T H E
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Fewer Restrictions Could Help Franchisees Grow Their Businesses SEI Gas Pricing: A Masterpiece Of CRP Playing Musical Chairs In A Tight Labor Market You Are Not Alone! Chapter 3 Fire Prevention & Emergency Preparedness –Are You Ready? COVID-19 Vaccine Dos And Don’ts For Our Franchisees
NCASEF Returns To In-Person Board Meetings See Calendar Page 58 Join Us For The NCASEF Convention And Trade Show Kissimmee, Florida August 1-4, 2021
Talk With Other Franchisees On The Free Telegram App Page 12
PRSRT STD U.S. POSTAGE PAID York, PA PERMIT No. 232
THE VOIC E OF 7-ELEVEN FRANC H ISEES
Contents 23 SEI Gas Pricing: A Masterpiece Of CRP By Jay Singh, NCASEF Chairman
27 Playing Musical Chairs In A Tight Labor Market By Michael Jorgensen, NCASEF Executive Vice Chairman
31 You Are Not Alone! Chapter 3
NCASEF Returns To In-Person Meetings! May, Hauppauge, NY July, Kissimmee, Florida November, Koloa, Kauai, Hawaii
See Calendar Page 58 Join Us For The NCASEF Convention & Trade Show Grand Palms Resort & Convention Center Kissimmee, Florida
August 1-4, 2021
By Eric H. Karp, Esq., NCASEF General Counsel
Talk With Other Franchisees On Free Telegram App Page 12 EN TM PA R DE
By John Harp, CSP, ARM—Risk Engineering Consultant, Mitsui Sumitomo Insurance Group
35 Fire Prevention & Emergency Preparedness—Are You Ready?
Bits & Pieces...14
Special Features 38 COVID-19 Vaccine Dos & Don’ts For Our Franchisees By Elizabeth Rice and Rob Bernstein, Lanier Munchin LTD
Legislative Update....................................20 Join Your Local FOA...................................45 SEI News.......................................................52 Vendor Focus .............................................55 Franchisee Calendar.....................58
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 email@example.com. AVANTI Offices are located at 116 Bellevue Ave., Suite 304, Langhorne, Pennsylvania 19047. For advertising information, call Sheldon Smith at 215 7500178 or fax to 215 750-0399; on-line, send messages to firstname.lastname@example.org. The views and opinions expressed in the articles and columns published in Avanti Magazine are those of the authors and do not necessarily reflect the official policy or position of the National Coalition of Associations of 7-Eleven Franchisees, its officers or its Board of Directors.
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NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES NATIONAL OFFICERS & STAFF
7-Eleven Private Brand Reaches Milestone SEI reached a milestone in late December when it hit $1 billion in private brand annual sales, reported CSNews Online. e company began its 7-Select private brand line in 2008 with just 87 items. irteen years later, the retailer now oﬀers roughly 1,500 in-store items under two private brand lines—7-Select and 24/7 Life by 7-Eleven. According to the article, 24/7 Life— which encompasses electronic accessories, over-the-counter medications, health and beauty aids, cleaning supplies, paper goods, oﬃce supplies, wine accessories and travel-size toiletries—helped contribute to a 10 percent year-over-year gain in 7-Eleven's private brand sales in 2020. Part of that was also a result of shopping patterns changed by the COVID-19 pandemic. e article also states that hitting the $1billion mark in sales of its private brands will continue to shape SEI’s “long-
“SEI reached a milestone in late December when it hit $1 billion in private brand annual sales.”
term merchandising strategy to drive customer loyalty and retention, as well as improve margins for its franchisees.”
Jatinder Singh NATIONAL CHAIRMAN
702-249-3301 • email@example.com
Franchisees Request Ninth Circuit’s Ruling On February 10, California 7-Eleven franchisees asked U.S. District Court Judge Dale Fischer to allow the Ninth Circuit Court of Appeals to rule on the district court’s previous denial of the franchisees’ application for class certification, reported e National Law Review. e franchisees filed a class action against 7-Eleven, claiming they are actually employees of the franchisor and not independent contractors. e rationale for the franchisees’ motion is a previous ruling from Judge Fischer that the court should evaluate the franchisees’ claims of California labor code violations under the elevenfactor test set forth in the 1989 holding in S.G. Borello & Sons Inc. v. Department of Industrial Relations, while claims for violation of California’s wage orders would be subject to decision under the so-called ABC Test. e California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles County established the ABC test. e 7-Eleven franchisees argue that the ABC test, which makes it harder for companies to classify workers as independent contractors, should apply to their case. e continued on page 12
EXECUTIVE VICE CHAIRMAN
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Paul Lobana VICE CHAIRMAN
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Rehan Hashmi VICE CHAIRMAN
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Ajinder Handa VICE CHAIRMAN
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Eric H. Karp, Esq. GENERAL COUNSEL
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Sheldon Smith PUBLISHE R & ADVERTISING SALES 215 750-0178 SHELDON.SMITH5@VERIZON.NET
The National Coalition Office The strength of an independent trade association lies in its ability to promote, protect and advance the best interests of its members, something no single member or advisory group can achieve. The independent trade association can create a better understanding between its members and those with whom it deals. National Coalition offices are located in Universal City, Texas. 10
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John Santiago ASSISTANT EDITOR 215 750-0178 AVANTIMAG@VERIZON.NET
1001 Pat Booker Road Suite 206 Universal City, TX 78148 Office 210-971-9211 E-mail: email@example.com
The Voice of 7-Eleven Franchisees March/April 2021 © 2021 National Coalition of Associations of 7-Eleven Franchisees Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.
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franchisees point to a once stayed, now pending, case before the Ninth Circuit involving a GrubHub driver Raef Lawson, in which the court will decide whether Dynamex should apply retroactively to Lawson’s claims of misclassification. In January 2021, the California Supreme Court held that its Dynamex ruling indeed applied retroactively, and in response the Ninth Circuit lied a stay in Lawson’s case presumably to proceed in light of the California court’s action. e 7-Eleven franchisees now seek to seize whatever advantage might come from the Ninth Circuit’s action, as it relates to Lawson’s claims against GrubHub.
Speedway Sale Postponed To Q2 Marathon Petroleum Corporation’s sale of its Speedway business—comprised of approximately 3,900 c-stores in 35 states—to Seven & i Holdings has been postponed until the second quarter, contingent upon pending approvals, reported MSN Money. e deal was earlier scheduled to close in the first quarter of this year. e $21 billion transaction is set to be among the biggest in the history of the c-store industry, according to CSP Daily News. e deal includes a 15-year fuel supply agreement.
Global Convenience Store Market Expected To Grow e global convenience, mom and pop stores market is expected to grow from $908.19 billion in 2020 to $963.5 billion in 2021 at a compound annual growth rate (CAGR) of 6.1 percent, according to a new report by ResearchAndMarkets. e growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. e market is expected to reach $1339.8 billion in 2025 at a CAGR of 9 percent. e report, “Convenience, Mom and Pop Stores Global Market Report 2021: COVID-19 Impact and Recovery to 2030,” the outbreak of COVID-19 has acted as a massive restraint on the convenience, mom and pop stores market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally. However, it is expected that the convenience, mom and pop stores market will recover from the shock across the forecast period as it is a 'black swan' event and not related to ongoing or fundamental weaknesses in the market or the global economy.
Teamsters Urge FTC To Pause Review Of Speedway Sale “Marathon Petroleum Corporation’s sale of its Speedway business to Seven & i Holdings has been postponed until the second quarter.” 12
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Teamsters General President Jim Hoﬀa recently called on the Federal Trade Commission (FTC) to pause its antitrust review of the sale of Marathon Petroleum
Corporation’s Speedway retail service station and convenience store business to Seven & i Holdings until the agency has time to “interpret, integrate and employ the antitrust legislation currently making continued on page 14
Talk With Other Franchisees On Free Telegram App National Coalition members are using a new app to discuss issues, make announcements, post information and send files. It's called Telegram and will accommodate many more than the 250 group member limit of WhatsApp. We already have more than 400 members on Telegram, and we encourage you to download the free app onto your phone or desktop and sign on using the following link: https://t.me/joinchat/QR1k9Efl4QmXqtIFtpaCkQ. There are just a few basic rules: 1. Must be a franchisee and paying member of an FOA affiliated with the National Coalition. 2. Not a member of an FOA? Join one ASAP or become a National Coalition Member at Large. 3. Display your full name and area on your profile so issues can be related to that area. 4. If your full name is not displayed, you will be removed. 5. Posts should be strictly business related. 6. Pro SEI? No problem—we all are, that is why we are franchisees. FOA/National Coalition haters, please stay away. 7. Encourage your fellow franchisees to join. 8. STAY UNITED. LOVE YOU ALL.
