Trojan Horse chardonnay and pinot grigio, Yosemite Road wine and Voyager Point cabernet sauvignon, red blend and sauvignon blanc wines.

$1 HOT DOGS ON NATIONAL HOT DOG DAY Participating 7-Eleven stores celebrated National Hot Dog Day on July 21 by offering Quarter-Pound Big Bite hot dogs for just $1. And because July was National Hot Dog Month and when 7-Eleven stores sell the most hot dogs, the promotion went on the entire month of July. The 7-Eleven dollar deal was also good on any roller grill items, including taquitos and eggrolls. 7-Eleven sells more than 100 million hot dogs each year, making it one of the country’s top hot dog sellers. Customers know they can build the Big Bite of their dreams at 7-Eleven stores with a wide variety of condiments and toppings. Hot chili, melted nacho cheese, fresh onions, jalapeños and pico de gallo or classics like ketchup, mustard, relish, pickles, mayonnaise and sauerkraut are included with each Big Bite hot dog purchase.

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FOA Board Meetings November 17, 2021 December 1, 2021 December 15, 2021

FOA Of Chicagoland continued from page 58

Southern California FOA Annual Trade Show Pasadena Convention Center Pasadena, California December 8, 2021 Phone: 818-357-5985

San Diego FOA Christmas Party Hilton San Diego/Del Mar Del Mar, California December 11, 2021 Phone: 619-713-2411

Delaware Valley FOA Trade Show Caesars Atlantic City Atlantic City, New Jersey June 23, 2022 Phone: 215-771-6178

Please Note: All meetings will be virtual until further notice.

Phone: 847-343-7777 September 30, 2021—Board Meeting October 14, 2021—Board Meeting & General Meeting.

December 9, 2021—Board Meeting

FOA Of Greater Los Angeles Phone: 619-726-9016 September 21, 2021—Monthly Meeting October 19, 2021—Monthly Meeting & Mini Trade Show

Midwest FOA Webinar Wednesdays Phone: 847-971-9457 September 8, 2021 September 22, 2021 October 6, 2021 October 20, 2021 November 3, 2021

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Phone: 619-713-2411 September 8, 2021—General Safety Meeting September 16, 2021—Monthly Board Meeting October 21, 2021—Monthly Board Meeting

Southern California FOA Phone: 818-357-5985 September 15, 2021—Board of Directors Meeting and Members Meeting October 13, 2021—Board of Directors and Members Meeting

South Texas FOA Phone: 702-249-3301 October 13, 2021—Board Meeting November 10, 2021—Board & General Meeting December 8, 2021—Board Meeting

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AD INDEX American Licorice....................... 56 Anheuser-Busch............................4 Aon Risk Management..........32, 33 Blue Bunny/Wells....................... 41 Campbell’s.................................. 26 Cima Confections ....................... 34 Coca-Cola.......................................2 Danone....................................... 24 Diageo Guinness......................... 11 Electrolit..................................... 28 Kellogg’s........................................9

San Diego FOA

King Palm................................... 50 Living Essentials......................... 45 Mars............................................ 59 McLane....................................... 31 Mondelez.......................................7 Monster...................................... 13 R.J. Reynolds.............................. 55 Stryve......................................... 36 Swedish Match........................... 30 Swisher International..............3, 60 Tell Industries............................. 27

cluding battery electric, plug-in hybrid electric, or fuel cell electric vehicles. • From Memorial Day weekend to mid-July, the national gas price average increased 13 cents to $3.17, according to AAA. That is 98 cents more than the same time a year ago, but 41 cents cheaper than in July 2014, when the national average was last above $3 per gallon. • Walmart is piloting in-store chiropractic clinics at 10 of its locations, reported Progressive Grocer. The company has partnered with The Back Space to offer treatments for $25, as well as $65 monthly memberships. • Electrify America recently announced its “Boost Plan” to more than double its current electric vehicle charging infrastructure in the U.S. and Canada, with plans to have more than 1,800 fast charging stations and 10,000 individual chargers installed by the end of 2025. • A new report by Paytronix finds that 47 percent of restaurant customers use at least one loyalty program. The biggest growth is in those ordering from quick service restaurants, while table service restaurants are missing out on the opportunity to monetize 53 million customers because of their lack of loyalty programs, the report states. • According to a new consumer survey by Adtaxi, 63 percent of respondents said they will prioritize shopping at small and local businesses after the pandemic. This follows 74 percent of respondents who said they planned to shop small and local for the holiday season. • Picnic, a company that creates food preparation automation systems, recently raised $16.3 million in Series A funding to grow its operations, with investors noting the promise of this sort of kitchen automation technology amid the pressing concerns of the labor shortage, reported PYMNTS.com.

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Lone River Ranch Water hard seltzer, born in far west Texas, was inspired by the West Texas cocktail—made with tequila, soda & lime juice— that has long been a staple in the area. The agave seltzer segment brings the popularity of tequila-style flavors to the insatiable hard seltzer consumer.

