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July/August 2018

T H E

V O I C E

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7 - E L E V E N

F R A N C H I S E E S

Record Attendance For 2018 NCASEF National Convention & Trade Show Page 54

To Sign Or Not To Sign... The New Agreement Question A Strong Show Of Unity Whatever Happened To Servant Leadership? More Than What Meets The Eye Unity Is Strength What Are We, Chopped Liver? Coverage Of The 2019 Agreement Page 18

PRSRT STD U.S. POSTAGE PAID York, PA PERMIT No. 200


THE VOIC E OF 7-ELEVEN FRANC H ISEES

July/August 2018

Contents

72 What Are We, Chopped Liver? 72 Lani Roberts Awarded For Community Service 89 A Great 7-Eleven Day In Washington

31 A Strong Show Of Unity By Jay Singh, NCASEF Chairman

35 Whatever Happened To Servant Leadership?

Unprecedented!

By Michael Jorgensen, NCASEF Executive Vice Chairman

49 The 2019 Agreement: More Than What Meets The Eye By Ajinder Handa, NCASEF Vice Chairman, President, Greater Seattle FOA and Chander Shekhar, Vice President, Greater Seattle FOA

A BRIEF ANALYSIS OF THE 2019 FRANCHISE AGREEMENT By Eric H. Karp, NCASEF General Counsel

Record Attendance For 2018 NCASEF National Convention And Trade Show In Orlando

Page 41

51 Unity Is Strength … And Essential To Our Success And Very Existence By Jack W. Rugen, Former President, UFOLINY

Page 54

NCASEF

HIGHLIGHTS TS

Page 18

Features 26 California Town Hall Meetings On The New Agreement 66 Orlando Board Meeting In July AVANTI is published by the National Coalition of Associations of 7-Eleven Franchisees for all independent franchisees, store managers and interested parties. National Coalition offices are located at 1001 Pat Booker Road, Suite 206, Universal City, TX 78148. For membership information, call 702-249-3301 or e-mail nationaloffice@ncasef.com. AVANTI Offices are located at 116 Bellevue Ave., Suite 304, Langhorne, Pennsylvania 19047. For advertising information, call Sheldon Smith at 215 750-0178 or fax to 215 750-0399; on-line, send messages to sheldon.smith5@verizon.net. The views and opinions expressed in the articles and columns published in Avanti Magazine are those of the authors and do not necessarily reflect the official policy or position of the National Coalition of Associations of 7-Eleven Franchisees, its officers or its Board of Directors.

TM

PA R DE

Coverage Of The 2019 Agreement

Member News............14 Bits & Pieces.....16 Legislative Update..........................22 EN

Former CEO Jim Keys Addresses Franchisees At Convention

SEI News.......................................75 Vendor Focus......81 Franchisee Calendars............90

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NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES

Franchisees Urge SEI To Revise Terms Of New Agreement e National Coalition of Associations of 7-Eleven Franchisees is urging 7Eleven to revise the 2019 Franchise Agreement it is pressuring storeowners to sign, the organization said in a released statement. e proposed agreement, which approximately 19 percent must sign by next March and the majority within the following five years, would not only reduce franchisee net income, it would also increase store-level operating costs and force owners to stay open on Christmas Day, NCASEF said. On Aug. 8, the NCASEF sent a letter to CEO Joe DePinto formally requesting all deadlines to sign the agreement by Dec. 31 be removed, and terms be revised to create a more favorable outcome for all parties. e National Coalition has highlighted 45 areas of concern in the agreement, which would have negative impact on franchisee profitability, independent contractor status and legal recourse in the event an owner makes a claim against the company.

“We urge DePinto to order his executive team to meet in good faith with franchisees with the goal of making changes to this agreement and demonstrating their respect for the hard-working men and women who represent this brand,” said NCASEF Chairman Jay Singh.

NATIONAL OFFICERS

Jatinder Singh NATIONAL CHAIRMAN

702-249-3301 • jays@ncasef.com

Michael Jorgensen EXECUTIVE VICE CHAIRMAN

347-251-1828 • mcjorg@yahoo.com

Franchisees Express Disappointment With New Contract

At their annual convention in Orlando, franchisees criticized 7-Eleven for forcing a new contract on them that they said aggravated broader tensions over the suppliers they must use and how much they have to pay for the goods they sell in their stores, among other concerns, reported the New York Times. e article states that the relationship between 7Eleven and its storeowners has been deteriorating for years. In the early 2000s, the company and franchisees split profits equally. But 7-Eleven has taken an increasingly bigger cut, franchisees said, and is now saying that storeowners who do not renew their contracts by the end of 2018 could see their profits shrink further. “e National Coalition and it’s Franchisees said they have no 86-person Board urged 7-Eleven to ability to negotiate with 7Many of them must derevise the 2019 Franchise Agreement Eleven. cide whether to sign the new

it is pressuring storeowners to sign.”

continued on page 16

Nick Bhullar VICE CHAIRMAN

626-255-8555 • bhullar711@yahoo.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

Eric H. Karp, Esq. GENERAL COUNSEL

617-423-7250 • ekarp@wkwrlaw.com

John Riggio MEETING/TRADE SHOW COORDINATOR

262-275-3086 • jrpinc@charter.net

Sheldon Smith AVANTI PUBLISHER ADVERTISING MANAGER

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

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

The National Coalition Office The strength of an independent trade association lies in its ability to promote, protect and advance the best interests of its members, something no single member or advisory group can achieve. The independent trade association can create a better understanding between its members and those with whom it deals. National Coalition offices are located in Universal City, Texas. 14

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

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

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


Register Online NOW for the NCASEF Convention & Trade Show www.ncasef.com continued from page 14

deal or simply walk away. “I’ve never in my 35 years seen a more opaque, topdown, my-way-or-the-highway franchise system,” said Eric Karp, general counsel for the National Coalition. e most contentious provisions include a new $50,000 franchise renewal fee and a requirement that stores open on Christmas. e new contract also makes it clearer, Mr. Karp said, that franchisees are being forced to use suppliers that cannot guarantee the best prices for the items sold in stores. In a statement, 7-Eleven said it enjoyed a “strong, productive relationship” with its franchisees. e company denied pressuring storeowners to sign the new contract, arguing instead that it was offering an incentive to lock in current profitsharing rates. It also said that Christmas was one of its most popular shopping days, and that only 1.7 percent of its stores had closed for the holiday last year.

C-Store Sales Increase In First Half Of 2018 Convenience store retailers cited positive revenue growth over the first six months of 2018, with expanded healthy snack and drink options expected to fuel strong summer sales growth, according to a survey of U.S. convenience store owners by the National Association of Convenience Stores (NACS). C-stores sell nearly 80 percent of the fuel purchased in the United States and conduct an estimated 165 million transactions a day, making the industry a good indicator for trends related to travel and consumer spending. More than three in four (79 percent) convenience retailers said in-store sales increased over the first six months of 2018 compared to the same time last year, and more than half (56 percent) said their fuel sales increased compared to last year. Only 7 percent of retailers said that in16

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“C-stores sell nearly 80 percent of the fuel purchased in the United States and conduct an estimated 165 million transactions a day, according to NACS.”

store sales declined and only 19 percent said fuels sales declined. Retailers say a continued focus on fresh and healthy items in stores helped boost sales, and they plan to continue dedicating more sales space to these items. Retailers cited the addition or expansion of the following items

in their stores: 1. Health bars (45 percent of retailers added or significantly expanded over the first half of 2018) 2. Fresh fruit/vegetables (41 percent) 3. Packaged salads (37 percent) 4. Nuts/trail mix (35 percent)

7-Eleven Again #1 On CSP Top 202 List 7-Eleven yet again took the #1 spot on the CSP’s “Top 202 Convenience Stores” list, which ranks the largest convenience store chains in the industry by U.S. store count as of December 31, 2017. 7-Eleven topped the list with 9,077 stores, while Alimentation Couche-Tard Inc. came in at #2 with 8,346 stores. Speedway ranked #3, trailing with 2,744 stores. Any pending sales are not included when developing the Top 202 list, with the exception of 7-Eleven’s acquisition of 1,030 Sunoco sites—which was announced in April 2017 but not finalized until January 2018—due to the extreme continued on page 18

According to a new survey by Shorr Packaging, 84 percent of respondents said they would likely enjoy shopping at the Amazon Go cashier-less convenience store compared to a regular brick-and-mortar location. Additionally, 75 percent of people surveyed said they would likely shop at an Amazon Go if one were located nearby. • Retail industry employment in July increased by 66,000 jobs unadjusted over the same time last year showing on-going industry growth, the National Retail Federation announced. Overall, U.S. businesses added 157,000 jobs over June, the Labor Department said. • Seven-Eleven Japan plans to open 100 stores in Vietnam within the next three years, reported Bloomberg. The company opened its first airconditioned, Wi-Fi equipped store in downtown Ho Chi Minh City in August 2017, and has since rolled out about two locations per month. • Walmart plans to open more convenience stores in Dallas Fort Worth, reported the Dallas Morning News. A 2,900-square-foot Walmart convenience store with eight fuel pumps opened recently in Plano, and three more are planned for Arlington, Lake Worth and The Colony later this year. All c-stores are located in Walmart Supercenter parking lots. • 7Eleven Australia recently launched a nationwide recycling program that will make sure non-biodegradable items such as straws, cups, and lids find their way into a recycling facility instead of into the ocean, reported OneGreenPlanet.com. Dedicated bins—separate for coffee cups, Slurpee cups, and lids and straws—have been installed in more than 200 7-Eleven stores across Australia. • A new patent issued to credit card giant Mastercard could mean consumers someday could use a credit card to pay in virtual currency like bitcoin, rather than traditional currency like U.S. dollars, reported CreditCards.com. • McDonald’s and Starbucks are joining forces to build a fully recyclable, continued on page 44


Register Online NOW for the NCASEF Convention & Trade Show www.ncasef.com continued from page 16

impact of the sale, CSP stated. Without Sunoco, 7-Eleven would have come in second place in 2017 behind CoucheTard, shy by 299 stores, according to CSP.

Ricker's to Launch New Hybrid Checkout C-store chain Ricker’s and tech company Skip recently announced the rollout of their new frictionless checkout technology—a hybrid of mobile pay and AmazonGo “just walk out” experiences—to customers in 58 Ricker's stores in Indiana. e companies said

“Fiy-eight Ricker’s stores have introduced frictionless checkout technology to enable instant pay-and-go.”

their mission is to pro“CSP ranked 7-Eleven as the #1 convide a best-in-class convenience store expervenience store chain in the industry ience, easy access to by store count, with 9,077 stores.” promotional deals, and enable customers to purchase in-store items at the pump or prior to arrival. Skip's technology reduces the speed of checkout from an average of 60 seconds to an instant pay-and-go action controlled 7-Eleven has landed the #1 spot on the by the customer. Via its partnership with Convenience Store News Top 100 list, which is the industry’s longest-running accountZipline, Skip also acts as a cost cutter for ing of the largest convenience store chains retail businesses bringing down transacby store count. e annual report is comtion fees. For Ricker's, Skip provides a piled in partnership with TDLinx, a service competitive advantage expected to drive of Nielsen. Quebec-based Alimentation more transactions and frequency, includCouche-Tard came in second. As of May, ing higher conversions from the forecourt Convenience Store News had 7-Eleven’s U.S. to the food court. Once the experience is store count at 9,348, and Couche-Tard’s at fully optimized, which includes integra7,230. Together, these two chains alone options with Zipline and Kickback Rewards, erate nearly 11 percent of the U.S. c-store it will rollout across all Ricker's locations industry’s 154,000-plus stores. by the end of September

The NCASEF recently launched a new section to its website called Dispatch that allows national leadership to quickly communicate news and information to franchisees. Located on the right column of the homepage, you will find the latest updates, news, and press releases from the National Coalition. Printed below are summaries of some of the latest Dispatch items. Please visit www.NCASEF.com to read the full versions.

NCASEF

SEI Continues Campaign Of Pressure & Misinformation On August 7, 7-Eleven franchisees received an email from SEI Executive Vice-President and Chief Operating Officer Chris Tanco, which was sent under the guise of celebrating the signing of the new Franchise Agreement by franchisees representing about 100 stores in our system.

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7-Eleven Tops CSNews Top 100

continued on page 20

One did not have to read far to see the true intent of his email—to discredit NCASEF and the public information campaign we are spearheading. Tanco goes on to list 9 items as “misinformation being published about the agreement.” In this extremely misleading email, one is to believe NCASEF has been twisting the truth about these items, when, in fact, not one of the items listed has anything to do with the points we have been making in interviews with the press or in our communication with franchisees. to strengthen the It is our goal to strengthen the 7-Eleven brand 7-Eleven brand. We once again implore you to not rush into signing this new agreement. We are working tirelessly to renegotiate more favorable terms to ensure a healthier future for all of us.

HIGHLIGHTS

“It is our goal

continued on page 20

. We once again implore you to not rush into signing this new agreement.”


Register Online NOW for the NCASEF Convention & Trade Show www.ncasef.com continued from page 18

In the past year, 7-Eleven added roughly 1,000 stores across 17 states when it acquired most of the retail assets of Dallasbased Sunoco LP. Meanwhile, Couche-Tard kept up its reputation as an aggressive acquirer by adding CST Brands Inc. (roughly 1,300 stores) and Holiday Cos. (500-plus stores) to its ever-growing portfolio.