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its way through Congress, or at a very minimum, ensure that all competitive effects from the transaction have been fully considered and remedied.” e letter states the antitrust legislation seeks to “strengthen antitrust enforcement and to reverse the willingness of some courts to impede eﬀective enforcement. e bill returns coordinated eﬀects to the center of merger analysis; does away with unrealistic requirements that the agencies prove competitive eﬀects to a near certainty; and, emphasizes the importance of examining and preventing exclusionary conduct.” Hoﬀa writes that the proposed sale of Speedway to 7-Eleven has no eﬃciencies and is an example of vertical disintegration that could result in a double mark up and higher gasoline prices to consumers. He further claims that Marathon plans to use the $21 billion in Speedway proceeds exclusively to pay down debt and reward shareholders, and that “the proposed transaction will further concentrate the market and create a convenience store industry behemoth with markedly increased power to drive more small businesses into closing their doors forever.”
DoorDash Opens C-Store Concepts In D.C. Area Food delivery giant DoorDash Inc. is building out two warehouse spaces, one in D.C. and the other in Alexandria, Virginia to serve as Greater Washington's first “DashMart” convenience stores, reported the Washington Business Journal. rough DashMart, DoorDash curates convenience, grocery and restaurant items, all of which can be delivered to its customers’ doors within roughly 30 minutes. e “new type of convenience store,” as DoorDash calls it, 14
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“DoorDash is building out two warehouse spaces to serve as Greater Washington's first DashMart convenience stores.” was launched last August and has since expanded to at least 18 locations. e average DashMart carries 3,500 items, everything from household essentials, medicine and pet food to snacks, readymade restaurant meals and packaged spices from local retailers. It also sells at-home COVIS-19 tests, through a partnership with Vault Health Inc. and Everlywell Inc.
7-Eleven Tops CSNews’ Growth Chains List 7-Eleven has ranked #1 on this year’s Convenience Store News Top 20 Growth Chains list, having added 302 stores in 2020. Kwik Trip came in second, with 65 new stores, and GPM Investments LLC third with 63 new locations. According to the publication, 7-Eleven kicked oﬀ 2020 with an agreement to acquire more than 100 independently operated 7-Eleven stores in central Oklahoma from 7-Eleven of Oklahoma. According to Convenience Store News, comparing c-store retailer store counts from January 2020 to January 2021, this year’s Top 20 Growth Chains added a combined 898 stores for an average growth rate of 13 percent, versus last year when 2,214 stores were added for a 23.1 percent growth rate.
7Rewards Named One Of The Best Loyalty Programs SEI’s 7Rewards was among ten convenience store loyalty programs named to Newsweek magazine's America's Best continued on page 16
National CineMedia has closed a deal with ATM.TV to air content on high-definition screens atop cash machines at 8,500 7Eleven stores nationwide as the movie theater advertising network continues to expand in digital out-of-home locations, reported Deadline. • Eight percent of American retailers were cashless at the start of the pandemic, but that figure surged to 31 percent by April 2020, reported PYMNTS.com. Recent data shows that consumers around the world prefer contactless payments, with 82 percent now viewing contactless as a more sanitary way to pay. • Amazon plans to open at least 28 more Fresh grocery stores in the U.S., hoping to add to its growing share of the $900 billion grocery market, reported Bloomberg. • Growth Energy announced that drivers across the U.S. have reached a new milestone, logging 20 billion miles on the road using E15—a 15 percent ethanol blended fuel and known to consumers at the pump as Unleaded 88. • Three Billings, Montana businessmen recently launched a one-ofa-kind mobile convenience store called the Munchie Bus, reported KULR8.com. The bus carries all kinds of items—from candy, to lip balm, to hot coﬀee—and the founders said they are launching a mobile app soon so people can request the bus to come to any location. • 7-Eleven in Sweden is selling a line of branded limited edition pajamas to promote its new oﬀering of all-day breakfast, reported Ad Week. Priced at 299 Swedish krona, or about $35, the 7-Eleven pajamas are 100 percent continued on page 24
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Loyalty Programs 2021 list, which was compiled in partner with global data research firm Statista, reported CSNews Online. The full list of winners includes 241 loyalty programs in 43 different categories. The list is based on the results of an independent survey of more than 4,000 customers who are members of loyalty programs of retailers or service providers in the United States. The final assessment and rankings
“7Rewards was among ten convenience store loyalty programs named to Newsweek magazine's America's Best Loyalty Programs 2021 list.”
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were based on six evaluation criteria: ease and enjoyment, benefit, overall satisfaction, customer support, trust and recommendation.
7-Eleven Recognized As 2021 Military Friendly Company 7-Eleven is one of 69 companies that have been recognized as 2021 Military Friendly Companies, reported CSNews Online. Military Friendly is the standard that measures an organization's commitment, eﬀort and success in creating sustainable and meaningful opportunity for the military community, the article states.
The Military Friendly Company award is designed for organizations that have met or exceeded its standard in at least three out of four critical areas of commitment to the military community: recruiting, hiring and training of veterans; recruiting, hiring and training of military spouses; partnering with and supporting veteran-owned businesses; and commitment to military consumer protections and having a positive brand reputation in the military community. 7-Eleven received the following recognitions: Bronze, 2021 Military Friendly Employer; 2021 Military Friendly Spouse Employer; 2021 Military Friendly Company; 2021 Military Friendly Brand. continued next page
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New EV Fast Chargers Available At California 7-Eleven SEI has teamed with Pacific Gas and Electric Company (PG&E) to install the first public, electric vehicle (EV) fast chargers at a 7-Eleven store in West Sacramento, the companies announced.
Drivers can charge their vehicles at the four new advanced 125kW-capable EV fast chargers. is 7-Eleven store supports the fueling needs of EVs and conventional cars, both options owned and operated by 7-Eleven. PG&E is also working with 7-Eleven to install fast chargers at additional locations through its EV Fast Charge program, which complements state and privately funded fast charge deployments to help improve long-distance travel for EV drivers. Public fast charging is critical to increasing EV adoption as it builds driver confidence in their ability to charge away from home and provides access to drivers who do not have residential charging, the companies said. Fast chargers can potentially add hundreds of miles of
range in as little as 30 minutes, compared to Level 2 chargers that fuel a car in several hours.
Summer Drive Expected To Return To Near Normal Convenience retailers anticipate that leisure travel and routine customer trips will return to pre-pandemic levels this summer, according to the results of a new NACS survey of U.S. convenience store owners. Convenience stores, which sell 80 percent of the fuel purchased in the country, experienced a 13 percent decrease in fuel sales and less customer traﬃc throughout the pandemic. However, most c-store operators (52 percent) say that summer travel and commuting patterns continued on page 18
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Your National Coalition is Committed to Franchisee Interests
Franchisees Respond To U.S. Senator’s Report Outlining ‘Deceptive And Misleading’ Practices In Franchise Industry In the wake of a scathing report on the franchising industry by U.S. Senator Catherine Cortez Masto (D-Nev.), the National Coalition of Associations of 7Eleven Franchisees (NCASEF) is renewing its calls for the Federal Trade Commission to revise its Franchise Rule and, in the words of the report, “provide more investor protection by recognizing that voluntary financial performance disclosure has failed to pro“NCASEF vide accurate information to investors.”
is renewing its calls for the federal trade commission to revise its Franchise Rule and, in the words of the report, ‘provide more investor protection by recognizing that voluntary financial performance disclosure has failed to provide accurate information to investors.’”
The report, “Strategies to Improve the Franchise Model: Preventing Unfair and Deceptive Franchise Practices,” details problems reported by franchisees in 10 brands, including 7-Eleven, and quotes unnamed franchisees describing the “pervasive control” 7-Eleven has over its owners both financially and operationally.
As an example, it notes that 7Eleven’s current Franchise Agreement requires owners to pay a marginal rate as high as 59 percent on all gross profits, despite declining store-level gross profits. Franchisees are compelled to pay 100 percent of liability insurance for property and equipment, even though the corporation owns the property and equipment. Gasoline, which is sold in 48 percent of U.S. stores, represents 66 percent of 7-Eleven’s total revenue. 7Eleven sets the price of gas at its franchised stores. Franchisees must maintain the area around the pumps, but only receive a commission of 1.5 cents per gallon sold. And 7-Eleven’s retail gross profit at the pump jumped from 22.8 cents in 2018, to 24.1 cents in 2019 to 34.85 cents in 2020.
“This report accurately spotlights the inherently unfair nature of the 7-Eleven Franchise Agreement, even pointing out that 7-Eleven mandates we keep our stores open on Christmas Day,” said Executive Vice Chairman Michael Jorgensen of the NCASEF. “We thank Sen. Cortez Masto for shining a light on the problems facing the franchising industry and support her legislation to ensure fair treatment and real oversight.” NCASEF agrees with the report’s conclusion that franchising can be a path for entrepreneurs and immigrants to realize the American Dream, but as General Counsel Eric H. Karp noted, “Without sufficient guardrails in place, small business owners who have invested in franchised businesses can wind up losing everything while companies like 7-Eleven earn great profits.”
will be close to pre-pandemic levels. But this is not shared optimism: 28 percent don’t expect to see traditional travel patterns emerge until 2022. According to the report, retailers anticipate growth in categories like dispensed cold beverages and coﬀee (43 percent foresee growth), as well as immediate consumption prepared foods (62 percent foresee growth). ese self-serve categories experienced, and continue to experience in some areas, various state and local restrictions. When asked which retail innovations they saw in 2020 that they will apply to their stores, most convenience retailers said contactless payments and last-mile oﬀers like home delivery and curbside pickup will grow. Tying together new offers that emerged during the pandemic, 20 percent will expand services like drivethrus, delivery and curbside pickup.