Lone River is a disruptive brand at the forefront of this emerging segment with the #1, #2 and #3 velocity Ranch Water items in U.S. Convenience. At only 80 calories, Lone River is rated Lone River #1 in taste by consumers on Unhas the #1, #2 and #3 tapped with real juice, agave nectar velocity Ranch Water and a clean finish. Supported by a items in U.S. Convenience. $20 million campaign with national TV, Lone River is an opportunity as big as the Texas sky. Available nationwide in September.

12pk Variety UPC: 860003623497 Origina1 6pk UPC: 860002858616 19.2oz single can UPC: 860002858630

Introducing The Monster Energy Reserve Line Monster Energy is bringing popular fruit forward flavors to extend the core family: Monster Energy Reserve Watermelon is the perfect nostalgic summer flavor that can now be enjoyed all year long. The big difference between them and the

Your customers will enjoy the fruity flavors of Monster Energy Reserve Watermelon and White Pineapple.

competition, is they do flavors right—your customers will get an authentic taste of watermelon with Monster Energy.

Monster Energy Reserve White Pineapple is their take on the classic, tropical fruit flavor. White Pineapple has tons of different notes blended to give customers a truly unique and delicious flavor.

Feel Free All-Natural Energy & Sales Booster

New products and services for 7-Eleven Franchisees

New Lone River Ranch Water

Feel Free by Botanic Tonics is an all-natural plant-based tonic featuring Kava and Kratom that offers pain relief, reduces stress, and provides a natural energy boost from plants, not caffeine. The other benefits of the two active ingredients include anxiety relief, mood enhancement, calming effect, and natural sleep aid.

Available in a 2 oz glass bottle, Feel Free blends the earthy and spicy tones of the ancient tropical plants with refreshing pineapple juice, coconut and premium sweet stevia leaves.

Feel Free is performing very well in the over 1,000 7-Eleven stores that carry it— average per store sales are $298 per month with a 47.5 percent profit margin. Feel Free out-profits the #1 energy shot and energy drink combined in the stores that carry it. Botanic Tonics is promoting Feel Free with a special launch offer: one free fill case and one free acrylic display case to each new store. To place an order, Receive one free fill please call 310-905-7886. case and one free acrylic

display case with your first order of Feel Free.

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South Texas FOA Trade Show

FOA Of Chicagoland Holiday Party

Canyon Springs Golf Club San Antonio, Texas September 8, 2021 Phone: 702-249-3301

Venue TBD October 28, 2021 Phone: 847-343-7777 (*Pandemic restrictions permitting)

South Texas FOA Annual Golf Tournament

Central Florida FOA 8th Annual Charity Golf Tournament

Canyon Springs Golf Club San Antonio, Texas September 9, 2021 Phone: 702-249-3301

San Diego FOA Vendor Appreciation Day Alesmith Brewing Company San Diego, California October 13, 2021 Phone: 619-713-2411

FOA Of Chicagoland Virtual Holiday Trade Show Venue TBD October 18-22, 2021 Phone: 847-343-7777

San Francisco/ Monterey Bay FOA Trade Show Oasis Palace Newark, California October 20, 2021 Phone: 510-693-1492

South Nev/Las Vegas FOA Annual Trade Show Alexis Park Resort Las Vegas, Nevada October 20, 2021 Phone: 702-561-0311

Orange County National Golf Course Winter Garden, Florida November 5, 2021 Phone: 207-415-0924

Central Florida FOA 8th Annual Trade Show & Holiday Party DoubleTree by Hilton Orlando @ SeaWorld Orlando, Florida November 6, 2021 Phone: 207-415-0924

Southern California FOA Annual Charity Golf Tournament Pacific Palm Resort City of Industry, California November 9, 2021 Phone: 818-357-5985

FOA Of Greater Los Angeles Holiday Party Diamond Bar Center Diamond Bar, California December 4, 2021 Phone: 619-726-9016

San Francisco/Monterey Bay FOA Holiday Party Venue TBD December 4, 2021 Phone: 510-791-2422

South Nev/Las Vegas FOA Annual Charity Golf Tournament

Midwest FOA Holiday Showcase

Rhodes Ranch Golf Club Las Vegas, Nevada October 21, 2021 Phone: 702-561-0311

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Venue TBD December 8, 2021 Phone: 847-971-9457

National Coalition Board meetings are scheduled one per quarter. Vendors interested in sponsoring a Board meeting should contact John Riggio, JR Planners, at 262-394-5518 or johnr@jrplanners.com.

National Coalition Affiliate Meeting Grand Hyatt Kauai Resort & Spa Koloa, Kauai, Hawaii November 15, 2021

National Coalition Board of Directors Meeting Grand Hyatt Kauai Resort & Spa Koloa, Kauai, Hawaii November 16-17, 2021

National Coalition Board of Directors Meeting Gaylord National Resort & Convention Center National Harbor, Maryland August 6-7, 2022

NCASEF 46th Annual Convention & Trade Show Gaylord National Resort & Convention Center National Harbor, Maryland August 7-10, 2022

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