NCASEF

Microsoft Developing Cashier-less Technology Microso Corp is working on technology that would eliminate cashiers and checkout lines from stores, in an apparent challenge to Amazon.com Inc’s automated

HIGHLIGHTS

continued from page 18

Jim Keyes Offers Hope to Franchise Owners The most successful NCASEF National Convention and Trade Show ended in Orlando with a surprise visit by former 7-Eleven President and CEO Jim Keyes. Keyes led the company back from the brink of bankruptcy in 1991 and helped turn it into the world’s largest retail chain. Keyes said he wanted to speak at the convention to offer hope to franchisees and to thank them for their role in the 1991 turnaround. He shared anecdotes about his time at the helm of 7-Eleven, including how he fought others at corporate when he wanted to sit down with franchisees at the NCASEF convention to hear directly from franchisees. His remarks were well received by the over 1,300 franchisees in attendance. “We needed to hear from Jim Keyes,” said Jay Singh, NCASEF Chairman. “His heartfelt speech was an important reminder that we have been through tough times before and we will work hard to get through this period. It is time for [current CEO] Joe DePinto to take a page from the playbook of our former President and CEO. Jim Keyes always understood that franchisees are the brand. It’s a crucial point DePinto and others in power at 7-Eleven are failing to recognize.”

Record Attendance For 2018 NCASEF Convention & Trade Show With a capacity crowd of 1,800 franchise owners and vendors, the National Coalition marked the 2018 convention in Orlando as the most successful in its history. The convention featured a keynote address by National

20

“National Coalition marked the 2018 convention in Orlando as

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the most successful in its history.”

convenience store, reported Reuters. Microso is developing systems that track what shoppers add to their carts, and has shown sample technology to retailers from around the world. e soware giant has also had talks with Walmart about a potential collaboration. Microso’s technolcontinued on page 26

Coalition Chairman Jay Singh, dozens of vendor exhibits, information sessions to answer questions about the 2019 franchise agreement, a check presentation to Swim Across America and numerous opportunities for networking with colleagues and friends. Two Seven-Eleven franchise owners from Japan also came to the convention to meet their U.S. counterparts. The biggest convention surprise, however, was an unannounced appearance and keynote address by former 7-Eleven President and CEO Jim Keyes, who offered encouragement to franchisees in weathering the current crisis, and credited the franchisees for helping the company rebound back in 1991.

Why The New Franchise Agreement Is Bad For The Brand General Counsel Eric Karp and the NCASEF leadership team have taken an in-depth look into the new franchise agreement, and are presenting a series of articles on Dispatch highlighting the provisions of the agreement they believe are bad for franchisees and the brand. Below are the first 15 concerns they have highlighted. To read Eric Karp’s analysis of the 45 significant changes found in the new agreement, please visit http://ncasef.com /wp-content/uploads/2018/07/Analysis-of-Significant-Changes 7.10.18.pdf. • Business Judgment—Section 31(n) • Loyalty Programs—Sections 17(a) and 26 (b)(9) • Pricing—Section 15(j) • Termination—Sec 26 and 26(a) • Governing Law—Section 30(a) • Indemnification and Insurance—Section 18 and Exhibit C • Maintenance Contracts Section 8(a)(3) and 20(h) • Franchisee Payroll—Section 12(e) • Audits—Section 14 • Renewal Fee—Section 24(j) • Hours of Operation—Page E9 • Jury Trial—Section 30(d) • Costs and Attorney Fees—Section 30(c) • Mediation—Section 29 • Store Managers—Section 4,6(b)


Register Online NOW for the NCASEF Convention & Trade Show www.ncasef.com

Legislative Update Seattle Bans Plastic Straws & Utensils Plastic straws, utensils and cocktail picks are now banned at all Seattle businesses that sell food or drinks under a new law that kicked in on July 1, reported KOMO-News.com. Seattle is believed to be the first major U.S. city to enact such a ban. Officials said the measure is needed as part of the city's continuing efforts to reduce waste and prevent petroleumbased plastics from contaminating compost and polluting marine waters. Seattle is also encouraging businesses to consider providing compostable paper straws rather than compostable plastic straws because the plastic variety is not marine biodegradable.

Massachusetts Lawmakers Compromise On Employee Benefits e Massachusetts minimum wage will rise to $15 an hour over five years— and a new paid family and medical leave program will be introduced—under a bill Governor Charlie Baker signed into law recently, reported WBUR News. e measure also mandates an annual August sales tax holiday weekend. e so-called “grand bargain” was designed to keep several ballot questions—including a proposal to cut the Massachusetts sales tax—off the “Massachusetts November ballot. Massachusetts is now minimum wage the third state, aer California and New York, with a minimum pay floor on the will rise to $15 way to $15 an hour. an hour over the e new law will also raise the minimum next five years.” wage for tipped workers over five years to $6.75. In addition, the measure—over the same five years—phases out time-and-a-half pay for Sunday and holiday hourly workers. Opponents of higher minimum wages say they just increase labor costs, which force employers to then raise prices and/or cut other wages, benefits or jobs. Some proponents of higher pay floors also worry about the untested $15 minimum in locations outside high-cost labor markets.

Court Upholds Philly Soda Tax e Pennsylvania Supreme Court recently upheld Philadelphia’s controversial tax on soda and other sweetened beverages, reported the Philadelphia Inquirer. In a 4-2 major22

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“PENNSYLVANIA’S SUPREME COURT UPHELD PHILADELPHIA’S CONTROVERSIAL 1.5 CENT-PER-OUNCE TAX ON SODA AND OTHER SWEETENED BEVERAGES.” ity opinion, the court found that the city had not violated state law by taxing the distribution of beverages. Opponents of the tax had argued that the levy amounted to double taxation because it is passed down to consumers who already pay sales tax on the items. e ruling provided a more secure future for the 1.5-cent-per-ounce tax that funds pre-K, community schools, and improvements to parks, libraries, and recreation centers, and ended a case that had been closely watched since Philadelphia became the first big U.S. city to pass a tax on soda and sweetened beverages in 2016.

California Ballot To Include Gas Tax Repeal Californians will vote in November on a ballot proposition that would repeal a new gas tax and vehicle fees, reported the Los Angeles Times. With polls showing most California voters want to kill the new tax, the initiative poses a real threat that the funding plan to fix the state’s roads and bridges won’t survive the November 6 election. e measure earned a spot on the statewide ballot in late June, garnering more than the 585,407 signatures of registered voters required. Senate Bill 1, signed by Gov. Jerry Brown last year, raised the state gas tax by 12 cents per gallon and increased the diesel fuel tax by 20 cents per gallon. e measure also created a new, annual vehicle fee ranging from $25 for cars valued at less than $5,000, to $175 for cars worth $60,000 or more. It was designed to raise more than $5 billion annually for road repairs and improvement to mass transit systems across the state. e ballot measure that qualified would not only repeal the new levies, it also would amend the California Constitution to require voter approval for future gas tax increases.

California Bans Local Soda Taxes California cities and counties are banned from taxing sodas and other sugary drinks for the next 12 years under a bill signed into law by Democratic Gov. Jerry Brown, reported Fox News. e deal was rushed through the legislature and to the governor's desk on June 28. In exchange for the law, the nonalcontinued on page 24


Register Online NOW for the NCASEF Convention & Trade Show continued from page 22

www.ncasef.com

Legislative Update coholic beverage industry is withdrawing a ballot measure that had been slated for November. It would have raised the voter threshold to approve local sales tax increases on any item—not just soda taxes—from a majority vote to a supermajority “CALIFORNIA CITIES vote. Upon signing the bill AND COUNTIES ARE into law, Brown said in a stateBANNED FROM TAXING ment that increasing the votSODAS AND OTHER ing threshold “would be an SUGARY DRINKS FOR abomination.” Other DemocTHE NEXT 12 YEARS rats said that the choice had UNDER A BILL put them in a bind. SIGNED INTO LAW Shortly aer the law was BY DEMOCRATIC passed, major healthcare

GOV. JERRY BROWN.”

groups announced that they will pursue a statewide soda tax initiative on the 2020 ballot to pay for public health programs, reported the Los Angeles Times. e proposed 2-cents-perfluid-ounce tax would mean an additional 24 cents tacked onto the cost of a 12-ounce can, or an extra $1.34 for a 2-liter bottle sold in the state. e initiative would also enshrine in the California Constitution the right of local governments to impose soda taxes.

Massachusetts Raises Statewide Smoking Age To 21 Massachusetts is the latest U.S. state to require people be at least 21 before they can buy cigarettes, tobacco or vaping products, reported the Associated Press. e bill to boost the continued on page 64


Register Online NOW for the NCASEF Convention & Trade Show continued from page 20

ogy aims to help retailers keep pace with Amazon Go, a highly automated c-store that opened to the public in Seattle in January. Amazon Go has sent rivals scrambling to prepare for yet another disruption by the world’s biggest online retailer. Some have tested programs where customers scan and bag each item as they shop, with mixed results.

Wawa Partners With Uber Eats To Expand Delivery Wawa, Inc. recently announced it will be adding Uber Eats as a delivery option for a specified group of stores that will deliver to select locations in Pennsylvania, Florida and Washington, DC. Wawa first started offering delivery in late 2017. Currently offered at 15 stores, online delivery

www.ncasef.com

Seven & i’s FirstQuarter Profits Rise On Overseas Sales via Grubhub and now Uber Eats is available for most of Wawa’s foodservice products, as well as a limited number of beverages, chips, candy and desserts. Wawa said it is continuing to gather internal and external feedback from customers and associates to help ensure the delivery process is as smooth and seamless as possible. Since the initial pilot, delivery of Wawa products has been the most popular on weekends and during the dinner timeframe, the company stated.

SEI parent company Seven & i Holdings said its operating profit rose 2.7 percent year-on-year in the three months through May, bolstered by strong sales at its overseas convenience stores, reported Reuters. Operating profit was 86.4 billion yen ($781.2 million) for the first quarter. As Japan’s convenience store industry faces a slowdown and intense competition from discount drugstore chains, Seven & i Holdings is increasingly banking on overseas operations for growth, the article states. e operating profit at its domestic 7Eleven businesses declined 6.9 percent continued on page 62

California Town Hall Meetings On New Agreement More than 700 franchisees attended two NCASEF Franchisee Town Hall meetings in California. An August 21 meeting in the San Francisco Bay area (below) was sponsored by four California FOAs. A second Town Hall meeting held

in Los Angeles (above) on August 22 was sponsored by six FOAs. Storeowners representing the majority of franchisees in southern California attended to hear a presentation by NCASEF General Counsel Eric Karp and ask questions concerning the terms of the 2019 Franchise Agreement. 26

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A Strong Show Of Unity BY JAY SINGH, CHAIRMAN, NCASEF

We are very pleased to announce that this year’s NCASEF Convention and Trade Show in Orlando was our most successful event to date! Franchisee unity was clearly on display, with 1,310 franchisees and their families attending our four-day convention—the most ever. We also had 569 vendors occupying 174 booths during the twoday trade show, offering great deals and hot-selling products for our franchisees to order. This year we went the extra mile to assure greater attendance by lowering the registration fee and subsidizing the hotel room to make the convention even more affordable for franchisees and their families. We also included free tickets to Universal Studios, which our attendees immensely enjoyed, and held a raffle giveaway during the trade show with the grand prize being a 2018 BMW 320i. The car giveaway incentivized all franchisees at the show to order from our vendors to enter the raffle. With the 2019 Franchise Agreement weighing heavily on everyone’s minds, along with many other concerns, one of the biggest draws at this year’s event were the seminars. During the “State of the Coalition” seminar, NCASEF officers addressed many of the issues affecting 7-Eleven storeowners and gave an update on our troubled relationship with SEI. General Counsel Eric Karp’s seminar focused on the 2019 Agreement. He focused on the 45 JAY SINGH CAN BE REACHED AT most detrimental 702-249-3301 OR parts of the new JAYS@NCASEF.COM contract, and an-

swered many questions from the audience. Given the raid of many 7-Eleven stores by ICE agents earlier this year, we also had a seminar conducted by officials from the Department of Homeland Security to talk about I-9 compliance and how to use E-Verify. As they explained it, if you run E-Verify on all employees then you don’t have to worry about anything. You have then done everything possible to ensure your employees are legal. If you

“We sent a letter to CEO Joe DePinto requesting revisions to the 2019 Agreement and the accompanying Amendments, as well as a renewal of the dialog with the National Coalition and FOAs.” join this program, they can also certify that your stores are participating. We were honored to have as our guests two 7-Eleven franchisees from Japan. They mingled with the crowd and it was nice to have them. The work

“This year’s National Coalition convention was our most successful to date, and franchisee unity was clearly on display.” and franchise culture in Japan is much different than in the U.S., and it was a good experience to meet and chat with them. They are attempting to organize a 7-Eleven franchisee trade association in Japan and we invited them here to visit and see how an independent trade association operates. Our Charity Auction night was a huge success. We raised $100,000 for Swim Across America in just 30 minutes. I would like to personally thank every FOA and every franchisee that pledged and helped to make the auction a resounding success. The “Franchisees ARE the Brand” trade show showcased many new products and was a big hit with franchisees and our exhibiting vendors. Franchisees placed many orders during the trade show, which made our vendors very happy. We ended the convention on a high note, with former SEI CEO Jim Keyes as our keynote speaker. Instead of looking outside for a consultant to speak at the Grand Banquet, we decided to bring in one of our own, and our attendees appreciated it. Jim Keyes turned the company around from the brink of bankruptcy in 1991 and had 40 consecutive quarters of same store sales growth. His main point was that franchisees are the brand, and everything can be solved through discuscontinued on page 32 AVANTI J U LY | A U G U S T 2 0 1 8

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A Strong Show Of Unity continued from page 31

sions. Franchisees applauded and gave him a standing ovation. I was very proud of the show of franchisee unity at our convention, and I feel we are now stronger for it. So what’s next for franchisees? With the 2019 Agreement, financial aspects are not what they should be. We will be making less money than ever before, and our freedom to operate our stores independently will be constricted. Please visit the “Dispatch” section of our website, www.ncasef.com,

for all the NCASEF’s analysis and details on the 2019 Agreement. As a result of our current situation, we sent a letter to CEO Joe DePinto requesting revisions to the 2019 Agreement and the accompanying Amendments, as well as a renewal of the dialog with the National Coalition and franchisees. We also requested a new negotiating session to come to terms on a new more equitable franchise agreement.