7-Eleven Ontario Stores Plan To Serve Alcohol 7-Eleven Canada has applied under “public notice” with Ontario’s Alcohol and Gaming Commission to sell beer and wine for in-store consumption in dozens of its convenience stores across the province, reported the Windsor Star. A spokesman for the provincial agency confirmed that liquor sales license applications have been filed by the company for 61 locations across Ontario. A spokesperson for 7-Eleven Canada explained to SaltWire.com that stores will serve a “small selection of Ontario-made beer and wine products, oﬀered during limited hours, and in designated consumption areas of our stores.” e spokesperson did not elaborate on what an indoor seating plan would look like. Each proposed 7Eleven location has already entered a public notice period regarding the liquor applications, and placards have been continued on page 41
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Legislative Update California Expands Paid Sick Leave California Governor Gavin Newsom recently signed a bill that expands paid sick leave for about 10.4 million workers, mandating up to two weeks of paid time oﬀ for circumstances including COVID-19 symptoms, and scheduling a vaccine or childcare and schooling, reported the Associated Press. e new measure applies to companies with at least 25 employees. e rules expire September 30 and are retroactive to January 1. Some companies would have to pay their workers for time oﬀ they have already taken. Many companies “CALIFORNIA’S NEW can get that money back PAID SICK LEAVE from the federal government, RULE MANDATES which oﬀers companies a payroll UP TO TWO WEEKS tax credit of up to $511 a day for each OF PAID TIME OFF employee who takes the paid sick leave. FOR CIRCUMSTANCES California companies with fewer than INCLUDING COVID-19 25 employees can oﬀer the paid leave SYMPTOMS AND and claim the federal tax credit, but SCHEDULING A they would not be required to do so VACCINE.” under the new rule.
New York & Pennsylvania Consider New Labor Laws Lawmakers in New York and Pennsylvania are considering, or have recently enacted, new labor laws that aﬀect convenience store owners in those states, reported CSNews Online. Here’s the breakdown:
NEW YORK • Employer Liability—As the c-store industry lobbies Congress to pass COVID-19 liability protections for responsible retailers, the New York Association of Convenience Stores (NYACS) is opposing a state bill that it said would do the opposite in New York by creating a private right of action for employees claiming to have contracted airborne infectious illnesses in the workplace. It would also allow employees in companies with a workforce of 10 or more to establish “joint labor-management workplace safety committees” with outsized influence over workplace policies, NYACS said.
• Paid Time Off For Vaccinations—New York has enacted a law requiring state employers of all sizes to provide paid leave to employees to get vaccinated against COVID-19. ey may take up to four hours of paid leave each time they get a vaccine shot. Paid at the employee's regular rate of pay, this leave is in addition to any other leaves the employee is entitled to, such as the state's paid sick leave program. It is not retroactive.
PENNSLYVANIA • Philadelphia—In March, the Philadelphia City Council unanimously adopted an amended version of the 2021 Public Health Emergency Leave Bill, Ordinance No. 210122, that would reinstate the immediate availability of two weeks' worth of paid sick leave for Philadelphia workers. e bill now awaits Mayor Jim Kenney's signature. Under the new law, all businesses in Philadelphia with 50 or more employees must oﬀer 80 hours of pandemic-specific paid leave to staﬀ, or 160 hours of paid leave total. Amendments to the bill broadened the type and amount of substitute leave that could be counted against the 80-hour pandemic-specific leave requirement and eliminated a retroactivity window dating to the beginning of the year.
WA County Council Approves Pandemic Pay Increase Grocery store workers in unincorporated King County, Washington are getting a pay increase aer the King County Council approved hazard pay benefits, reported KOMO News. e approved legislation, which began March 22, adds a $4-per-hour hazard pay for employees at “Lawmakers in King County, large grocery stores in uninWashington recently approved corporated King County. a $4-per-hour hazard pay e final version of the legincrease for employees at islation exempts independlarge grocery stores.” ently owned stores in areas historically underserved to the pay increase. Grocery store workers will continue earning the pay increase until the County Executive ends the COVID-19 emergency declaration. e cities of Seattle and Burien recently approved and implemented similar measures to increase pay for grocery store workers. continued next page
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Legislative Update Soda Tax Bill Lands In D.C. Washington D.C. council members recently introduced legislation that would place a $.015 cent-per-ounce excise tax on sugary drinks like sodas and energy and sports beverages, reported WTOP News. If the bill is passed, the price for a 12-pack of Coke, for instance, would go up over $2. e measure is called the Nutrition Equity Bill and supporters claim that it will discourage residents from buying sugary drinks and make healthier options, especially in low-income neighborhoods in Northeast and Southeast D.C., where obesity and diabetes are diagnosed at high rates. Opponents of “WASHINGTON D.C. COUNCIL the bill say the tax MEMBERS WANT TO PLACE A would hurt local gro$.015 CENT-PER-OUNCE EXCISE
TAX ON SUGARY DRINKS.”
cery and convenience stores by encouraging shoppers to leave D.C. and shop in Maryland or Virginia. Opponents also claim that an excise tax on sodas is regressive and would aﬀect poorer residents disproportionately.
Judge Dismisses Suit Against Seattle’s Hazard Pay Law A federal judge recently dismissed a grocery industry lawsuit that sought to block Seattle’s new law granting $4-an-hour raises to grocery store workers for the duration of the coronavirus pandemic, reported the Seattle Times. e law applies to large grocers—those with more than 500 employees worldwide and stores larger than 10,000 square feet—in Seattle. It mandates a $4-an-hour pay boost for all workers in retail locations, and that pay boost must remain in eﬀect for as long as Seattle continued on page 42
SEI Gas Pricing: A Masterpiece Of CRP BY JAY SINGH, CHAIRMAN, NCASEF, PRESIDENT, SAN ANTONIO FOA
As 7-Eleven franchisees we are all familiar with merchandise pricing and the heavy impact it can have on our gross profit dollars, our gross profit split, and the profitability of our stores. It is very clear in the franchisee agreement that 7Eleven, Inc. sets a suggested retail price (SRP) for every item in the store, and franchisees have the option to create a custom retail price (CRP) to make more money depending on their customers and traffic. Lately, we have been hearing from franchisees around the country that 7-Eleven is putting their efforts into directing franchisees to review or delete CRPs, and to revert to set SRPs for all items in the store. We know that when SEI brings in a new product or line extension they work very hard to size up the competition—if they have the product, how much they are charging for it, and if there are any special deals or promos. They have a pricing survey team that works out SRPs and decides their best price point for franchisees. SEI also works with vendors to put together best-cost deals that need high-volume throughput, and franchisees may also visit nearby competition or get feedback from customers to decide if they need to increase five or ten cents to find the best profitability for their store. Prices vary from Zone to Zone and a single item may be 20 cents higher say, in Los Angeles than in Dallas.
Franchisees may have a very small number of CRPs or they may have dozens or two or three hundred. It may be a good idea to check your CRP pricing, but to delete all CRPs usually is not good for the profitability of the store. Many franchisees feel that SEI has the tools to pressure them to delete CRPs, and our vendors offer very competitive pricing to increase volume and throughput, but we often feel we are giving the second or third item away for free, because we still have to order, receive, stock and sell that second item, and we do not make the same profit, or we make no profit at all. If we set up custom retail pric-
ing, often we can sell that second and/or third item for a higher gross profit dollar than the money we would receive selling it on promo. This is why all decisions about CRPs should be based on facts, profitability and take home dollars for both parties, because we share. CRPs seem to be a win-win proposition for every“We have been hearing from one, without hurting sales. If franchisees around the country that second or third item brings down the gross profit that 7-Eleven is directing percent or gross profit dollars, franchisees to review or delete it is not a good decision and franchisees are not bound to CRPs, and to revert to set SRPs.” follow all the promotions.
Gas Stores: Daily CRPs When it comes to merchandising or inside sales, franchisees are generally pretty confident about the data the 7Eleven pricing team employs to make SRP pricing decisions. But when it comes to gasoline, where we get a flat 1.5 cents per gallon commission, they employ an entirely different strategy—daily CRPs—and franchisees have no power to influence the decisions or change gas prices. Every store has a profile, and a spot on the PriceNet web where their store is compared to other stores in their area within a 1.5 mile radius. The pricing of the competition is always available in our system, and updates come in every time the store next door changes its price. Our 7continued on page 24
JAY SINGH CAN BE REACHED AT 702-249-3301 OR JAYS@NCASEF.COM
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Masterpiece Of CRPs continued from page 23 Eleven gas strategists rarely go the extra mile and match pricing with the competition. Most of the time, they pick the price that is highest among the store’s mile and a half radius, and they may price it in the middle, even though the store next door to yours may be at a much lower price. How they set their pricing is known only to 7Eleven, Inc. and their gas strategists. The worst scenario is the dreaded holding period, which is when SEI decides to raise your gas price 15-20 cents per gallon from the current price. This can last from 24 hours to 5-6 days, and you can’t get an answer as to why it happened. Emails go unanswered, market managers
for merchandise. So franchisees suffer two ways, because commission is based on gallons, not price, and when gas prices are high, we lose the inside sales too. It is embarrassing for the fran“It is embarrassing for the franchisee chisee when all of a sudden when all of a sudden prices are prices are jacked 15-20 cents per jacked 15-20 cents per gallon for a gallon for a period of time and then settle back to the same exact period of time and then settle back to the same exact level they started level they started from. Our customers openly ask us, isn’t that from. Our customers openly ask us, price gouging? Even though the ‘Isn’t that price gouging?’” franchisee does not have anything to do with it, this non-comand FCs don’t answer questions, and they petitive higher pricing hurts inside sales are very blunt in saying they can’t talk and we get a price-gouging image among about gas or influence pricing. Even if a our customers. Now, with to the acquisition of franchisee requests to be competitive with Sunoco and Speedway and their higherthe store next door, they will not do it. How can a company the size of 7- volume gas stores, 7-Eleven is hunting for Eleven not get the best gas prices? There is a an even larger chunk of the gas store inwell-established link between gas stores and dustry. Before breaching franchisees, 7higher merchandise sales because the mar- Eleven should look into gas, its own ket basket is bigger. If gas prices are higher masterpiece of CRP, before we set in stone than the competition, customers do not the image that we always have the highest come for gas and they do not enter the store pricing in the industry.
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cotton and reportedly very cozy. • Indianabased convenience chain Family Express is rolling out a system that allows customers to order food from its Cravin’s restaurants right at the fuel pump, reported the Northwest Indiana Times. • Swisher recently announced that its Board of Directors has elected John J. Miller to serve as Swisher’s President and Chief Executive Officer. Miller has served in senior leadership roles during his tenure at Swisher, including most recently as President since 2017. Prior to that, he was Senior Vice President of Sales and Marketing. • Mars Wrigley Confectionery has teamed with retailer Wakefern Food Corp. and robotics provider Savioke, Inc. to test a robot that displays and delivers items normally found at checkout to customers throughout the store, reported Candy & Snack Today. • Louisville, Kentucky-based convenience chain Thorntons recently opened its first non-profit community store in partnership with the Louisville Urban League. The company said this firstof-a-kind store will operate as a sustainable not-for-profit venture featuring products from local minority owned businesses. • The Justice Department is investigating whether Visa Inc. is engaging in anticompetitive practices in the debit-card market, reported the Wall Street Journal. The department’s antitrust division has been gathering information on whether Visa has limited merchants’ ability to route debit-card transactions over card networks that are often less expensive. • Burger chain Whataburger recently announced that it awarded more than $90 million in bonuses to its employees in thanks for their service during the COVID19 era and in the severe winter weather storm. Whataburger employees also received “Extra Mile” bonuses, emergency pay and a doubling of their 401(k) plan matching for 2020. • Yum! Brands has acquired Tictuk Technologies, which will allow customers to order from Yum! Brands’ KFC, Pizza Hut, Taco Bell and continued on page 32
Gasoline Revenue and Fuel Gross Margin numbers from the last 10 years show 7-Eleven’s heavy investment in gasoline stores. 24
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Playing Musical Chairs In A Tight Labor Market BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF
As SEI rolls out new programs and promotions to help attract new customers, franchisees are having a difficult time finding employees to meet the increased labor requirements of running our stores. But this isn’t a new problem. It actually started in 2018, when there were more jobs available than people to fill them. The tight labor market was partly exacerbated by the Trump administration’s immigration policies, which drained the well of workers that would normally take unskilled, entry-level positions. Last year, we were hit with the pandemic and unemployment soared as small businesses and local restaurants shuttered for nearly two months under mandated shutdown orders to help curb the spread of COVID-19, and many never reopened. To help the jobless, the government started handing out weekly supplemental unemployment payments—first $600, and now $300. With these extra payments many of the unemployed, particularly those at the lower end of the pay scale, were—and in many instances still are—earning more than they did when they were working. The side effect of this situation is that the majority of the unemployed are not eager to go back to work, which is making the labor market even tighter. This is especially hurting small business owners like 7-Eleven franchisees because now we can’t find people to fill shifts in our stores. Although the labor pool is expected to grow once the unemployment stimulus is cut off, it appears we will end up playing a game of musical chairs with the bigger retailers because of our structure and what we can afford to pay new employees. Companies like Target and Walmart are paying premium wages to attract workers, but nothing has changed in
MICHAEL JORGENSEN CAN BE REACHED AT
JORGENSEN.NCASEF@GMAIL.COM OR 347-251-1828
our franchise agreement that would allow us to really compete for these employees, and SEI’s expectations for how we should operate our stores hasn’t changed. This dilemma isn’t unique to 7-Eleven, however. Small business owners all over the country are having trouble filling open positions. To give a couple of examples from recent news articles, a McDonald’s franchisee in Florida is having so much diffi-
culty finding workers that he’s offering $50 to anyone who comes in for a job interview. And he’s still not attracting many applicants! A restaurant owner in Toledo, Ohio needs a new cook and is offering a $1,000 retention bonus for the position if the person stays for six months. So far, no takers. The restaurant owner said some companies in his area are offering incentives and signon bonuses to attract employees and it’s difficult to compete with them.
I was recently on a conference call organized by the Coalition of Franchisee Associations, and Dunkin’ franchisees said they were closing their less profitable outlets and consolidating their people in more profitable locations as a way to deal with the labor shortage. The more profitable restaurants also happen to be the ones with drive-thrus. They’ve also turned off the preorder feature on the Dunkin’ app because they’re just able to keep up with the walkup and drive-thru business that they have. Same with the Burger King franchisees. They say they’re closing their dining rooms with the exception of lunch because they don’t have enough employees to keep their dining rooms clean. I’m sure you all have noticed that some of our vendors—like Coke, Pepsi, CDC—have been consolidating their delivery routes because they don’t have enough drivers to cover all the routes or even warehouse workers to fulfill the orders. So the combination of very generous unemployment benefits and larger companies offering very attractive pay and sign on bonuses is making it nearly impossible for small business owners like us to find workers. As per our contract, we’re mandated to be open 24/7. Although, early on in the pandemic SEI relaxed that rule and allowed stores to close for a few hours every night. Very recently, however, the company informed all franchisees via an email from Doug Rosencrans, SVP Franchise Operacontinued on page 28
“The combination of very generous unemployment benefits and larger companies offering very attractive pay and sign on bonuses is making it nearly impossible for small business owners like us to find workers.” AVANTI M A R C H | A P R I L 2 0 2 1
Tight Labor Market continued from page 27 tions, “asking all stores to return to 24 hours a day, 7 days per week business operation. For those stores legally restricted from operating 24 hours, 7-Eleven will, by policy, continue the suspension of gross profit split modifications that are outlined in the Franchise Agreement.” But if you don’t have enough employees to fill those hours, what do you do? Meanwhile, SEI is raising the bar on expectations with new programs and promotions, and in many cases we can’t hire the staff we need to meet these new expectations. Sure, SEI does have the Hire Right tool that allows us to post our job openings on the internet and gets us referrals for positions. The company has even added a feature that publishes our Hire Right job postings to Indeed.com with an “Easy Apply” one-click button, and is boosting all of our job postings on Indeed.com via paid advertising for three months. But there has to be something else that helps attracts job seekers to our stores. To make our stores more attractive to prospective employees, our rate of pay has to be significantly higher than what our competitors are offering because as a 24-hour business, we demand more of our associates. At Burger King, for instance, you’re either a
“One option is to allow stores to close for a few hours every night when it is not profitable or the stores do not have enough staff to have them open 24 hours.” cashier or you’re a fry cook. In a 7-Eleven, our employees are working the register, they’re doing lottery, they’re doing gas, getting deliveries ready for 7Now, sweeping the parking lot, keeping the bathrooms clean, cooking food, serving food, fronting and facing the shelves, and so on. Which brings me to our other conun28
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drum—any increase in employee pay directly affects franchisee net income, and increasing sales and volume typically comes with an increase in labor hours. One way to remedy this is to increase the retail prices inside the store, focusing much more on gross profit, but SEI discourages this. Here is where our struggle is: SEI is making record profits on gas while franchisees get a set commission. Our direct competition— whether it’s RaceTrac, Wawa, Sheetz, Maverick, you name them—are all making very close to the same amount on gas, and whether its 35 cents per gallon profit or 18 cents a gallon, 7-Eleven franchisees get a flat penny and a half per gallon. SEI believes that our customers are very sensitive to the prices of the products in our stores, some more than others, so SEI wants to manage the retail prices in order to move more volume in the store and hopefully grow customer counts, and more vehicles at the pumps. More volume and increased customer counts is crucial to our long-term success, but as mentioned earlier, it also means more labor and the expense that comes with it. This equation doesn’t work for franchisees because the gross profits in the store are not keeping pace with the rising cost of the labor. This is not the same situation at the gas pump, where once those pumps are installed, there are certain fixed costs and there are certain costs that grow with your volume, like credit cards fees. Yes, gas pumps and facilities need to be maintained and replaced and this is a large investment, but this happens over time and can be planned. Our gross profit split model, which has been our competitive advantage, now becomes a weakness. It allows room for our competitors to attempt to take market share from us because we operate our stores on a labor model, and we will have to increase our labor, which means we’re going to have to increase our re
“To make our stores more attractive to prospective employees, our rate of pay has to be significantly higher than what our competitors are offering because as a 24-hour business, we demand more of our associates.” tail prices. So that may force our customers to go somewhere else. To prevent this, of course SEI is going to try their best to suppress custom retail pricing inside the store, which is something franchisees need in order to pay wages that will attract employees. Our c-store competitors don’t have to raise their retail prices to the same degree in order to meet labor costs because they make that up through gas gross profit. The only way for SEI to make it right is to realize that they have to modify the Agreement to correct the current imbalance that exists. One option is to allow stores to close for a few hours every night when it is not profitable or the stores do not have enough staff to have them open 24 hours. Then these stores can reallocate some of that labor from the overnight to their other shifts. This would eliminate a lot of stress for us, but unfortunately we can’t do that because of our contract, which calls for an increase in our 7-Eleven Charge if we reduce hours. Right now, the labor shortage is affecting every retail business. Once the unemployment stimulus ends and more people re-enter the job market, we will be competing with retailers big and small, and it will become a shark frenzy. If we can’t match or beat the pay rates offered by our competitors, we may find ourselves sitting on the floor while they occupy all the chairs.