“It’s more important than ever in these difficult times to join your local FOA, not only to get help from your colleagues, network, and share ideas, but to get answers to your questions, and receive the latest information about our 7-Eleven system.”

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We did this because we are interested in the health and well-being of the brand, and the health and well-being of the franchisee community. Our best advice to anyone reading this is to join your local FOA if you are not already a member. If you are a member, please add to your expertise and to our joint effort by attending meetings, expressing your opinions, and furthering the dialogue to improve the system. We are working hard for you. It’s more important than ever in these difficult times to join your local FOA, not only to get help from your colleagues, network, and share ideas, but to get answers to your questions, and receive the latest information about our 7-Eleven system.


Whatever Happened To Servant Leadership? BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF

I recently saw a social media post where, on a white board, someone had written, “A leader who fails to listen will eventually find himself surrounded by people with nothing to say.” I think it’s safe to say that most folks reading this article will already know that I am not pleased with the direction of the 2019 Agreement. As troubling as the Agreement is—with a host of potential financial and operational implications—even more than the Agreement, is the picture SEI is portraying of franchisees all over the country who are thrilled with this Agreement and beating down the door to sign it. This portrayal could not be farther from reality. The most disturbing part is that I am starting to believe SEI leadership truly believes that franchisees are happy. Either that, or they simply do not care. Either way spells trouble. In order to demonstrate why I am starting to think this way, I want to share some details from the 2017 Franchisee Satisfaction Survey. This was the 7-Eleven survey that was completed on our store ISPs and shared on 7-Hub. It may still be there. Questions were answered by one of five choices: 1) Strongly Agree, 2) Agree, 3) Neither Agree or Disagree, 4) Strongly Disagree,

“More troubling than the Agreement itself is the picture SEI is portraying of franchisees all over the country who are thrilled with this Agreement and beating down the door to sign it.”

“When looking to improve upon results through the use of a survey, the typical approach would be to address the areas identified in the survey as having the highest impact on the overall score.” and 5) Disagree. In the results presented, these five choices were separated into three categories: 1) Favorable, 2) Neutral and 3) Unfavorable. Strongly Agree and Agree fell into Favorable, Neither Agree or Disagree be-

came Neutral and Strongly Disagree and Disagree became Unfavorable. The survey broke out various categories and services, and also had an Overall Services score. The Overall Services score by franchisees was 73 percent Favorable, 17 percent Neutral and 10 percent Unfavorable. SEI described the results by stating, “Taking all of the services and support provided by 7Eleven into account, franchisees show a strong endorsement for The Brand. In aggregate, the services and support activities help franchisees run their businesses effectively.” The 2017 Survey Overall Services score results mirror the exact numbers from the last survey completed in 2015, yet a more detailed look at some of the specific questions

and responses might make it seem the very opposite of 7-Eleven’s take on the survey— that in fact there are more, far deeper issues that the leadership is not addressing. When looking to improve upon results through the use of a survey, the typical approach would be to address the areas identified in the survey as having the highest impact on the overall score. Taking a look at the 2017 Franchisee Satisfaction Survey, these areas would include the following: • The Relationship category overall score, which was 68 percent Favorable (up 2 percent from 2015), 17 percent Neutral, and 15 percent Unfavorable (up 4 percent from 2015). • Only 64 percent of franchisees felt that 7-Eleven was committed to their success. This is down 2 percent from 2015, when 66 percent felt that 7-Eleven was committed to their success. • Only 62 percent of franchisees felt favorably that 7-Eleven wants them to be profitable—down 2 percent from 2015. Looking at Operations, the Overall Score dropped 6 percent from 2015 to 70 percent. • Only 63 percent felt Favorably that Operations was committed to their success (-4 percent). • 66 percent felt Favorably that their Zone Leader provides strategic leadership. continued on page 36

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Whatever Happened To Servant Leadership? continued from page 35

• 70 percent felt Favorably that their Market Manager is responsive to their needs. • 76 percent (-4 percent) felt Favorably that their Field Consultant is a valuable resource to help grow their business profitably.

• 75 percent (-5 percent) felt Favorably that their Field Consultant was interested in their store-specific goals for business. In the Merchandising category: • 66 percent (-3 percent to 2015) of franchisees responded Favorably that the

HOW DO WE DEFINE LEADERSHIP? Max DePree, in his book, “Leadership is An Art,” describes leadership as “liberating people to do what is required of them in the most effective and humane way possible.” DePree says leadership deals more with ideas and beliefs and relationships, and has to do with the “why” of institutional and corporate life rather than the “how.” Profit, the hoped-for-result of the “how,” is normal and essential. Those results, however, are only a way to measure our resourcefulness at a single point in time, a mile marker on a long road. Why we get those results is more important. Here are some excerpts from “Leadership is An Art,” by Max DePree: “The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant and a debtor. That sums up the progress of an artful leader.” “The signs of outstanding leadership appear primarily among the followers. Are the followers reaching their potential? Are they learning? Serving? Do they achieve the required results?” “Leaders should leave behind them assets and a legacy....Leaders owe their institutions vital financial health, and the relationships and reputation that enable continuity of that financial health. Leaders must deliver to their organizations the appropriate services, products, tools, and equipment that people in the organization need in order to be accountable. “People are the heart and spirit of all that counts. Without people, there is no need for leaders.” “Leaders need to be concerned with the institutional value system which, after all, leads to the principles and standards that guide the practices of the people in the institution.” “Effective leaders encourage contrary opinions, an important source of vitality.” “Leaders owe the corporation rationality. Rationality gives reason and mutual understanding to programs and to relationships. It gives visible order.” “Leadership comes with a lot of debts to the future. There are more immediate obligations as well. Momentum is one. It is not abstract or mysterious. It is the feeling among a group of people that their lives and work are intertwined and moving towards a recognizable and legitimate goal.” “Momentum comes from a clear vision of what the corporation ought to be, from a wellthought-out strategy to achieve that vision, and from carefully conceived and communicated directions and plans that enable everyone to participate and be publicly accountable in achieving those plans.” “Leaders are responsible for effectiveness…efficiency is doing things right, but effectiveness is doing the right thing.” 36

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7-Eleven merchandising department is committed to their success. • Only 41 percent (-1 percent) of franchisees felt that 7-Eleven does a good job negotiating lower cost of goods with the vendor partners, while 38 percent (+4 percent) of franchisees disagreed and feel that 7-Eleven is not doing a good job of negotiating a lower cost of goods. When satisfaction scores drop precipitously like this in the short space of two years, leadership should not be pleased. In this case leadership begins at the top, and filters down through every level of the 7Eleven corporate structure, from our CEO to VPs, Directors, Zone Leaders, Market Managers and Field Consultants. It is important to note that the farther away from the store the relationship gets, the more disconnected the relationship and the more difficult it is to achieve favorable results. Can we use these highlighted opportunities to grow overall franchisee satisfaction? As I said earlier, SEI needs to address these points. My big worry is that in failing to do so, and in light of the 2019 Agreement, current leadership is failing in their stewardship of the brand, forsaking franchisees for other shareholders. Franchisees are shareholders too! We have invested not only our hard earned cash (the same as stockholders), but our time, our energy and our relationships with our families to make the brand successful. Where are we today? Has 7-Eleven made improvements since the 2017 Survey? Whatever happened to servant leadership?

MICHAEL JORGENSEN CAN BE REACHED AT

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


Order NOW! UIN 098817


Unprecedented! ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

This one word encapsulates my view of not only the 2019 franchise agreement, but the deeply flawed and contrived process that led to its issuance. I have been practicing franchise law for more than 40 years. I represent many national franchisee associations. As part of my practice, I have been involved in several circumstances where a franchisor, for one reason or another, offers an early renewal franchise agreement to its franchisees. In every single one of those instances, two things happened. First, that early renewal franchise agreement was the subject of good faith, as well as prolonged and largely amicable negotiations, between the franchisor and the franchisees, over the form and content of that franchise agreement. The goal in each of those situations to was to create a franchise agreement that reflected a fair balance between the risks and rewards of the franchise relationship. The franchisors in those circumstances realized that unless the franchise agreement was indeed fair and balanced, the likelihood of receiving an endorsement from the independent franchisee organizations was essentially zero. And they realized that the acceptance of the franchisee community, and their willingness to invest in the brand by purchasing additional locations, or by recommending the purchase of the franchise opportunity to family and friends, would

be dependent on a signal from their elected representatives that the agreement was acceptable to them. Second, in order to induce franchisees to renew early, in each of the circumstances there were many carrots held up to franchisees. These included more favorable terms and conditions of the franchise agreement and economic incentives that would add to their bottom lines and the

value of their businesses. These more enlightened franchisors realized that making financial and legal concessions to the franchisees in the short run would yield dividends in the long run. Sadly, but true to form, SEI’s 2019 agreement delivered June 15, 2018, was completely inconsistent with any prior early renewal franchise agreement I have ever worked on or have heard of over the last four decades. This 2019 agreement was presented on a take or leave it basis and

“This 2019 agreement was presented on a take or leave it basis and constitutes a figurative gun to the head of franchisees, whose arms are being twisted to sign this agreement by December 31, 2018 or at some point be subject to a gross profit split that does serious damage to store level economics.”

“SEI’s 2019 agreement, delivered June 15, 2018, was completely inconsistent with any prior early renewal franchise agreement I have ever worked on or have heard of over the last four decades.” constitutes a figurative gun to the head of franchisees, whose arms are being twisted to sign this agreement by December 31, 2018 or at some point be subject to a gross profit split that does serious damage to store level economics. The 2019 franchise agreement arrived as part of a package that included the franchise disclosure document, which is mandated by federal and state law. Many franchisees justifiably find the document to be impenetrable because it spans some 641 pages and weighs nearly 7 pounds. Here is what it looks like:

The 2019 Franchise Agreement weighs nearly 7 pounds. SEI created a Franchise Agreement Committee (FAC), which was allegedly but misleadingly charged with collaborating with SEI to create an agreement that could eventually be endorsed. The truth is that continued on page 42 AVANTI J U LY | A U G U S T 2 0 1 8

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Unprecedented! continued from page 41

Thus, franone example, the franchisees are stuck chisees requested that with the expense of SEI increase its in- “The promise of transparency demnification of fran- regarding store level economics maintaining older and older equipchisees to account for generally, and the profitability ment, which gets inflation and increases more and more exin legal costs and set- of fresh and hot foods in pensive over time, tlements. Instead of particular, never materialized.” and SEI gets to dedoing so, SEI eliminated the indemnification altogether and vote its capital to buying more stores. Over transferred 100 percent of the cost of gen- the last several years, SEI has spent more eral liability and related insurance to the than $4 billion on acquisitions and by comfranchisees. In addition, we count 44 major parison, pennies on improving existing changes to the franchise agreement that are stores. The second built-in conflict of interest unfavorable to the franchisee and just three that are at least partially favorable to the is based upon the fact that SEI sets the retail price for consigned gasoline. Thus SEI has franchisee. Importantly, the 2019 franchise agree- a built in incentive to maximize its revenue ment perpetuates two significant built-in and profit from gasoline because the franconflicts of interest in the SEI system that chisees do not share in that profit. In 2017 are not seen in any other franchise system. SEI earned gross profits on gasoline of just The first is the fact that SEI owns the under $1.2 billion. Tellingly its gross margin equipment in each of the stores, but the on gasoline in 2011 was 5.8 percent; in 2017 franchisees are responsible for the mainte- it had risen to 9.45 percent. When gasoline nance of that equipment. SEI has consis- is priced to maximize gross profit, it reduces tently refused to make any commitment the number of gallons sold thus decreasing the commission payable to franchisees. It “According to our calculations GGPS-OS would reduce a also reduces the number of customer trips to the franchised location and thus negafranchisee’s share of gross profit for a $1.7 million store tively impacts revenue in the store. with a 35 percent gross margin by $6,850 per year. For a Neither of these built-in conflicts of interest are in any way addressed in the $2.2 million store the impact would be $13,100 per year.” new franchise agreement. The 2019 agreement has a whole array OS SEI would take a larger share of the regarding expenditures for the replacement of worn out equipment or the renovation of actual and potential increases in costs, shrinking gross profit pie. A joint venture of the FAC, the Na- or refurbishment of tired and worn out expenses and liabilities to franchisees. tional Coalition and the NBLC created the looking stores. However, based on disclo- These arise in the areas of grand openings, so-called 27 points document, which in- sures made by its publicly held parent, we manager training, Internet sales fulfillcluded many subparts, and made clear the see that actual capital expenditures on ex- ment, employment law auditors, E-Verify, franchisee community’s consensus on what isting stores is on a downward trend year- re-audits, loyalty programs, delivery servthe new franchise agreement should look over-year. For example, for the three ice labor and equipment, computer equiplike. By our calculation, 95 percent of the months ended March 31, 2018, capital ex- ment, liability insurance, advertising fees points in that document were not only ig- penditures on existing stores fell by nearly for lower volume stores, higher renewal nored by SEI, but in many cases SEI went 29 percent from the same three-month pe- fees for many stores, payroll costs, managein precisely the opposite direction. As just riod in 2017. continued on page 44 the process was never intended to be anything more than window dressing. The promise of transparency regarding store level economics generally, and the profitability of fresh and hot foods in particular, never materialized. This is particularly distressing because according to publicly available documents, the system-wide gross profit margin declined by 0.5 percent in the 12 months ended December 31, 2017 and another 0.3 percent for the three months ended March 31, 2018. In 2017, franchisees purchased $8.3 billion worth of inventory. This reduction in gross profit margin translates into a store level impact of nearly $4,600 per year on average. It is in that context that SEI is threatening to impose what I have called graduated gross profit split on steroids (GGPS-OS). According to our calculations GGPS-OS would reduce a franchisee’s share of gross profit for a $1.7 million store with a 35 percent gross margin by $6,850 per year. For a $2.2 million store the impact would be $13,100 per year. To put it another way, under GGPS-

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ment fees, legal fees and mediation fees. For this reason, Chris Tanco’s email to all franchisees of August 15, 2018 should cause all discerning franchisees to laugh out loud. He incorrectly claims that the new franchise agreement is “fair and balanced” and that it was based upon “extensive input and feedback from many Franchisees.” As this article demonstrates in great detail, the facts are otherwise. We prepared a complete summary of the 47 most important changes in the 2019 franchise agreement, which has been posted on the National Coalition website. This document was summarized in a PowerPoint presentation at the most recent NCASEF Tradeshow and Convention and has been made available to all FOA presidents. Time and space do not permit a complete explanation of those changes here. Let me close by focusing on a number of changes that have not received the attention they deserve. These changes relate to dispute resolution and related matters. Here are some of the very disturbing ways that SEI has radically changed these provisions: • Mediation is no longer required, and SEI will now pay only 50 percent of the cost, not 2/3. • Texas law “We prepared a governs the concomplete sum- tract, which is designed to deprive mary of the 47 franchisees of the most important franchise specific changes in the protections that 2019 franchise may be available to them under agreement, their home state which has been laws. • All disputes posted on the National Coalition must be heard in SEI’s hometown.

website.”

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“The 2019 agreement has a whole array of actual and potential increases in costs, expenses and liabilities to franchisees.” • SEI can recover legal fees from the franchisee even if no legal proceeding is actually filed and even if it does not prevail. • Jury trials have been waived. • Franchisees must assert claims within two years after the cause of action accrues, whether or not the franchisee even knows there is a claim. I point out these provisions not because the typical franchisee will be affected by them, but because they illustrate how SEI has taken a franchise agreement— which was already unfair and inequitable in many respects, and already steeply onesided on a whole array of issues—and made it materially worse for the franchisee. I have said many times in this space that the most important challenge in the system is not anything specific to the franchise agreement, but rather the culture of this franchisor. SEI remains the most opaque, top-down, take-it-or-leave-it, myway-or-the-highway franchisor that I have ever encountered. Every attempt to negotiate and collaborate on a fair and balanced franchise agreement in the context of a mutually respectfully and transparent relationship, has been rebuffed. Until that culture changes, the relationship between this franchisor and its franchisees has little hope of improvement. I wish it were not so. But when I was privileged to be appointed your General Counsel, I promised to “call them as I see ERIC H. KARP CAN BE REACHED AT them.” That’s ex617-423-7250 actly what I’m doing ekarp@wkwrlaw.com now.

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compostable cup of the future within the next three years—one that may include not just the cup itself, but a lid and straw to go along with it, reported Fast Company. • Keurig Dr Pepper recently announced the successful completion of the merger between Keurig Green Mountain and Dr Pepper Snapple Group.The transaction creates the seventh-largest company in the U.S. food and beverage sector and third-largest beverage company in North America, with annual revenues of approximately $11 billion. • Supermarket retailer Kroger and Nuro announced a new partnership to pilot an on-road, fully autonomous delivery service. Through this partnership, customers can place same day delivery orders through Kroger's ClickList ordering system and Nuro's app, and orders will be delivered by Nuro's fleet of driverless vehicles. • Last year, U.S. consumers uncorked $32 billion worth of wine—a number that's expected to reach $43 billion by 2022, for an annual growth rate over 6 percent, according to new research by L.E.K. Consulting. In addition, fine and premium wine sales have grown around 8 percent a year since 2012 and are on pace to hit around $25 billion by 2022. • Constellation Brands Inc., the brewer of Corona beer, is spending C$5 billion ($3.8 billion U.S.) to increase its stake in the Canadian cannabis grower Canopy Growth Corp. to 38 percent, as it seeks to grow a global cannabis empire, reported Bloomberg. The transaction is expected to close in October 2018 and may even act as a “prelude to eventual full ownership,” according to one analyst. • An ad by 7-Eleven Norway has its tourist board up in arms by promoting the country to visitors as “the land of Chlamydia,” reported Ad Age. The ad goes on to urge tourists to “protect yourself from the locals” by buying condoms at 7-Eleven. • As part of its “Start With Us, Stay With Us” campaign, Taco Bell is holding what it calls “Hiring Parties” as it looks to meet a previously announced goal of 100,000 new employees by 2022. The “Hiring Parties” offer free food, party games, on-the-spot job interviews, and gift card continued on page 60


Vice Chairs’ Forum

THE 2019 AGREEMENT: MORE THAN WHAT MEETS THE EYE BY AJINDER HANDA, NCASEF VICE CHAIRMAN, PRESIDENT, GREATER SEATTLE FOA and CHANDER SHEKHAR, VICE PRESIDENT, GREATER SEATTLE FOA

Any franchise system should aim to • Franchisee must participate in all cusprovide benefits for both the franchisor and tomer loyalty programs, and the cost of rethe franchisees. For franchisors, the primary deeming all points earned rests with the benefit is the ability to expand the brand franchisee. The details of these programs more rapidly than they could either on their are left to SEI’s future discretion. Failure to own, or through investors or lenders. The comply is an event of default, with a 15initial franchise fee and ongoing royalties day cure period. allow franchisors to fund operations at cor- • Franchisee is solely responsible for the porate headquarters, train and support fran- cost of whatever delivery programs are chisees, market and advertise the brand, mandated by SEI in the future. This may improve the quality of goods or services, include the obligation to employ additional personnel, and to acquire and insure and build the brand in the marketplace. For franchisees, benefits include: a multiple motor vehicles in the future. Failhigher chance of success than in a sole ure to comply is an event of default with a proprietorship, initial training and ongo- 15-day cure period. ing support, assistance in finding an opti- • Franchisee must participate and invest in mal site, the selling power of a known whatever digital commerce programs are brand, lower costs through group purchas- mandated by SEI, including the cost of computer-related equipment facilitating pickup ing, and brand power. In this light, many view franchising as a at and delivery from the store. This section commitment much like a marriage. A good is written broadly in a manner that would match between franchisor and franchisee, suggest that SEI can issue mandates from sharing mutual goals over the long term, is time to time requiring investment in digital essential to the success of each franchise unit, hardware, and require a franchisee to incur and thus the brand as a whole—an essential the additional costs to implement pickup factor that must be considered seriously by and delivery, with no guarantee of a corresponding benefit. both parties before any contract is signed. The new 2019 Franchise Agreement • $8,000 as grand opening exproposed by SEI defeats the purpose of “The new 2019 Franchise Agreebuilding and sustainment proposed by SEI defeats the ing a profitable franpurpose of building and sustaining a chise system in many profitable franchise system in many ways.” ways. In fact, if you read between the lines, some of its provi- pense, added for franchise agreements exesions are disastrous but innocent looking, cuted on or after January 1, 2019. This is a like the 1.5-cent per gallon commission on coercive threat hanging over the frangas or the credit card fee clause that existed chisee—and makes no sense for existing stores, only newly opened stores. in the old contracts. For example: • The more you increase sales, the higher • Franchisee may incur costs for SEI equipment. In-store music service subscriptions will be the 7-Eleven charge. • Franchisees with more than one store must are the responsibility of the franchisee. This perpetuates the built-in conflict of interest have an approved manager. • Managers must complete training to the with SEI ownership of the equipment and franchisee responsibility for maintenance. satisfaction of SEI.

“MANY VIEW FRANCHISING AS A COMMITMENT MUCH LIKE A MARRIAGE. A GOOD MATCH BETWEEN FRANCHISOR AND FRANCHISEE, SHARING MUTUAL GOALS OVER THE LONG TERM, IS ESSENTIAL TO THE SUCCESS OF EACH FRANCHISE UNIT, AND THE BRAND AS A WHOLE.” In the previous agreement there was only one event of default for which there was no notice and no cure period. Now there are 12 such events, and the cure period for many events of default has been shortened substantially. For example, the cure period for foodservice standards has been changed from 30 days to 3 days. Nearly all of the insurance responsibility and associated cost has been transferred to the franchisee and requires that the franchisee name SEI as additional insured under all of these policies. We estimate that the typical franchisee will pay approximately $230 per month for these insurance requirements. There are also broad indemnification provisions that may not be insurable. There are many more provisions in the 2019 Agreement—such as transferring payroll responsibility to franchisees, transferring indemnification responsibility to franchisees, etc.—which would make anyone think, “Why should I buy a 7-Eleven store?”: 1. Does it really support a viable franchisee system? 2. Does it really work for the long-term success of franchisees? 3. Is it really a saleable agreement? 4. Does it make any business sense? The answer to all these questions is NO, it actually goes against the fabric of any franchising system. AVANTI J U LY | A U G U S T 2 0 1 8

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Franchisee Guest Column

UNITY IS STRENGTH…AND ESSENTIAL TO OUR SUCCESS AND VERY EXISTENCE BY JACK W. RUGEN Former President UFOLINY

Have you heard the story of the old farmer who was on the verge of death and confronted his three sons? His sons used to quarrel a lot among themselves. One day, he called all his sons and gave a stick to each one of them to break, every son managed to break the stick. Then, he gave a bundle of sticks to his eldest son and asked him to break them. He couldn’t do it, and likewise, the farmer gave the bundle to his remaining sons who also failed to break them. Then, he told his sons, just like anyone can easily break a single stick, it is easy to destroy a single individual. So, if you choose to live separately after my death, anyone would take advantage of your situation and harm you. But, if you all decide to live together quite like this bundle of sticks, then none of your enemies will be able to hurt you. After hearing this, all his sons promised to live together for the rest of their lives. So, the moral of the story is unity is strength and there is strength in numbers. This situation applies to 7-Eleven franchisees, as well. If ALL our franchisees live in unity, then no one should be able to point the finger, take advantage of certain situations, or divide us. In fact, we should be able to live in harmony with our franchisor, and if a conflict arises to try to resolve it peacefully and amicably. Discussions have proven to be helpful because you tend to find a solution to avoid such problems and our franchise lives become peaceful for everyone.

There is an old saying: “If “YOUR NCASEF you want to travel fast, go TEAM IS WORKING alone. But, if you want to EVERY DAY TO travel far, go together.” What RIGHT THE WRONGS resonates when I hear this is BESTOWED UPON that to enjoy sustained sucFRANCHISEES BY cess in business or life in genOUR FRANCHISOR, eral, we need to understand AS WELL AS the power of teamwork and FEDERAL, STATE the value of solidarity. The AND LOCAL importance of building team LEGISLATURES AND spirit is particularly evident THE MEDIA.” in the education of 7-Eleven franchisees. Effective franchisee leaders can cultivate teamwork in some simple ways. First, they must lead by example and be good role models for their team members. Trust is built over time, by consistently doing what you say you’re going to do and treating your members fairly. What defines a “team player” is the willingness to accept a degree of personal loss for the team to make a gain. Leaders recognize team players in every walk of life. They are the people that drive success within any organization, and without them and their efforts, there can be no winning legacies. Your NCASEF team is just that—working every day to right the wrongs bestowed upon franchisees by our franchisor, as well “THE NCASEF AS AN ORGANIZATION, PROVIDES A RETURN as federal, state and local legislatures and the media. The National CoaliON MEMBERSHIP INVESTMENT BY CONTINUOUSLY tion’s leaders have cultivated teamDELIVERING VITAL KNOWLEDGE AND A UNIFIED VOICE ON work, fought many battles, and in ISSUES WITH OUR FRANCHISOR.” many ways improved the lives of franHowever, given our current relationship with 7-Eleven, chisees in the country substantially. Inc. and the unfairness with which they treat us, this is probThe NCASEF, as an organization, provides a return on ably not possible, which leads to resolving these matters via membership investment by continuously delivering vital mediation, arbitration, or finally, litigation. knowledge and a unified voice on issues with our francontinued on page 52 AVANTI J U LY | A U G U S T 2 0 1 8

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Franchisee Guest Column continued from page 51

“WE AT UFOLINY WARMLY THANK ALL NCASEF MEMBERS FOR THEIR SUPPORT OVER THE YEARS, AND URGE THOSE OF YOU WHO ARE NOT MEMBERS TO JOIN YOUR NEAREST LOCAL FRANCHISE OWNERS ASSOCIATION.�

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chisor. They assess business solutions with our franchisor and share ideas and address common challenges while building relationships. The board members of NCASEF urge you to leave all local politics aside because the more extensive the numbers, the more strength we have in sharing information about similar and shared experiences. And, it sends a message to corporate that we are serious about our relationship. The aggregate number of years of experience among board members and other franchisees is astonishing. The educational level is extraordinary, even for the

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most-seasoned of franchise owners. We at UFOLINY warmly thank all NCASEF members for their support over the years, and urge those of you who are not members to join your nearest local Franchise Owners Association to reap the value and comfort of other franchisees and franchise leaders. As a board member of UFOLINY and the NCASEF for over 28 years in various capacities, I have come to realize the value of the National Coalition. As I am shortly to leave the system, I feel obligated to the NCASEF and all franchisee leaders for the work they have done on our behalf. If you are not a member of an FOA, please join, and grow with us. Create a case to Accounting, giving store number, franchisee name, the address of the store or stores, telephone number and amount of dues stating that you wish to join a particular FOA nearest to your store/stores. A case number will be given to you, and the accounting analyst will close the case after completing the request.