You Are Not Alone! Chapter 3 ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF
On April 13, 2021, U.S. Senator Elizabeth Cortez Masto of Nevada issued a comprehensive report on franchising in the United States entitled Strategies to Improve the Franchise Model: Preventing Unfair and Deceptive Franchise Practices. is 86 page report, which includes substantial amounts of information regarding the 7-Eleven system, complements two earlier reports which to some extent also focused on 7-Eleven, issued by regulatory authorities in Australia and Japan, about which I reported to you in 2019 with the hope that similar initiatives would be undertaken in the United States. at hope has now been realized. You can read the Cortez Masto Report here: https://www.cortezmasto. senate.gov/imo/media/doc/Franchise %20Report%20from%20the%20Oﬃce %20of%20Senator%20Cortez%20 Masto.pdf To briefly review, Chapter One involved the March 14, 2019 Australian Joint Committee on Corporations and Financial Services report entitled Fairness in Franchising. e Joint Committee identified “systemic exploitation of some franchisees by a subset of franchisors and a regulatory framework that does not provide adequate protection against such practices.” e Joint Committee also concluded that presale disclosure and transparency are important but are not adequate to protect franchisees from
“abuse of contractual power by some franchisors” and that, “e current regulatory environment has manifestly failed to deter systemic poor conduct and exploitive behavior and has entrenched to the power imbalance.” Among the complaints specific to the 7-Eleven Australian system submitted to the Joint Committee were the diﬃculty of obtaining financing because the franchisor controls the premises through its lease, the challenges associated with attempting to harvest goodwill in the event of a transfer, disclaimers regarding the reliability or accuracy of financial information in the franchise disclosure document, and the exploitation of the franchise relationship by 7-Eleven. Chapter 2 involved a similar report by the Japanese Federal Trade Commission of its intent to conduct an investigation of the convenience store industry in Japan on whether 24/7 operating models and other restrictions are putting some franchisees at a disadvantage, to include a survey of franchise store operators and an examination of whether convenience
“Chapter 3 comes in the form of the Cortez Masto Report, which correctly concludes that government oversight is weak, leaving franchise owners vulnerable to unfair practices by some franchise corporations.” store franchisors are unreasonably refusing demands from storeowners, including requests for changing contract terms. A news report in e Mainichi, a Japanese daily news outlet, (“FTC to Probe Fairness of Dealings Between Japan’s Convenience Stores, Head Offices”) noted that Japanese 7-Eleven franchisees remain in a weak position and that the FTC will investigate whether that has created a disadvantage in violation of the Impact on Prohibition of Private Monopolization and Maintenance of Fair Trade. e same newspaper editorialized on May 27, 2019 (“Convenience Store Industry Needs to Depart continued on page 32
“Indeed, a December 2020 comment submitted to the FTC by three United States senators and one member of the Congress, calling for fair contract terms, captured the inadequacies of the FTC Rule perfectly: ‘Most franchise agreements are very one-sided in favor of the franchise or leaving franchise owners facing loss of assets, failed businesses in bankruptcy.’” AVANTI M A R C H | A P R I L 2 0 2 1
You Are Not Alone! Chapter 3 continued from page 31
From Current Business Model”) that the practice of shortening store hours at some stores on a trial basis and discounting good products with used by dates or drawing near by rewarding shoppers with points, were small-scale changes not adequate to match the challenges. In short, said the editorial, “major convenience store companies are slow to reform their operations apparently because they do not want to changes their existing business model that has supported the firms’ big profits.” Chapter 3 comes in the form of the Cortez Masto Report, which correctly concludes that government oversight is weak, leaving franchise owners vulnerable to unfair practices by some franchise corporations. It finds that the U.S. Federal Trade Commission does little to take action against franchise corporations that provide inaccurate information or demonstrate deceptive practices. Indeed, a December 2020 comment submitted to the FTC by three United States senators and one member of the Congress, calling for fair contract terms, captured the in-
has failed to “The senator recommends that Congress protect franprovides a private right of action for chise owners.” e report franchise owners and fair contracts.” also details problems reto prohibit unfair contracts and misported by franleading financial disclosures. chisees of 10 • States should enact legal separate franprotection for franchise inchise chains, vestors and owners, and provide reincluding 7-Eleven. Senasources for enforcement of fair practices. tor Cortez Masto’s staﬀ reached out to • e franchise sector and its trade asthe headquarters of all 10 franchise sociation must set standards or franchise brands to give them an opportunity to brands that require fair treatment for comment. 7-Eleven was among nine of franchise owners. those franchise chains that did not ree section of the report dealing spond to the invitation to participate in specifically with 7-Eleven relies on publicly the study. available documents, including financial e Cortez Masto Report highlights reporting by its parent entity, which you a number of typical unfair franchise continued next page agreement provisions and practices, including retaliation against franchisee ascontinued from sociations and their members, clauses page 24 requiring non-disparagement and nonThe Habit Burger disclosure, provisions which allow a Grill chains franchisor to change the rules at any time through text messages, popular social through their operations manuals, remedia and chat channels like WhatsApp, quiring franchisees to be Facebook Messenger, and Telegram. • 7open and operating at Eleven South Korea is stepping up to hire times when it is not profand oﬀer franchise opportunities to North itable to do so, requiring Korean defectors living in the south, report franchisees to accept unUPI. • Supermarket chain Kroger is experiprofitable prices and promenting with new ways to oﬀer customers quick, restaurant-quality meals motions, and permitting from ghost kitchens or convenient, prea franchisor seizure of a assembled dinner kits, reported CNBC. The franchised location withinvestments in prepared food could help out paying the franchisee the company’s business, particularly as anything for their eﬀort Americans grow tired of cooking or return or investment. to busier lives after getting vaccinated for e senator recommends that: COVID-19. • The U.S. Department of Agri• Congress provides a private right of culture, the U.S. Food and Drug Adminisaction for franchise owners and fair contration and the U.S. Centers for Disease tracts. Control and Prevention recently an• e FTC receives enhanced funding nounced that there is no credible eviin order to enforce the requirement of dence of transmission of COVID-19 fair contracts. continued on page 38 • e FTC franchise rule is upgraded
“The Cortez Masto Report highlights a number of typical unfair franchise agreement provisions and practices, including retaliation against franchisee associations and their members.” adequacies of the FTC Rule perfectly: “Most franchise agreements are very one-sided in favor of the franchise or leaving franchise owners facing loss of assets, or failed businesses in bankruptcy. e FTC’s approach to only require voluntary disclosure of financial representation data and its lack of enforcement 32
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can find at https://www.7andi.com/ en/ir.html, as well as articles published by the New York Times, Bloomberg News, and CSP Daily News. e Cortez Masto Report also cites as a resource the comment letter that we provided to the Federal Trade Commission on behalf of the National Coalition on December 18, 2020. ese comments, which detail numerous instances of misleading disclosures, undisclosed risks, built-in conflicts of interest and opportunistic behavior by SEI, can be found at https://beta.regulations. gov/comment/FTC-2020-0064-0103. e report includes the following issues which are familiar to all 7-Eleven franchisees in the system: • Pressure to sign the early renewal 2019 franchise agreement. • Pervasive control over franchise owners, both financially and operationally.