Record Attendance for 2018 NCASEF National Convention and Trade Show SURPRISE KEYNOTE ADDRESS; TIME FOR FAMILY AND FRIENDS IN ORLANDO With a capacity crowd of 1,800 franchise owners and vendors, the National Coalition marked the 2018 convention in Orlando as the most successful in its history. The convention featured a keynote address by National Coalition Chairman Jay Singh, over 200 vendor exhibitors, information sessions to answer questions about the 2019 franchise agreement, a check presentation to Swim Across America and numerous opportunities for networking with colleagues and friends. Two Seven-Eleven franchise owners from Japan also came to the convention to meet their U.S. counterparts. The success of this year’s show can be attributed, in part, to the location, which offered franchise owners the opportunity to relax with family and friends. This year, the National Coalition hosted “A Day at Universal,” for all franchise owners and their families, and many franchisees extended their stay to enjoy other attractions, such as Disney World, Epcot and more.

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“We’ve never had a better show,” said Rehan Hashmi, NCASEF Vice Chairman. “Our businesses are run by families, and the family-friendly location was one the reasons this show was so well-attended. We were pleased to give back to our members so that they were able to take time out from their hectic schedules.” The biggest convention surprise, however, was an unannounced appearance and keynote address by former 7-Eleven President and CEO Jim Keyes, who led 7-Eleven out of bankruptcy in 1991 and helped to turn it into the world’s largest retail chain. He offered encouragement to franchisees in weathering the current crisis, and credited the franchisees for helping the company rebound back in 1991: “I learned so much from those franchisees in those few days we were together,” said Keyes. “I learned that it wasn’t personal. We had to find a way to make money at each individual store because the company was only going to be as successful as the success of each individual franchisee.” continued on page 59

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Our Heartfelt Gratitude To Our 2018 Convention Sponsors & Exhibitors DIAMOND ELITE

BRONZE

Anheuser-Busch

Altria Group Distribution Company Aon Barbot Insurance Services BIC Consumer Products Constellation Brands Dean Foods Ecolab Ferrara Candy Heineken InComm Jack Link's Kellogg's Mars Mondelez Monster Energy Company Perfetti Van Melle Swedish Match Swisher Uptime Energy

DIAMOND Coca-Cola McLane Company PepsiCo

PLATINUM Vixxo

GOLD Bang/VPX/Redline Red Bull

SILVER Advantage Solutions Bon Appetit Dr Pepper Snapple Group JUUL Labs MillerCoors Nestle Waters ROK Group

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2018 Exhibitors 5-Hour Energy Acosta Advantage Solutions Altria Group Distribution Company Anheuser-Busch Aon Arizona Beverages Atkinson-Crawford Sales continued from page 55

“We needed to hear from Jim Keyes,” said Jay Singh, NCASEF Chairman. “His heartfelt speech was

Bang/VPX/Redline Barbot Insurance Services BIC Consumer Products Big Idea Marketing Blue Bunny Bon Appetit Boston Beer Company Bug Juice CAB Enterprises Cintas Corporation Coca-Cola* Constellation Brands Cookies United Cors-U-Go CROSSMARK Convenience Dean Foods Double AA Consulting

an important reminder that we have been through tough times before and we will work hard to get through this period. Jim Keyes always understood that franchisees are the brand. It’s a crucial point our CEO and others in power at 7-Eleven are failing to recognize”

Dr Pepper Snapple Group DS Tiger DTT Eastland Food Corp Ecolab EDGE Ferrara Candy FIJI Water & Wonderful Pistachios General Mills Hain Celestial Group Heineken Hershey Company In Motion Design InComm Innevape Insignia Brands Jack Link's Johnsonville Sausage JTI USA JUUL Labs KanPak Kellogg's Kretek Loacker USA Mars

Jim Keyes shared anecdotes about his time at the helm of 7Eleven, including how he fought others at corporate when he wanted to sit down with franchisees at the NCASEF convention to hear directly from franchisees. Following Keyes’ address the National Coalition officers presented Swim Across America a $100,000 check for cancer research, and recognized Anheuser Busch, Coke, Pepsi,

McLane Company MegaMex/Hormel MexSnax MillerCoors Mondelez Monster Energy Company Mother Parkers Tea & Coffee Nature's Bounty Ne-Mo's Bakery Nestle Professional Nestle Waters Nutraplex Bar ONE Brands Pabst Brewing PepsiCo Perfetti Van Melle Promark PWM Electronic Price Signs Red Bull Reddy Ice ROK Group Sparkling Ice/Talking Rain Spike LLC SRP Companies St. Killian Importing Swedish Match Swisher ThinkThin Twang Partners Tyson Foods United Brands Uptime Energy Utz Quality Foods Vixxo White Castle

McLane and Vixxo with the Chairman’s Vendor Recognition Award for their continued sponsorship at the convention.

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SPECIAL NACS

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

• One copy of NACS Magazine (monthly publication).

• Discounts to all NACS events.

• NACS Daily News e-newsletter.

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

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

• Access to NACS Help Desk, an information resource that provides answers to retailer member questions and facilitates greater industry connections. • Full voting rights as a NACS Domestic Retail member. • Potential for consideration as NACS Board or Committee Member.

NACS membership is available to any NCASEF member who operates a total of four (4) or less stores and is not a current member of NACS in 2018. NCASEF members who joined NACS previously at the $40 rate can renew based on the instructions they have received via e-mail and by mail.

To Join: Email NationalOffice@NCASEF.com and ask for the NACS Membership Application, which can be returned by email, fax or U.S. Mail. If you have questions about NACS membership for NCASEF members, please contact VP Member Services Michael Davis, at mdavis@convenience.org or NACS Retail Membership Manager, Eboni Russell, at erussell@nacsonline.com or (703) 518-4271.

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signing bonuses. • The U.S. Supreme Court ruled recently that Internet retailers must collect sales taxes in states where they have no physical presence, reported Supermarket News. The ruling in South Dakota v. Wayfair Inc. et al, nullifies the decades-old precedent that allowed catalog and mail order sellers—and later, online retailers—to forgo sales tax collection in states where they lacked a physical location. • A San Francisco Shell station has a robot as extra security for those at the pumps, reported KTVU Fox 2. The robot has four cameras and rolls at 3 mph—about the same pace as a person walking—while it continually scans and records. • Seattle's sweetened beverage tax raised about $1 million more than predicted in its first three months, reported the Associated Press. The city's budget office estimated the tax would raise $14.8 million in its first year. • The PepsiCo Foundation recently announced the launch of “All In On Recycling,” the largest ever industry-wide residential recycling challenge to make recycling easier for 25 million families across the country, providing them with the resources they need to recycle more and recycle better. • Private brand performance within the grocery channel dramatically increased in the past year, posting annual sales of $138 billion across multi-outlet plus convenience store retail channels in the U.S. in 2017, according to new insights from Food Marketing Institute and IRI. • Walmart and shopping mall operator DDR Corp. have teamed with Waymo on a trial program to shuttle passengers in self-driving minivans to their retail stores, reported Bloomberg. The trial is starting small, operating only in a suburban region of Phoenix, Arizona—where Waymo’s already running a test—and with only select passengers invited into the free program. • Motiva announced recently that it has expanded the 76 brand into Florida, making it the 10th state to have 76 gas supplied by Motiva. Located in 35 cities from Jacksonville to Naples, the company said the 76 stations will span the entire state. • Eco-friendly company Repurpose continued on page 62

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year-on-year to 55.4 billion yen. At its overseas convenience store business— which include around 9,500 stores in the United States and 10,500 stores in ailand—sales surged 33 percent year-onyear to 9.4 billion yen.

Retail Sector Rebound Boosts Wages Aer one of its toughest years ever, U.S. “brick and mortar” retailers are witnessing a rebound and boosting wages for hourly workers, reported Reuters. Wages have grown for cashiers and retail buyers among others, a sign that a tight labor market is finally translating into base-pay gains for workers at retailers, according to data gathered from millions of U.S. worker salaries by Glassdoor, a job website operator. e study shows wages for retail cashiers in July grew by 5.4 percent to $28,145 from a year earlier and rose 2.1 percent to $58,090 annually for retail buyers, who purchase merchandise from manufacturers.

Amazon Opening Second Go Store In Seattle Amazon is sticking to its hometown for the second location of its cashierless convenience store, with plans to open a second Go store this fall in downtown Seattle, reported the Seattle Times. e checkout-free store will be located in the heart of the city’s business district on the corner of Fih Av-

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enue and Marion Street. Amazon confirmed this spring that it planned to open future stores in Chicago and San Francisco, though it didn’t say when. Go stores seem destined for concentrated urban areas, where office workers search for lunch options. e first Go store is 1,800 square feet and sells typical convenience store fare. It’s staffed with employees making deli sandwiches and other prepared meals and workers to help customers, but was criticized by the grocery-store workers’ union for a level of automation that cuts jobs.

Walmart Testing Cashier-Less Shopping Walmart continues to pursue its own versions of cashier-less checkout, including a pilot program in 350 stores called “Check Out With Me” that is expected to expand, reported DigiDay.com. e program allows associates with handheld devices to ring up customers' purchases then email them a receipt. e company is also studying customer comfort levels with automated payments. At this point, Walmart said it is not ready to get rid of cashiers— they’ll just be part of a bigger menu of customer checkout choices. Walmart would not comment on whether fully automated stores are in its plans, but said early results of the “Check Out With Me” program are encouraging, and the retailer plans to roll out this service to more stores.

Second Unstaffed 7-Eleven Opens In Taipei 7-Eleven recently opened its second unstaffed X-Store in Taipei, relying on AI (artificial intelligence) and IoT (Internet of ings) technologies to serve customers, reported DigiTimes.com. Customers are identified through either using continued on page 64

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recently launched what it calls the first flexible, single-use Compostable Straws. These bendy straws are strong and durable, so they won’t crack mid-sip, and are BPA-free, chlorine-free, and nontoxic. • A research report by UBS estimates that by 2030, online food delivery could command 10 percent of the total food services market—which translates to $365 billion in market share, up from $35 billion today, reported Business Insider. The study also finds that millennials are three times more likely to order in than their parents are. • U.S. retail spending on general merchandise categories at brick and mortar stores rose 8 percent in Q1 2018 compared to Q1 2017, outpaced by increases in the top 20 Hispanic communities, which showed 12 percent growth during the same period, according to a new report by The NPD Group. • As part of a new joint initiative of Keep America Beautiful and Philip Morris USA, for a limited time U.S. convenience stores can request free litter stands to collect cigarette butts, reported NACS Online. According to Keep America Beautiful, every litter stand reduces the littering rate for cigarette butts by 9 percent. • Starbucks announced that it will open its first “Signing Store” in the U.S. in Washington, D.C. this October, which will run using American Sign Language (ASL). The store will be located near Gallaudet University, a school designed for deaf and hard-of-hearing students, and will be staffed by a mix of hearing and deaf employees, all of whom are proficient in ASL. • Tobacco firm Imperial Brands is investing in UK biotech company Oxford Cannabinoid Technologies, as campaigning to allow marijuana products for medicinal purposes in England picks up pace, reported BBC News. • Subway is launching an $80 million merchandising program with help from its vendor partners to modernize its aging U.S.-based stores, reported Nation’s Restaurant News. The Fresh Now program is currently in test at 480 domestic restaurants. Franchisees, who pay into the ad fund will not have to spend additional fees for the upgrades. • The average number of vehicle trips made by a household in 2017 was 20 continued on page 70


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gredients and Chick-fil-A chicken, and designed for customers to cook at home. e kits will sell for a limited time at 150 metro Atlanta Chick-fil-A restaurants. Customers can purchase the kits in the drive-thru, at the counter or via the Chick-fil-A One app. Unlike most other meal-kit concepts, no subscription or call-ahead ordering is required. Kits are packaged in 100-percent recyclable, compostable boxes and do not include freezer packs or insulated foam. During the test period, which runs through November 17, Chick-fil-A will rotate five chicken meal-kit recipes: Chicken Parmesan, Chicken Enchiladas, Dijon Chicken, Pan Roasted Chicken and Chicken Flatbread. Each kit serves two people and costs $15.89. Meals are designed to be ready in 30 minutes. Apart from cooking oil, the kits do not require any additional ingredients

an electronic wallet card or facial recognition via a biometric system equipped with NeoFace, an AI engine developed by Japan-based NEC. Upon identification, personalized words are displayed by a screen and spoken by a smart robot to welcome the customer. A point of sale/service system integrated with image recognition technology can recognize merchandise items purchased by a customer for calculating total price. President Chain Store, which runs the 7-Eleven chain in Taiwan, opened its first unstaffed store in January 2018 at its headquarters initially for use only by its employees. e second store in Taipei is open to the general public around the clock.

Chick-fil-A Testing Meal-Kits Chick-fil-A recently became the first quick-service restaurant in the country to enter the meal-kit market, reported the Atlanta Journal-Constitution. e Atlanta-based fast-food chain has launched a new product called Mealtime Kits, made up of fresh, pre-portioned in-

Kroger Launches New Home Delivery Service

Seeking to keep up with its online competitors, national grocery chain Kroger Co. recently “Chick-fil-A is the launched a new home delivery service, refirst quick serve ported the Milwaukee restaurant to offer Journal Sentinel. is meal-kits for cus- is the latest move by tomers to cook at Kroger to maintain and grow its market

home.”

share amid fierce competition and the continued splintering of the traditional grocery store market in the U.S. e delivery service, known as Kroger Ship, will initially roll out in four markets: Cincinnati; Houston; Louisville, Ky.; and Nashville, Tenn. Kroger plans to expand the service to additional markets in the coming months. Kroger Ship offers shoppers bulk and smaller orders of groceries sent directly to their homes. No fresh, frozen or refrigerated items are available yet on the service, but there are 50,000 pantry items to choose from. Customers ordering more than $35 worth of items get free shipment, otherwise there will be a $4.99 delivery charge aer an initial launch phase.