• A regressive gross profit split. • Declining store gross profit. • A $50,000 franchise renewal fee. • Transfer of the responsibility for liability insurance to franchisees. • Inadequate gasoline commissions. • Gasoline priced to enhance profit instead of gallons. • Increased labor costs associated with fresh food and hot foods. • A belief by some franchise owners that the company uses ICE to target specific franchisees. • One-sided legal provisions that deprive franchisees of the benefit of their home state laws. is examination of franchising in the United States is long overdue and very welcome. But it is just the beginning. We hope and expect that it will be followed up with further inquiries and
“This examination of franchising in the United States is long overdue and very welcome. But it is just the beginning.” hearings that will shed the light of day on unfair and oppressive policies, contracts and practices by franchised companies in the United States. e National Coalition will continue to exercise the constitutional rights of its franchisee constituents to petition the government for a redress of their grievances. Stay tuned. ERIC H. KARP CAN BE REACHED AT 617-423-7250 or firstname.lastname@example.org
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Vendor Guest Column
FIRE PREVENTION & EMERGENCY PREPAREDNESS – ARE YOU READY? John Harp, CSP, ARM—Risk Engineering Consultant, MSIG Insurance Group Many risks can disrupt your business and interrupt cash flow, damage property, or injure people. Whether it’s an employee victimized by an assault, a customer slip and fall, a cyber attack on your systems, or a fire or natural disaster, there can be dire consequences without proper planning. Fire or extreme weather conditions can be one of the costliest in maintaining business continuity. Fortunately, with a good risk management strategy, and property conservation, you can minimize the impact of an event or reduce the downtime. As an essential business, especially during natural disasters, it's important to continue providing refreshments, food, and fuel to your customers. As NCASEF Chairman Jay Singh described in his most recent Avanti article “A Lesson From Texas,” there is no way to be 100 percent prepared. At the minimum, have a plan to deal with calamities, especially weather ones that are increasing in frequency and severity. One of the first questions to ask is what could interrupt the continuity of store operations? We can separate these into three areas: 1. Fire—This could be a fire starting inside the store, at another store in your building,
an intentional act, or from wildfires. 2. Power—Power loss could be short-term from a car hitting a power pole or longer if it’s weather-related. 3. Weather—This is the most common source of business interruption, whether it’s a hurricane, tornado, flooding, heavy snow, or hail, the damage could close your store. The key to reducing the chances of disruption, damage, or other losses to your store is risk assessment, prevention, and emergency planning through knowing the most common causes and how they can be controlled.
Fire Common causes and what to look for: • Circuit Breaker Panel—Keep clear and properly maintained. • Water Heater—Clearance from combustibles. • Extension Cords—Keep to a minimum or not at all, and in good condition. • Roller Grill and Ovens—Properly maintained and cords in good condition. • Compressors and Cooling Equipment— Inspected and maintained. • Fire Extinguishers—Inspected and serviced annually. • Fuel Pumps—Equipment in good condi-
Leading Causes of Fire/Damage in Stores 4%
11% 11% 27%
“According to the National Fire Protection Association fire department analysis, grocery/convenience stores have the highest frequency of fires among all retail establishments.” tion and emergency shut-off easily accessible and sign visible. • Old boxes and combustible materials away from the building. • Propane storage cage secure and away from the building, if possible. • No smoking near fuel, propane, or outside storage strictly enforced. • Trees and large bushes away from the building and not over the roof.
Power Outage This could be an entire area or a local situation from a transformer problem, damaged pole, or a lightning strike. There aren’t many prevention techniques, but this should be part of your business continuity plan. Utility companies will prioritize restoration for certain essential operations like hospitals and grocery/convenience stores. Until power is restored consider a few precautions/preparations: • Call your utility company if it’s a local outage. • Keep extra flashlights with fresh batteries. • Check that computer data is backed up and is it connected to a surge suppressor. • Consider a plan to process customer purchases with cash or manual credit card transactions. • Determine your most sensitive perishables and how long will health codes allow becontinued on page 36
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fore they have to be discarded. • Consider what you can move into the vault then keep the doors closed. • Understand what happens to the safe and registers, and prepare to secure all valuables including lottery tickets. • Label your circuit breakers so you know which ones to leave on if the store is evacuated. • Anticipate what happens to any building alarms, panic alarms, and phone systems. • Know how your fuel pumps will react and if there’s a transfer switch. • Have safety cones to direct traffic. • Unplug or prepare equipment for an orderly restart once power resumes. • Consider access to a portable generator (never used indoors!). Rent or contract for an on-call unit.
Weather This is the most likely source of disruption or damage to your store. No matter what time of year or what area of the country you are located, the weather is changing and storms are more frequent and furious. FEMA estimates that almost 50 percent of small businesses never reopen after a disaster.
KNOW YOUR DISASTER SEASONS Activate Your Plan Ahead Of The Threat • Maintain a weather alert radio or app for your mobile device. • Make sure employees know what to do before a disaster is imminent. • Take steps to secure the building, equipment, and inventory depending on the type of threat.
Hurricane • Bring in items that may be a hazard during high winds. • Secure doors and windows, and shut down all non-essential equipment. • Find a safe place for valuables and important documents.
Snow and Ice: Storms are more severe from December to February.
Tornado activity on the gulf coast in early spring.
Hurricanes: The Atlantic season is from June 1 to November.
Pandemics and flu: Can happen anytime, but in December and January flu peaks.
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Wildfire Extreme heat
Thunderstorms and hail peak in June into late summer.
Flood • Know your flood risk (FEMA flood maps will show your risk and flood zone). • Consider access to tarps to cover equipment or in conjunction with sandbags at the doors.
Earthquake • Ensure displays and shelves are secure, and bottles or heavy items are on lower shelves. • Make sure everyone knows how to “Drop, Cover and Hold On.” Know the safe spots in the store.
Tornado • Consider there is little time to react, so keep a weather alert radio and look for danger signs like dark, greenish sky, large hail, or a loud roar. • Move to the center of the store away from any windows. The restroom is a good spot.
Other Items To Prepare For An Emergency • Keep an emergency kit with flashlights, tape, batteries, masks, gloves, blankets, and more. (See resources below.)
After The Disaster • Stay in communication with the authorities and employees so they know when it is safe. • Inspect the facilities and determine if it is safe and what damage occurred. Take photos. • Call your insurance company. • Review your plan—what worked, what needs improvement.
“FEMA estimates that almost 50 percent of small businesses never reopen after a disaster.” 36
Tornado activity is highest from May to June in Texas and most of the Midwest.
SUMMARY No matter what the weather or emergency might be, success in preventing injuries and mini-
mizing damage and downtime is through being prepared. Be ready to protect your employees, customers, and your business. There’s no way to know exactly if or when a disaster might strike and in some cases, there may be little you can do, but preparing will give you the best chance to be safe and have your store ready to reopen. Insurance is critical to your business recovery and resilience. Although I cannot cover the specifics of your property contract responsibilities, it's important to annually review your property and business interruption insurance program with your agent or broker. Resources: https://www.sba.gov/business-guide/manage-your-business/prepare-emergencies https://www.ready.gov/ https://www.convenience.org/Topics/Operations/Disaster-Preparedness/Emergency-Planning-and-Job-Aid https://www.nixle.com/ (local public safety text alerts) Apps for IOS and Android: WeatherBug Emergency: Alerts FEMA Shelter Finder Know Your Plan If you need assistance with your emergency planning, or checklists to complete your own assessment, contact your agent, broker, or insurance carrier. JOHN HARP CAN BE REACHED AT
email@example.com or 908-604-2951
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COVID-19 VACCINE DOS AND DON’TS FOR FRANCHISEES By Rob Bernstein, Esq., Partner, and Elizabeth Rice, Associate, Laner Muchin, Ltd.
● Don’t encourage employees to get one COVID-19 vaccine over another. The vaccines currently approved for emergency use by the FDA (currently just Pfizer and Moderna, as the Johnson & Johnson vaccine was recently recalled) are effective against COVID-19 and medical experts, including White House Chief Medical Advisor Dr. Anthony Do: Fauci, advise getting whichever is available. ● Encourage employees to receive the COVID-19 ● If you require employees to get the COVID-19 vaccine when they are eligible. As part of this envaccine (which may be legal, depending on the circouragement, educate employees on the vaccine. cumstances, but is not generally advised from an ● Continue COVID-19 health and safety protocols employee relations standpoint), don’t pein your location, including cleaning nalize employees who refuse to get the protocols, requiring all employees and vaccine due to a disability, medical concustomers to wear face coverings, fredition, or religious belief. Additionally, quent hand washing, and social dissome states have laws that protect tancing. Although some (or all) employees who object to mandatory employees may be vaccinated, there is vaccination for other reasons, and still a risk that COVID-19 can be spread employers should familiarize themin the workplace as no COVID-19 vaccine selves with the laws in their state beis 100 percent effective. fore taking a stance on this ● Encourage your employees to con“Don’t treat your issue. Keep in mind that, at this tinue to take precautions against employees who have juncture, most employers are not COVID-19 outside of work, even if they mandating that their employees been vaccinated are vaccinated. ● Allow your employees to take time differently than those get the COVID-19 vaccine. Inmost employers are away from work to attend COVID-19 who have not for work stead, choosing to educate their emvaccination appointments, if necessary. scheduling purposes.” ployees about the benefits and ● Offer your employees sick leave risks of the vaccine and are en(paid or unpaid, depending on state couraging their employees to get the vaccine. law) if they feel ill due to COVID-19 vaccine side effects. Encourage employees to inform you of their ● Don’t treat your employees who have been vaccinated differently than those who have not for work vaccination appointments in advance so you can scheduling purposes. While employees who have not better arrange for coverage if need be. ● Consider whether an employee who has potentially been vaccinated may be more susceptible to COVIDhat does not mean that they are less able to work been exposed to COVID-19 has been vaccinated bethan employees who have been vaccinated. fore requiring the employee to stay home from work. ● Don’t loosen COVID-19 health and safety protoThe CDC has issued guidance stating that people cols, even if many of your employees and cuswho have been fully vaccinated do not need to quartomers are vaccinated, as no COVID-19 vaccine is antine after COVID-19 exposure, unless they show symptoms or test positive for COVID-19. However, you 100 percent effective and research shows that all may still require vaccinated employees to quarantine three COVID-19 vaccines approved for emergency use in the United States are not as effective and/or get tested before returning to work after a against COVID-19 variants. COVID-19 exposure or potential exposure.
As more individuals receive the COVID-19 vaccine, our franchisees may be left with questions about how they should treat employees who are vaccinated, whether they should relax their COVID-19related safety precautions, and more. Here are some helpful dos and don’ts for franchisees regarding COVID-19 vaccination and related issues.
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through food or food packaging. • DoorDash has teamed up with two health providers— Vault Health and Everlywell—to oﬀer same-day delivery of COVID-19 test kits with quick turnaround times, reported Yahoo Finance. • Costco recently increased its minimum wage to $16 an hour, reported NPR. Costco raised its starting pay to $15 per hour in 2019. More than half of Costco’s hourly workers in the U.S. are paid above $25. The company employs about 180,000 U.S. workers. • Drive-thru ordering surged over the last year as the coronavirus pandemic shuttered indoor dining and made consumers wary of entering restaurants, reported CNBC. Industry experts believe drive-thru ordering will stay above pre-pandemic levels, and fast-food chains are ramping up investments to make their drive-thru lanes more eﬃcient. • Dollar Tree Inc. is stepping up its rollout of an experimental store concept that combines its sister Dollar Tree and Family Dollar brands under a single roof, reported Winsight Grocery Business. Company oﬃcials said the “combination stores” could grow to several hundred locations in the coming years. • McLane Company, Inc. recently introduced McLane EDGE, a digital platform that oﬀers marketing and merchandising insights, the latest sales-building programs, services, promotions, category trends, and new products. • Bitcoin ATMs are popping up in convenience stores, smoke shops and gas stations across the U.S., reported Reuters. The machines have multiplied quickly over the past year, fueled by a frenzy in crypto trading that sent bitcoin prices over $58,000. • Dollar Tree Inc. is hiring thousands of full- and part-time associates at Dollar Tree and Family Dollar stores and continued on page 46
Franchisees with questions about COVID-19 or labor issues can contact NCASEF’s labor and employment counsel, Rob Bernstein (Partner, Laner Muchin, Ltd., rbernstein@laner muchin.com) and Liz Rice (Associate, Laner Muchin, Ltd., firstname.lastname@example.org). Rob and Liz may also be reached at (312) 467-9800.
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posted at each of the stores seeking to serve alcohol.
Gas Demand Exceeds 2020 Levels For First Time Year-on-year gasoline sales in the United States have moved into positive territory for the first time—on the one-year anniversary of the first major declines that resulted from COVID-induced stay at home orders, reveals the latest data from Oil Price Information Service (OPIS) by IHS Markit. However, demand still trails pre-pandemic levels by a considerable margin. U.S. gasoline same-store sales in gallons for the week ending March 20, 2021 were 10.1 percent higher than 2020, according to OPIS Demand, a weekly survey of more than 25,000 fuel stations na-
“Year-on-year gasoline sales moved into positive territory for the first time on the one-year anniversary of the first major declines that resulted from COVID-induced shutdowns.”
tionwide. Nevertheless, same-store gasoline sales were still 16 percent below prepandemic levels. Prior to the week ending March 20, 2021, gasoline volumes had mostly hovered in the range of 15 percent to 18 percent below prior-year levels since the start of 2021. e main exception was the week ending February 20, which saw a year-onyear decline of 22.4 percent due to impacts from Winter Storm Uri. e extent of the current rebound varies by region, the report states. e Southwest region surpassed 2020 volumes by 15 percent. Meanwhile, the Southeastern part of the U.S. surpassed 2020 levels by only 8.6 percent, largely due to many states in the Southeast not moving as quickly to mandated stay at home orders as the rest of the country did last year.
Alcohol Sales Drop For The First Time During Pandemic For the first time in a year, since COVID-19 began spreading across the country forcing Americans to
stay home, retail alcohol sales have fallen, reported CNN Business. According to newly released data from Nielsen, total sales declined 1.9 percent for the week ending March 13. is time a year ago, consumers stockpiled alcohol as shelterin-place orders were implemented across several U.S. states, and bars and restaurants were closed or reduced service. As a result, retail alcohol sales shot up as much as 55 percent in March 2020 with spirits, wine and beer among the top sellers. Now that trend appears to be waning, and the decline reflects the reopening of bars and restaurants.
Pandemic Affects Couche-Tard’s 3rd Quarter Financials For its third quarter ended January 31, 2021, Alimentation Couche-Tard Inc. announced net earnings of $607.5 million, compared with $659.9 million for the third quarter of fiscal 2020. The company stated that the COVID-19 pandemic continues to have a meaningful impact on its quarterly financial results. Traffic remained soft throughout continued on page 45
Want to talk to other franchisees? To find the FOA closest to you. Visit www.NCASEF.com to contact any one of the 41 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.
Paul Lobana, Vice Chairman, President, Southern California FOA
Rehan Hashmi, Vice Chairman, Vice President, Alliance Of 7-Eleven Franchisees
Ajinder Handa, Vice Chairman, President, Greater Seattle, FOA
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Legislative Update remains in a declared civil emergency. e City Council passed the wage hike law unanimously in late January, aer advocacy from the United Food and Commercial Workers Local 21. e lawsuit, filed in U.S. District Court in Seattle, alleged the city’s law interferes with the collective-bargaining process between grocery stores and unions and also “picks winners and losers” by singling out large grocery companies. e law, the grocery industry wrote in court filings, “is devoid of any provisions that address employee health or safety” and was enacted under “purely political justification” aer lobbying by the UFCW. “…[G]iven the City’s findings that large grocery businesses have earned record profits during COVID-19 … and that grocery store employees are at significantly heightened risk of contracting COVID-19,” U.S. District Judge John C. Coughenour wrote, “[t]his is a reasonable grounds for the distinctions drawn in the Ordinance.”
Maryland Bill Will Add Beer & Wine To C-Stores ere’s a push in the Maryland General Assembly to change the state’s alcohol sales law to allow beer and wine in convenience and grocery stores, reported WTOP News. e Maryland Retailers Association is pushing for the change, telling lawmakers in Annapolis that the state’s consumers don’t have the convenience that 85 percent of Americans have—the ability to buy beer and wine in grocery stores. Maryland alcohol sales are governed by a 1978 law that prohibits chain stores from selling alcohol and denies alcohol licenses to nonstate residents. ose pushing for the change argue that consumers want more choices. Under the terms of the bill in the General Assembly, local licensing boards would issue beer and wine sales licenses to chains that meet certain criteria, the first of which is that they must be located in one of the states “priority funding areas”— existing communities where local governments want state investment to support future growth. To receive a beer and wine license, the store must sell foods from the following categories: fresh fruits and vegetables, fresh and uncooked meats, poultry and seafood, dairy products, canned food items, frozen foods,
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dry groceries, baked goods, and nonalcoholic beverages. e store would also be required to reserve a state-mandated percentage of shelf or floor space devoted to the food items.