Jack Stout Named New Senior VP Merchandising SEI has chosen Jack Stout as its new senior vice president, merchandising, marketing and demand chain, reported Convenience Store News. Stout replaces former Executive Vice President and Chief Merchandising Officer Jesus Delgado-Jenkins, who announced in June he was retiring from 7-Eleven to spend more time with his family. In his new role, Stout is responsible for SEI’s merchandising operations; category management; new product introductions; new category and continued on page 66

Legislative Update continued from page 24

minimum purchasing age from 18 to 21 had received overwhelming final approval in the Democratic-controlled House and Senate and was signed into law by Gov. Charlie Baker on July 27. Massachusetts joins California, Hawaii, Maine, New Jersey and Oregon with similar bans. e Massachusetts law

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takes effect in January. e new law also broadens existing prohibitions on public smoking to include e-cigarettes, and prohibits the use of tobacco products on the grounds of any primary, secondary, or vocational school. In addition, the law bans the sale of tobacco products by any pharmacy that offers health care services.


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profit center development; store sets; marketing and merchandise communications; and fresh foods and commissaries, as well as distribution centers.

E-Cig Sales Spike A new study by the Centers for Disease Control and Prevention shows that e-cigarette sales skyrocketed by 132 percent while their prices fell substantially between 2012 and 2016, especially prices for rechargeable devices, reported U.S.

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News & World Report. Researchers measured average monthly sales and prices for four types of e-cigarette products—including rechargeables, disposables and prefilled cartridges—in the 48 contiguous states and the nation's capital, and did not include online or vape shop sales. E-liquid sales were measured between 2014 and 2016. Average monthly sales for rechargeables increased 154 percent between 2012 and 2016, according to the CDC, while the average price of the devices fell by

National Coalition Board members representing 31 FOAs met July 21 at the Gaylord Palms in Orlando for two days just preceeding the “Franchisees ARE the Brand” NCASEF convention and Trade Show.

Treasurer Jas Dhillon with Executive Vice Chairman Michael Jorgensen during the financial report. Chairman Jay Singh presiding over the meeting.

Southern California President Paul Lobana.

Japanese franchisee Keiji Sato (seated, right) and Yoshitaka Takahashi (seated, third from right), from the Japan Association of Convenience Store Franchisees’ Union, with the NCASEF officers.

nearly half. In 2016, a monthly average of 766 prefilled cartridges were sold per 100,000 people—a higher rate than that of any of the other vaping products. e cartridges, also called pods, sold for an average of $14.36 per five-pack.

NY Business Owners Fear Rising Minimum Wage

Orlando Board Meeting In July

General Counsel Eric Carp delivered an in-depth analysis of the new Franchise Agreement released the week before.

“E-cigarette sales skyrocketed by 132 percent while their prices fell substantially between 2012 and 2016.”

New York business owners may be divided on the idea of raising the minimum wage at the end of the year to $15, but they all agree that it will force changes in how they operate, reported the New York Post. Some employers who have 10 or fewer employees are fearful of being crippled by soaring payroll and may cap hiring in the coming year. Other local owners are rapidly switching out many low-paying service workers for robotic technology, computerized sales and outsourcing deliveries. Employers with 10 or fewer workers have until December 31, 2019, to raise the minimum wage to $15 hourly from the present $12. Bigger establishments must enact the $15 hourly—from $13 today— by year’s end.

Seven-Eleven Japan Ends Draft Beer Sales Seven-Eleven Japan has suspended its planned sale of dra beer over concerns that its convenience stores and cashiers could be overrun by customers seeking low-cost suds in the summer heat, reported the Asahi Shimbun. Sales were continued on page 68

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scheduled to start in areas around Tokyo on July 17, and the scheduled price for the beer was 100 yen ($0.90), including tax, for a small size and 190 yen for a medium size. But videos of the beer-serving machines installed next to cash registers of several Seven-Eleven stores spread rapidly on social media networks around July 13. Seven-Eleven Japan said its headquarters was also inundated with inquiries about which stores would be involved in the dra beer sales. “We judged that we would be unable to establish an adequate setup at the outlets,” SevenEleven Japan said in a statement. e company said it has not decided on its future plan for the dra beer.

McDonald's Spends Big On Nationwide Makeovers McDonald's and its franchisees are investing about $6 billion to update restaurants with modern design features and new technology over the next two years, reported the Associated Press. According to McDonald's, the transformed restaurants will feature modernized dining rooms with globally and locally in-

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spired decor, new furniture and refreshed exterior designs; digital selforder kiosks; remodeled counters to allow for new table service; digital menu boards inside and at the drive through; new designated parking spots for curbside pick-up through mobile order and pay; and expanded McCafé counters and larger display cases. In addition to the investments to modernize the restaurant, McDonald's has also introduced McDelivery with Uber Eats at more than 5,000 U.S. restaurants.

Kroger Considers Expanding Visa Credit Card Ban Giant supermarket chain Kroger will stop accepting Visa credit cards at its Food Co. stores in California in order to

save on the high costs associated with Visa's interchange rates and network fees, and may expand the ban, reported USA Today. Foods Co., part of Kroger's California-based Food 4 Less Stores subsidiary, said 21 supermarkets and five gas stations in central and northern California are no longer accepting Visa credit cards as of August 14. But the action could be more far-reaching. Cincinnatibased Kroger is considering expanding the ban to more of its stores, a company spokesman said. Kroger is concerned that Visa's rates and fees are among the highest charged. e grocer said the move will save customers from higher prices.

Beer Remains The Preferred Alcoholic Beverage Americans who drink alcohol continue to say they most oen choose beer (40 percent) over wine (30 percent) and liquor (26 percent), according to Gallup's annual Consumption Habits poll. Beer has typically been the preferred alcoholic continued on page 70

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

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

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

bhullar711@yahoo.com 818.571.1711

rehan711@yahoo.com 847-845-8477

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

National Office

425-438-8381 ajinderhanda@hotmail.com

nationaloffice@ncasef.com


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blockchain to remake how the industry beverage in Gallup's trend. e latest retracks food worldwide, reported the sults also reveal that beer is most popular Wall Street Journal. e so-called Food among men; this year, 62 percent of male Trust aims to improve recalls, quickly drinkers say they prefer beer, compared identifying the issue and shrinking the with 19 percent of female drinkers. Lesstime consumers are at risk. Business educated and middle-income Americans benefits such as avoiding losses from also tend to choose beer. Meanwhile, 38 overly broad food recalls are also expercent of U.S. adults totally abstain from pected. Blockchain establishes authoralcohol. at figure has remained below ship or ownership that experts say can’t 40 percent since 1997. be faked and eliminates costly middle e majority of American adults conlayers because of its peer-to-peer strucsume alcohol at least occasionally, with the current 62 percent figure nearly matching the 63 percent histor“Of 62 percent of Americans ical average in Gallup's trend dating back to 1939. e perwho drink, 40 percent prefer centage of Americans who beer, 30 percent wine, and 26 drink has been fairly steady over nearly eight decades, with percent liquor.” a few exceptions. e drinking percentage held near 70 perture. e encrypted data stays up-tocent in the late 1970s and early 1980s. e date on all participants’ systems. figure dipped below 60 percent at several The Food Trust group—which points between the 1930s and 1950s, as well also includes Dole Food Co., as in select polls from 1989 to 1996. Driscoll’s Inc., Golden State Foods, Kroger Co., McCormick and Co., Tyson Foods Inc. and Unilever NV— wants to set new standards for the rest of the food industry. “We are competitors, yes, but working together to ensure the trust of conTen of the world’s biggest compasumers,” says Chris Tyas, global head nies—including Walmart Inc., Nestlé of supply chain at Nestlé. SA and McLane Co.—are building a

Blockchain Effort Seeks New Standards On Food Tracking

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Play The Name Game! Look carefully at each page in this issue. Somewhere in this magazine a line is hidden that contains the words $Name Game Winner + person’s name + city$. If you find this line, and it contains your name, call AVANTI’s Offices at 215 750-0178 before the next magazine is published, and win this issue’s total. NCASEF Members only. 70

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percent lower than in 1995, reveals the U.S. Department of Transportation’s National Household Travel Survey. The rise in internet shopping, telecommuting, and social networking via the internet may be a factor in the decline, the agency said. • Police in Detroit are looking for two suspects who allegedly managed to hack a gas pump and steal over 600 gallons of gasoline, valued at about $1,800, reported Gizmodo. The theft took place in the middle of the day and went on for about 90 minutes, with the gas station attendant unable to stop the hackers. • Coca-Cola incentivized recycling during the recent Special Olympics USA Games in Seattle through reverse vending machines that allowed visitors to deposit PET bottles or aluminum cans, reported Vending Times. The deposit of each recycled container triggered a 5¢ donation to Special Olympics Washington through the Coca-Cola Give platform. • Dollar General kicked off the recent grand opening of its 15,000th store—located in Wilmington, North Carolina—by hosting a community celebration and donating $15,000 to five local schools to support literacy and education initiatives. • Amazon announced that more than 100 million products were purchased during its 36-hour Prime Day event on July 16-17, and more new Prime members signed up than on any other day in Amazon’s history. All estimates point to Amazon exceeding some $3.5 billion in sales on Prime Day 2018, up from $2.4 billion last year. • Walmart announced that it has teamed up with startup Alert Innovation to launch a pilot using first-of-its-kind automation to help associates fill online grocery orders faster. Called Alphabot, the system consists of automated mobile carts that will retrieve ordered items then deliver them to store associates who will consolidate the items in the order. • American drivers have logged 5 billion miles on E15 fuel (15 percent ethanol, 85 percent gasoline), according to biofuel trade association Growth Energy. The latest milestone was reached in the midst of Reid Vapor Pressure (RVP) restrictions on the sale of E15 fuel across most of the country, the group said. • Starbucks plans to eliminate plascontinued on page 78


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www.ncasef.com

What Are We, Chopped Liver? By Nisar Siddiqui, Midwest FOA Vice President When I moved to Michigan in 2001 from California (not quite sure why, so please do not ask), Jeff Schenck was our Division Vice President. During this time, Michigan’s market was flourishing—it was designated as one of the top areas to test new products before they went national. Michigan was in the limelight, sales were up, and the National Coalition officers were making frequent trips here to boost our morale. Michigan is still making money for SEI. We are still profitable, due to the fact that labor and operating costs are much less than in other states. Do “MICHIGAN IS STILL not forget we are known MAKING MONEY FOR as the “Slurpee State”— the headquarters for high SEI. WE ARE STILL Slurpee sales. PROFITABLE, DUE TO

THE FACT THAT LABOR AND OPERATING COSTS ARE MUCH LESS THAN OTHER STATES.“

The Midwest FOA has donated to local charities, including the Troy Police and Fire Departments, plus C.S. Mott Children's Hospi-

tal. The Midwest FOA over the past four years has dedicated its efforts to bridge the gap of communication between franchisees and corporate. In the past, local SEI management would attend our general meetings and trade shows. However, as of recent, they have not been able to attend. Additionally, the National Coalition officers have not participated in any of our events nor coordinated meetings in Michigan to include the franchisees in the Slurpee state. I speak on behalf of the 7-Eleven franchisees of Michigan when I say we still need occasional boosts from the National Coalition and we need to be a priority for SEI to maintain our image with quality and store appearance. I feel the National Coalition should consider having trade shows or their quarterly meetings in Michigan. We the franchisees of Michigan no longer want to be chopped liver. Rather, we want to be the main entree.

Franchisee Awarded For Community Service

Utah FOA President Wallace Imamura, franchisee Lani Roberts, and NCASEF Executive Vice Chair Michael Jorgensen. 72

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NCASEF Executive Vice Chair Michael Jorgensen recently attended a Utah FOA meeting and presented franchisee Lani Roberts with a special award recognizing her community outreach efforts. With the help of her customers who contribute generously to the donation collection canisters in her store, Lani raises funds to assist those less fortunate and in need within her community, like the homeless teenagers in Salt Lake Valley. Lani, who was unable to attend the NCASEF convention in Orlando in July to receive the honor, serves as a shining example of how franchisees throughout the country give back to the neighbors their stores serve.


Register Online NOW for the NCASEF Convention & Trade Show www.ncasef.com

SEI & AIRHEADS LAUNCH MYSTERYFLAVORED SKUS SEI has teamed with Perfetti Van Melle’s Airheads to launch a beverage and frozen treat inspired by the brand's “White Mystery” flavor under the private label 7-Select, reported Shopper Marketing. The 7-Select Airheads White Mystery frozen push tube SKU and premium beverage (crafted by Jones Soda Co.) were first spotted in stores in June. Both items depict several question marks on the packaging to communicate the flavor is a mystery. In stores, power wings stocking exclusive Airheads White Mystery candy bites tout the beverage and frozen items, encouraging shoppers to “check out these sweet White Mystery treats too.” 7-Eleven and Airheads are also indirectly drumming up support for the SKUs by running an exclusive sweepstakes, awarding 100 winners 20,000 7Rewards points and 350 runners-up 10,000 points. Loyalty members were automatically entered into the sweeps with any Airheads purchase from June 27 to August 28.

FOOT TRAFFIC SPIKES ON 7-ELEVEN DAY A new study by GasBuddy found that on July 11, 2018, or 7-Eleven Day, the average visits per store with gas stations increased 43 percent when compared to the previous 30-day period. When compared to the previous four Wednesdays—including Independence $name game winner Ellis Harber, Denver, CO$

Day on July 4—there was a 51 percent increase in station visits. Of the 7,895 7Eleven locations in the United States, more than 2,400 sell fuel. Examining the impact the campaign had on market share, GasBuddy narrowed down the focus to the Dallas-Fort Worth designated market area, where there is the highest con- July 11. The featured Slurpee flavor was centration of 7-Eleven Cap'n Crunch's Crunch Berries, recrestations selling fuel in the ated as a frozen treat from one of AmerU.S. GasBuddy data ica's most beloved cereal brands. 7-Eleven also celebrated found there was a 36 its birthday with $1 Big percent increase in Bite hot dogs. market share on July For 7Rewards mem11 compared to the past “A study bers, great deals continfour Wednesdays. Typiby GasBuddy found ued the entire birthday cally ranked #3 in footthat on July 11, 2018, or week, with a new one fall traffic behind Shell 7-Eleven Day, the average each day. For hungry and QuikTrip, 7visits per store with gas customers wanting to Eleven jumped to the stations increased 43 pertry something new, 7#1 spot in the area on cent compared to the Eleven introduced its that day. In GasBuddy’s previous 30-day Bistro sandwiches, made Q1 footfall traffic report, period.” with premium quality ingre7-Eleven was ranked third in dients on fresh-baked bread. Purthe 1000+ location category. chase of a 7-Eleven Bistro sandwich with a single-serve bag of 7-Select chips FREE SLURPEES earned 400 7Rewards points.

ON 7-ELEVEN DAY

7-Eleven celebrated its birthday this year with its customary free Slurpee giveaway followed by “seven deals in seven days,” which gave hungry Slurpee drink fans an opportunity to try some of the newest 7-Eleven fresh food menu items, from artisan sandwiches to decadent brownies. Participating U.S. stores gave away an estimated 9 million free small Slurpee drinks from 11 a.m. to 7 p.m. on

WEEKLONG ‘BACK-TOSCHOOL’ SLURPEE BOGO OFFER SEI kicked off Share-a-Slurpee drink fun with a seven-day Buy One-Get One Free (BOGO) Slurpee drink event beginning August 13 and running through August 19. Customers who bought any size continued on page 76

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or flavor Slurpee drink at participating 7-Eleven stores nationwide were able to receive a second Slurpee drink free. The free Slurpee drink had to be the same size as the one purchased or smaller, and had to be redeemed at the same time the purchased Slurpee drink was bought. The featured Slurpee flavor was the bright blue Cap'n Crunch Crunch Berries. During the Buy One-Get One Slurpee drink

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event, both the purchased and free Slurpee drinks counted toward the 7Rewards "Buy Six, Get the Seventh Free" drink offer available on the 7-Eleven smartphone app.

SECOND ANNUAL NATIONAL NIGHT OUT For the second year in a row, 7-Eleven had its customers' backs by collaborating with National Night Out, a community-

building campaign to promote safer neighborhoods. Participating stores in North Carolina, South Carolina, Southern Virginia and West Virginia leveraged in-store promotions on August 7 as part of the sponsorship. Customers who visited a participating 7-Eleven store between 7 a.m. and 11 p.m. on that date and mentioned National Night Out received a free small beverage. The promotion included a free small coffee, Gulp fountain drink and Slurpee semi-frozen beverage. National Night Out is an annual community-building campaign created by the continued next page


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National Association of Town Watch to promote police-community relationships and neighborhood camaraderie to make neighborhoods safer.

REDUCED EMISSIONS FUEL PROGRAM EXPANDED SEI recently announced the expansion of its RENEW reduced emissions fuel program to 142 additional fuel stores and 698 non-fuel locations for a total of 934 locations. The second phase will launch in California, Oregon, Wash-

ington and British Columbia, Canada, in September. The company said 70,000 trees have been planted and 24,000 metric tons of carbon emissions have been offset in less than a year via the program, running in 7Elevens in Portland, Oregon, Seattle, Washington, and Madison and Milwaukee, Wisconsin. The RENEW reduced emissions program is a collaboration between 7-Eleven

and GreenPrint, a company that promotes sustainability through the retail gasoline, fleet and consumer product industries. Customers reduce emissions by purchasing the same highquality fuel they have always pumped at 7-Eleven stores. GreenPrint calculates tailpipe emissions from gasoline sales to determine the amount to invest in certified carbon reduction projects. The goal is to help neutralize emissions in the atmosphere by up to 30 percent and supcontinued on page 78


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port local nonprofit organizations and plant trees in conjunction with the Arbor Day Foundation.

TONGUES OF FUN FOR 'STICK OUT YOUR TONGUE DAY' Participating 7-Eleven stores across the country celebrated National Stick Out Your Tongue Day on July 19 by offering Slurpee tongue straws. Available in four shapes and colors—and for a limited time—the exclusive tongue straws had a suggested retail price is $1.69. Slurpee drink fans were also invited to stick out their tongues along with a Slurpee tongue straw in the company’s first ever Sun's Out-Tongue's Out Sweepstakes. By posting the craziest pix on Facebook, Instagram or Twitter with the hashtags #sunsouttonguesout and #sweepstakes, one lucky person was chosen in a random drawing to win a free year of Slurpee drinks, or one medium size per day for 365 days (approximately $550 value).

7-ELEVEN & COCA-COLA WORLD CUP PROMO 7-Eleven and Coca-Cola invited soccer fans to celebrate the World Cup tournament with the “Predict and Score!” sweepstakes featuring a $50,000 grand prize and 7Rewards customer loyalty platform points. During the pro-

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tic straws globally by 2020, reported USA Today. motion, U.S. The company said it will use recyclable strawless lids shoppers were and an alternative-material straw option in its more than 28,000 stores around the world. • McDonald's able to purchase specially marked recently celebrated the 50th anniversary of “Share a Coke” cans to receive unique its iconic Big Mac burger by giving out “Maccodes to play the “Predict and Score!” Coins,” reported USA Today. Customers who purgame in the 7-Eleven app. Each week chased a Big Mac on August 2 received a coin, which through July 15—the final day of the can be redeemed for a free Big Mac throughout the World Cup—a bracket featuring uprest of 2018. • Bank of America recently ancoming games and teams appeared in nounced that deposits made on smartthe 7-Eleven app, and parphones and tablets are outpacing those ticipants had to choose made at branches for the first time, reported their picks to win CNN Money. The bank said customers logged “SEI has that week. Each into its mobile app 1.4 billion times last expanded its time they played, quarter. • Target has brought its Drive RENEW program Up curbside delivery service to 200 a 7Rewards memto 142 fuel and more stores in the Midwest and ber earned 10 South, reported Supermarket News. With 698 non-fuel points, plus 5 the expansion, more than 800 stores in 25 stores.” points for each corstates now offer Drive Up service for online purrect prediction. chases of groceries, household essential items and Players who predicted corother products. • Amazon's e-commerce sales in rectly moved up the leaderboard after the U.S. are expected to reach $258.2 billion each week's winning soccer teams were this year, up nearly 30 percent from a year ago, redetermined. The four fastest “Predict ported CNBC. That means Amazon is expected to and Score!” players at the top of the capture nearly half of the U.S. e-commerce market by leaderboard when the championship the end of 2018. Amazon ended 2017 with about 44 percent of the market. • Starbucks is teaming up game concluded on July 15 won prizes: with Microsoft and global exchange com1st—$2,000 Delta Vacations gift card; pany International Exchange to create an inte2nd—$1,000 Best Buy gift card; 3rd— grated platform that would enable customers to pay $600 Best Buy gift card; and 4th—a yearfor orders with cryptocurrency, including Bitcoin, long sports streaming package. The next reported Chain Store Age. • A new app called five players in the ranking received SmartLabel enables consumers to get easy 10,000 7Rewards points. Thousands of access to extra, detailed information about 7Rewards points were awarded to the the grocery products they buy—like what inbalance of the top 300 players. Finally, all gredients are included, why those ingredients are in “Predict and Score!” game winners, the product, what they do, and even where they along with other eligible entries received, come from—by simply scanning a product’s QR code. • Coca-Cola China has teamed up with YI were entered into the sweepstakes for a Tunnel to build the first Artificial Intellichance to win $50,000. gence-based self-service smart freezer. CusThe winner will be drawn tomers scan a code to open the door, take a soon after the sweepstakes Coca-Cola product from the freezer, and the money is entry period ends on Autransferred to the store’s account. gust 31.


Portable & Poppable Skippy P.B. Bite Minis

ited time offer: buy any two Ritz Crisp & Thins 1.7 oz. for just $2 from August 29, 2018 to November 06, 2018. Shoppers already love the lighter, wholesome taste of Ritz Crisp & Thins, which has 50 percent less fat than the leading potato chip with all the flavor you would expect from Ritz. Oven baked, not fried, they’re a better way for shoppers to satisfy their snack time urge—now with an exciting spicy, smoky twist.

The makers of the Skippy brand have taken the big taste of real Skippy peanut butter and put it into mini bite-sized snacks with new Skippy P.B. Bites Minis. Spice up sales with oven baked Portable and poppable, this new Smoked Chipotle Ritz Crisp & Thins. snack is packed with peanut buttery goodness. Skippy P.B. Bites Minis in Graham and Consumers are looking for proDouble Peanut Butter flavors. tein-rich snack options that are Sour Patch Kids Zombies are invading 7-Eleven stores. The exclusive also quick and convenient to meet an on-the-go lifestyle. Skippy P.B. 5 ounce bag is coming only to 7-Eleven FOD SeptemBites Minis come in two delicious varieties—Graham and Double ber 3, 2018. Once unleashed, there’ll be no escaping Peanut Butter—meeting both creamy and crunchy snacking preferthe Sourpocalyse. ences. In line with snacking trends, Skippy P.B. Bites Minis offer over For a limited time, an exclusive “to die for” deal 6 grams of protein per serving, packing this portable snack with a promises to unearth even more shopper excitement. craveable boost of energy to satisfy the snacking needs of peanut From August 29, 2018 to November 6, 2018, Sour butter-loving consumers, anywhere, anytime. Patch Kids and Swedish Fish Soft & Chewy Candy Merchandise in your Alternate Snacks Section. Packed 10/1.5 4-5 oz. packages are just 2 for $3 to drive trial and ounce peggable units in display ready caddy. Retails at $1.99. Sour Patch Kids Zombies help spread the Sour Patch Kids pathogens. • Skippy P.B. Bites Minis Double Peanut Butter: McLane UIN are coming early September. continued on page 82 051897; Core-Mark DCMS 454419; UPC 37600810043; SLIN 00234 • Skippy P.B. Bites Minis Graham Cracker: McLane UIN 051907; Core-Mark DCMS 454418; UPC 37600810081; SLIN 00235 Elevate all-day sales this fall with a real crowd-pleaser: Kellogg’s Frosted Pumpkin Pie Pop-Tarts. Available to c-stores for a limited time only, Pumpkin Pie is the #1 seasonal Pop-Tarts favorite at retail (Harris Poll Nielsen). Great to eat on-the-go or enjoy later, these Pop-Tarts deliver the seasonal flavors 63 percent of consumers enjoy. Frosted Pumpkin Pie Pop-Tarts feature a heavenly pumpkin pie-flavored Get ready to turn up the heat on your filling with cinnamon, nutmeg, ginger and cloves surrounded by a golden snack sales with new Smoked Chipotle Ritz crust and topped with sweet, white icing and fall-colored crunchlets. Crisp & Thins, available now. Following the Kellogg’s flexible, easy to merchandise counter display holds 24 packs. highly successful launch of Ritz Crisp & Thins Strategically place the merchandiser near the coffee bar or checkout counter last year, Ritz is keeping sales rolling with the for increased bundle purchases and basket rings. Or order product without on-trend, crowd-pleasing taste of chipotle. merchandiser to shelve with other Pop-Tarts flavors. Pumpkin Pie Pop-Tarts With chipotle flavored snacks up 34 percent bring attention to the toaster pastry category and turn just as fast as key core flavors like Strawberry and Brown Sugar Cinnamon (Nielsen AOD Total in 2016 alone (Source: Nielsen), new Smoked Convenience, Units per store per week latest 26 weeks ending 1/20/18). Chipotle Ritz Crisp & Thins promise to be a Consumers look forward to the annual seasonal offerings from Pop-Tarts, Drive seasonal impulse hot seller. sales with Limited Edition especially Pumpkin Pie. The buzz on this flavor starts on social media at the To build buzz and drive traffic for Smoked Kellogg’s Frosted Pumpkin first sign of fall and gains momentum through November. Don’t miss out on Chipotle Ritz Crisp & Thins, Ritz is lighting a Pie Pop-Tarts. offering this wildly popular, limited edition flavor at its peak of popularity. fire under your shoppers with a valuable lim-

Sour Patch Kids Zombies Are Coming

SEASONAL FAVORITE FROSTED PUMPKIN PIE POP-TARTS

New Smoked Chipotle Ritz Crisp & Thins

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Featuring “zombified” grape and orange Sour Patch Kids in fun theme packaging sure to grab shoppers’ attention, Sour Patch Kids Zombies promise to attract swarm after swarm of shoppers with excitement that just won’t die. With monster media support featuring 7Eleven the entire month of October, a savage social media campaign, giveaways through the 7Rewards app for World Zombie Awareness Day, and eye-popping point of sale, all sights are locked on supernatural sales. Floor stand FOD is August 20, 2018, so order now.

stores nationwide. It is offered in “2 for 99¢”, “Save on 2”, and “2 for $1.49” options. Swisher Sweets Coastal Cocktail is sure to be a customer favorite from coast to coast. This edition of Swisher Sweets is available only while supplies last. For more information or to place an order, contact your Swisher representative at 1-800-874-9720.

MegaMex Unveils Wholly Guacamole Snack Cups

Xyience recently announced two new flavors—Wild Grape and Fuji Apple. Like all other Xyience flavors, both are made with all natural flavors and colors. Grape is one of the leading and fastest-growing flavors in the Zero Calorie Energy Drink segment (IRI New Xyience L52 w/e 4/22/18). Xyience Wild Grape is Wild Grape and bold, fruity and well poised to capitalize on Fuji Apple are this recent Zero Calorie flavor trend. Xyience made with all natural flavors and colors. Fuji Apple is the only zero calorie energy drink to feature the popular apple flavor. The crisp and refreshing natural apple flavor gives Xyience the opportunity to pioneer a unique flavor in the market. Xyience is available nationwide with a suggested retail price of $1.99 - $2.29 per 16-ounce can.

Wholly Guacamole Snack Cups, a guacamole mini topped with a container of round, white corn tortilla chips, provides convenience for on-the-go customers and a The Wholly Guacamole healthier, fresher snack option compared to other Snack Cups, an ideal snacks. Give your customers the delihealthier snack option. cious taste from America’s #1 brand in refrigerated guacamole. Available in Classic or Spicy flavors. A convenient portable snack with easy-peel package, Wholly Guacamole Snack Cups are a perfect add-on to any meal or beverage purchase. The small 6-count case is ideal for grab-n-go display areas, and perfect for a variety of c-store environments.

THE FIRST BRANDED COFFEE SLURPEE In P6, get ready for the next great mashup from Coca-Cola: Georgia Coffee + Slurpee. This new product—the first branded Coffee Slurpee—combines the yummy flavor of coffee with the specialness of Slurpee. Can anybody say, ‘slurpolicious’? 82

Xyience Energy Announces Two New Flavors

Introducing Innevape InneStix

Innevape introduced an amazing new product at the 2018 NCASEF Convention and Trade Show specifically designed with the convenience store market in mind: InneStix. InneStix brings the best of two worlds together—the satisfaction of a salt nicotine ‘pod style’ device, with the shape smokers love. InneStix are NOT your traditional e-cig. Inside InneStix is proprietary salt nicotine technology that A unique blend of kiwi and delivers MAX Performance, MAX Flavor, peach is now available as your favorite and MAX Satisfaction. cigarillo. Swisher Sweets InneStix special introductory deals are InneStix are the Limited Edition Coastal available for any 7-Eleven FOA. NEXT salt nicotine deCocktail cigarillos pair the vice. Customers will love not having to charge a device or tropical tartness of kiwi keep up with pods. Pre-filled 50mg salt nicotine just like with sweet peach for the the pod devices—InneStix are simply grab, puff, and go. Inultimate taste of summer. nevape is known worldwide because of its amazing flavors. Available for a limited time Innestix are available in five Innevape favorites: in a resealable 2-count 1. Heisenberg (Blue raspberry—Top selling e-liquid in the U.S.) pouch with the “Sealed 2. Heisenberg Menthol (#1 selling e-liquid in China for Fresh” guarantee, Swisher two straight years) Swisher Sweets Coastal Cocktail Sweets Coastal Cocktail is is sure to be a customer favorite 3. TNT (Smooth tobacco) ready for shipment to from coast to coast.

Swisher Sweets Kiwi & Peach Coastal Cocktail

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4. TNT Menthol (Menthol tobacco) 5. Vape My Day (caramel/vanilla) Innevape also provides beautiful, fully FDA compliant, POP boxes to display InneStix, and get your customer’s attention. Special introductory deals are available for any 7-Eleven FOA. Contact Todd Turner, National Sales Manager, at todd@innevape.com, or at 352-428-6385.

Tai Pei Chicken Egg Rolls Make A Great Snack

Chicken Egg Rolls are a blend of sumptuous chicken and clean vegetables in a crispy wrapper, served with an authentic savory dipping sauce. Give your customers what they crave—a quick, affordable Asian snack with Tai Pei Chicken Egg Rolls.

DSTiger’s TA-DAA Pre-Boiled Edible Sweet Corn

TA-DAA Pre-Boiled Edible Sweet Corn is rapidly becoming the hottest new product in 7Eleven stores around the country. At an SRP of $1.99 and a 40 percent GP, not to menTai Pei Chicken Egg Rolls offer an Asian tion a 12-month shelf life, TA-DAA corn is Tai Pei Chicken Egg Rolls fast-casual snack for today’s on-the-go conthe perfect easy-to-open and affordable sumer. Conveniently located in your frozen are a quick, affordable snack (and/or meal) for your early morning Asian snack. food section and ready in minutes, Tai Pei and late afternoon working customers, active businessmen, gym enthusiasts, school kids, and families The Nature’s Bounty Co. has unveiled new products that will on a budget. CusTA-DAA appeal to your health conscious customers and help pump up Pre-Boiled Edible tomers can eat it your sales: Sweet Corn has a right out of the bag, 40 percent GP and a • Pure Protein Shakes are a great-tasting way to help fuel your or microwave for 60 12-month shelf life. customers’ active lifestyles. Protein is essential for optimal body seconds and add a function, strength, and lean muscle, and these delicious shakes are packed with 35 little butter or salt. Merchandise by the grams of protein plus an excellent source of calcium to help build strong bones. bananas, grab-n-go lunches, or on top • Pure Protein Breakfast Bars are made with rolled oats, quinoa, chia of the microwave. It requires no refrigerseeds and flaxseeds and are a delicious way to start your morning. These soft ation, is gluten free, non-GMO, and soy and chewy bars provide 12 grams of protein, 2-5 grams of sugar, an excellent free. And it tastes delicious! source of fiber, and a blend of 22 vitamins and minerals, making them Available soon through McLane the perfect choice for your morning fuel. and Coremark, TA-DAA Pre-Boiled Edible Sweet Corn will be enjoyed by your • MET-Rx RTD 51 is the powerhouse of protein shakes. Each customers of all ages. Sold in appealing nutritionally advanced, ready-to-drink protein shake is packed to 12-ear display boxes, (four to a Master the max with 51 grams of protein, featuring Metamyosyn that Case), many early SoCal and Chicago 7helps support muscle. Eleven franchisee test stores are already • MET-Rx Snack Cups are a fun and delicious protein fortified selling an average of 6-8 ears of TAsnack that can be enjoyed anytime or anywhere. Featuring a rich and DAA Corn daily. creamy chocolate hazelnut spread that Watch for your 7-Eleven ‘Preis made using real Book Special’ coming soon, or order hazelnuts, infused now from DSTiger (214-762-9660) and with premium whey take advantage of building your TA-DAA protein and paired Corn Customer base before the upcomwith crunchy breading Holidays. sticks perfect for dipcontinued on page 86 ping.

PURE PROTEIN & MET-RX ITEMS FOR HEALTHY SALES

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MuscleTech’s All-New Gronk Signature Protein Candy Bar MuscleTech has partnered with All-Pro Tight End Rob Gronkowski to develop the all-new Gronk Signature Protein Candy Bar, which not only delivers on the nutritionals customers expect from a protein bar, but also tastes like a candy bar. Featuring 20g of protein sourced primarily from whey protein and only 3g of sugar, this bar will boost energy and satisfy taste buds. Available in two delicious flavors, the MuscleTech Gronk Signature Protein Candy Bar is soft baked, gluten free, and features three distinct layers. • The Chocolate Caramel MuscleTech’s Gronk Peanut bar Signature Protein (McLane Candy Bars generate a profit of $1.35 per bar. and Core-

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Mark SLIN: 308329) has three delicious layers and includes decadent chocolate, real caramel and bits of peanut. • The Chocolate Deluxe (McLane and Core-Mark SLIN: 308330) is the ultimate chocolate bar: a chocolate center layer with a chocolate coating, enrobed in even more chocolate. Available in 12-pack display cartons, MuscleTech has suggested a retail price of $2.99 and generates a profit of $1.35 per bar. With the football season fast approaching, now is the time to stock your shelves. Order both flavors for your stores today.

Game Foilfresh Tropical Cigarillos Swedish Match North America’s Game cigarillos line is adding to its award-winning Limited Edition flavors to include

Limited Edition Game Tropical cigarillos will begin shipping on October 3.


Game Tropical. Taste the tropics by taking a moment to enjoy the many sweet and robust flavors packed into this slow burn cigarillo. The flavor and aroma will take you away to your favorite warm and sunny place. Game gives you the perfect blend of natural tobacco and the sweet essence of Topical flavors. On October 3, this new Limited Edition offering will begin shipping. Game Tropical is available in “2 for $.99,” “2 for $1.49” and “Save on 2” formats. Call (800) 367-3677 or email customer.service@smna.com for more information.

Kellogg’s ‘Feed Your Fandom’ Sweepstakes Get ready to score big with college football fans when you offer them a chance to win Season Ticket Cash to their must-see games as they munch on Cheez-It, Pringles and Rice Krispies Treats snacks. More than 49 million Americans attended college games last year, more

than twice as many as any other live sport. This fan group is not only enthusiastic about their school The “Feed Your Fandom” sweepstakes teams, they are avid will help increase your snacks sales. supporters of sponsoring products. Kellogg’s “Feed Your Fandom” sweepstakes draws them in with promotional packaging and product displays to maximize the contest impact and boost sales on the snacks they crave: Pringles, Cheez-It and Rice Krispies Treats. And, that’s a win-win for your store! Find out how easy it is for your customers to enter. For entry methods, dates and full Official Rules, go to www.KFR.com/FeedYourFandom. For more information, visit www.kelloggsspecialtychannels.com/Home/Convenience.


FOA Board Meeting Dates

7-Eleven FOAC

Central Florida FOA

Phone: 847-353-9999

Phone: 347-251-1828

September 27, 2018—Board & General Meeting October 25, 2018—Board Meeting November 29, 2018—Board Meeting December 13, 2018—Board Meeting

November 8, 2018

Columbia Pacific FOA Phone: 503-998-5941 September 20, 2018—Board Meeting October 25, 2018—Board Meeting

Midwest FOA Phone: 815-210-2950 CHICAGO DATES (Co-hosted with Alliance of 7-Eleven Franchisees FOA) September 27, 2018—General Meeting MICHIGAN DATES October 4, 2018—General Meeting

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

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A Great 7-Eleven Day In Washington By Linda Wasinger

Every year on 7-Eleven Day, also known as free small Slurpee day to our customers, we have high school students pre-pour all flavors of Slurpees in advance in all of our stores, and this year was no dierent. In one of our stores in Oak Harbor, Washington we were aided by Apple Servatius, Addison Nations (both wearing Slurpee t-shirts) and our granddaughter Rylee Wasinger (in the green t-shirt). We gave away over

1,600 Slurpees in 8 hours in this store. At our other store in Oak Harbor, we were helped by Blake and Ben Servatius and we gave away over 1,400 Slurpees in the same time frame. For their time and effort, our helpers receive free Slurpees for a year. It was a great day for our customers, for our stores, and for our helpers.


foa events San Francisco/ Monterey Bay FOA Golf Tournament

Greater Bay FOA Holiday Party Hiddenbrooke Golf Club Vallejo, California December 7, 2018 Phone: 707-280-1776

Midwest FOA Michigan Holiday Party

Castlewood Country Club Pleasanton, California September 10, 2018 Phone: 510-693-1492

San Diego FOA Vendor Appreciation Day AleSmith Brewing Company San Diego, California October 4, 2018 Phone: 619-713-2411

Somerset Inn Troy, Michigan December 12, 2018 Phone: 815-210-2950

San Diego FOA Holiday Party San Diego Marriott Del Mar San Diego, California (Carmel Valley) December 15, 2018 Phone: 619-713-2411

7-Eleven FOAC Holiday Trade Show

Columbia Pacific FOA Holiday Party

Holiday Inn Skokie, Illinois November 15, 2018 Phone: 847-353-9999

Hilton Hotel Vancouver, Washington December 15, 2018 Phone: 360-513-0289

Midwest FOA/ Alliance of 7-Eleven Franchisees FOA

FOA Of Southern Nevada Trade Show

Holiday Party (venue to be announced) December 5, 2018 Phone: 815-210-2950

National Coalition Affiliate Meeting Pacific Palms Resort City of Industry, California November 5-6, 2018

National Coalition Board of Directors Meeting Pacific Palms Resort City of Industry, California November 7-8, 2018

National Coalition Affiliate Meeting Sheraton Four Points DFW Coppell, TX February 18-19, 2019

National Coalition Board of Directors Meeting Sheraton Four Points DFW Coppell, TX February 20-21, 2019

Alexis Park Resort Las Vegas, Nevada April 17, 2019 Phone: 702-646-8383

San Francisco/ Monterey Bay FOA Holiday Party

FOA Of Southern Nevada Golf Tournament Rhodes Ranch Golf Club Las Vegas, Nevada April 18, 2019 Phone: 702-646-8383

Biltmore Hotel Santa Clara, California December 7, 2018 Phone: 510-693-1492

Advertiser’s Index

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

Anheuser Busch ...............10 Aon Risk Services .............24 Blue Bunny/Wells ............17 Bug Juice..........................45 Buy4Store.........................83 Chobani............................50 Coca-Cola..................cover 2 Cookies United .................34 Dean Foods ......................27 90

Diageo Guinness ................9 Dr Pepper Snapple ...........15 Good2Grow......................89 Hormel .............................43 Iovate/Muscle Tech...........79 Johnson&Johnson......38-39 Kellogg's .................3,4,5,53 Kraft .................................61 Kretek..................71, cover 4

AVA N T I J U LY | A U G U S T 2 0 1 8

Lifeway Foods ..................86 Logic Ecig....................46-47 Mars Ice Cream.................19 Maruchan.........................21 McLane.............................37 Miller .........................cover3 Mondelez .........................23 Morinaga..........................33 Nestle Professional...........40

Organic Valley ..................73 P&G Acosta....................6,65 Pepsi Quaker ...............76,77 Perfetti Van Mele .............25 PWM ................................87 Reynolds American..........67 Seneca........................28-29 Shamrock.........................32 Simply Orange............12-13

Smoky Mountain .............74 Swedish Match..............8,85 Swisher International ...7,69 Think Thin.........................63 Treo...................................80 Vixxo.................................52 Whitewave Foods ............30 Windsor............................57 Yowie................................48


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