Utah Bill Would Allow Online Beer & Liquor Orders Utah lawmakers recently introduced a bill that would allow adult consumers to order beer and liquor online, reported e Salt Lake Tribune. HB371, a catchall alcohol measure, addresses the 21st-century convenience that consumers have been clamoring, especially “A NEW UTAH BILL WOULD ALLOW during the pandemic. ADULT CONSUMERS TO ORDER If approved, online BEER AND LIQUOR ONLINE.” ordering of beer at grocery stores would be allowed as long as the retailer does not process payment before it verifies that the customer—who still must go into the store—is the person who placed the order and that she or he is 21 or older. Under current state law, consumers cannot place a beer order online. Grocery store employees can bring everything from milk and carrots to soap and toilet paper to a car for curbside pickup. But if shoppers want beer, they have to go inside to buy it. e restriction has been in place to prevent underage buyers from purchasing alcohol. e online ordering would not apply to Utah’s state-run liquor stores or smaller “package agencies” operated on a contract basis in rural areas. e bill also does not address the issue of home delivery of alcohol. at convenience likely will remain illegal in Utah for the foreseeable future.
Pennsylvania May Allow Liquor Sales In C-Stores A new bill in the Pennsylvania House would allow consumers to buy distilled spirits like vodka and whiskey in more places, including convenience and grocery stores, reported WPXI-TV. e Distilled Spirits Council of the United States calculates that the state currently has 0.68 spirits outlets per 10,000 people. e national average is 3.27 spirits outlets per 10,000 people. e council believes this bill would boost small businesses and increase state revenue.
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its network due to increased restrictive social measures and continued work from home trends across the various geographies in which Couche-Tard operates. However, consolidation of trips, new shopping options and adapted product oﬀerings enabled growth of merchandise sales. Couche-Tard reported total merchandise and service revenues of $4.5 billion, an increase of 5.6 percent. Same-store merchandise revenues increased 2.9 percent in the U.S., 2.8 percent in Europe and other regions, and 4.7 percent in Canada. Merchandise and service gross margin, on the other hand, decreased 1.0 percent in the U.S. to 33.0 percent, 0.7 percent in Canada to 32.2 percent, and 3.8 percent in Europe and other regions to 38.5 percent, which was impacted by the integration of Circle K HK. Merchandise and service gross
margins were negatively impacted by COVID-19.
Contactless Payment Use Continues To Grow e demand for contactless payment options has soared during the pandemic, with 92 million people using some type of mobile wallet function in 2020, and that figure is projected to grow to 101.2 million people this year, a report from eMarketer shows. is comes aer 29 percent year-over-year growth in 2020. Usage is now on track to surpass half of all smartphone users by 2025, the report states. Not only has mobile wallet usage increased, but the average annual spend per user will grow 23.6 percent in 2021 to $2,439.68. It’s now on pace to surpass $3,000 by 2023.
Join Your Local Franchise Owner’s Association Today! The best way to stay informed of the latest changes and challenges to our 7-Eleven system—and the convenience industry, in general—is to join your local Franchise Owner’s Association. FOAs help franchisees share ideas and concerns, and allow us to approach “None of us is as great our franchisor and vendor as all of us together.” partners with a unified voice. Becoming an FOA member also makes you a member of the National Coalition, which consists of all 41 FOAs nationwide. To join your local organization, contact the FOA president closest to you, or follow the instructions below to fill out an online membership form. If you cannot find the FOA closest to you, contact email@example.com for more information. We welcome your participation!
“e number of people using contactless payment options like mobile wallets is projected to grow to 101.2 million this year.” Apple Pay remains the dominant player in the mobile wallet game with 43.9 million users in 2021. Between 2020 and 2025, it will add 14.4 million users, far more than its competitors. at will increase its lead over No. 2 Starbucks. In third place, Google Pay will add 10.2 million users by the end of the forecast period. continued on page 46
How do I join an FOA? 1. Log in to 7 Help using 7 Hub (secured) in-store or using this link https://7elevenna.service now.com/ from any external device. 2. In the search bar type “FOA.” 3. Select the popup suggestion “FOA/PAC: FRANCHISE OWNERS ASSOCIATION.” 4. Type “NONE” in the “Current FOA” box if you are joining an FOA for the first time or you are not a member of any other FOA. 5 Type in the full name of the FOA that you wish to join (No abbreviation) in the “Future FOA” box. 6. Type in the amount of monthly dues as instructed per local FOA. 7. Type “Please enroll (store number) as a member of (name of the local) FOA.” 8. Repeat Step 7. 9. Press the green submit icon.
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NACS Joins Groups To Delay EMV Compliance NACS, together with Energy Marketers of America, the National Association of Truck Stop Operators and the Society of Independent Gasoline Marketers of America, have requested a delay of the deadline for the upcoming EMV liability shi for automated fuel dispensers to October 2021, reported NACS Online. e requests were sent to American Express, Discover, Mastercard, Visa, Voyager and WEX. e deadline to shi liability from card firms to retailers was originally scheduled for October 1, 2017. However, given the challenges facing convenience retailers in compliancy, American Express, Discover, MasterCard and Visa extended the deadline to October 2020. When COVID-19 struck, many retailers had their eﬀorts to become EMVcompliant disrupted. e card brands granted another extension, this time to April 16-17, 2021. e letter outlined how small business fuel retailers, in particular, have been confronted with new challenges over the past year, including severe winter storms and a shortage of technicians for installation.
Bloomberg. Retailers have been asking both networks in recent months to delay hikes in so-called swipe fees, hoping to avoid a jump in costs for accepting cards at a time when consumers are especially reliant on online shopping. e companies’ plans have drawn attention from Senator Dick Durbin, the Illinois Democrat who previously helped limit fees on debitcard transactions. As part of its delay, Mastercard said it’s also pushing back plans that would have caused some bricks-and-mortar retailers, along with convenience stores and supermarkets, to see higher rates. e network vowed that it would “continue to be thoughtful” about the timing of implementing the changes.
Restaurants Warn Against Minimum Wage Hike
e restaurant industry is urging Congress against increasing the federal minimum wage, warning that restaurants would suﬀer from a fast-tracked wage boost amid the coronavirus pandemic, reported e Hill. e National Restaurant Association recently wrote a letter to congressional leadership, arguing that raising the federal minimum wage would push more employees oﬀ of payroll, raise menu prices and force Visa Inc. and Mastercard Inc. are more restaurants to close. Democrats postponing plans to boost the fees U.S. want to boost the minimum wage from merchants pay when consumers use $7.25, where it has stood since 2009, to credit cards online, pushing back the $15 an hour by 2025. e association changes another year to April 2022 beconducted a survey that found that 82 cause of the pandemic, reported percent of restaurant operations say the initial wage in“Visa and Mastercard are postcrease would negatively poning plans to boost their impact the ability of the restaurant to recover from the swipe fees another year to April pandemic. e survey also
Visa & Mastercard Delay Swipe Fee Hikes
2022 because of the pandemic.”
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distribution centers across the U.S. to support its growth plans, reported Progressive Grocer. • New Jersey Governor Phil Murphy recently signed three bills to legalize and regulate marijuana in the state, following years of failed attempts by the legislature, reported Axios. New Jersey is the 13th state to legalize recreational marijuana. • New York recently legalized recreational marijuana for adults, reported ABC News. Under the new law, the substance will have a 13 percent sales tax. The governor’s office said as many as 60,000 new jobs could be created and the state will generate $350 million in revenue annually. • Pilot Company, owner of Pilot Flying J Travel Center, is offering a onetime $75 incentive to employees who choose to get the COVID-19 vaccine. The company said the incentive will be available to all Pilot Company hourly workers, professional drivers and general managers in the United States and Canada. • White Castle celebrated its 100th birthday on March 10. In 1961, White Castle became the first fast-food restaurant to sell 1 billion hamburgers. • Love’s Travel Stops announced that it is offering its Oklahoma-based store and corporate employees the opportunity to voluntarily receive the COVID-19 vaccination for free at its Oklahoma City corporate offices. • Mars Wrigley recently announced that it has partnered with biotechnology company Danimer Scientific to develop home compostable packaging for some of its most popular candy products. The first Mars Wrigley brand to use this new environmentally friendly packaging will be Skittles, and it will be introduced by late 2021 or early 2022. • Businesses in Japan and other Asian countries are using more robots and machines than ever to replace and reduce human contact as the COVID-19 pandemic lingers, reported Nikkei Asia. For Japan, the use of robots also addresses a long-standing issue of chronic labor continued on page 48
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found that 98 percent of restaurant operations said raising the federal minimum wage and eliminating the tip credit would lead to increasing menu prices.
Couche-Tard To Sell 355 Stores Circle-K parent company Alimentation CoucheTard Inc. recently announced an agreement to sell 49 sites in Oklahoma to Casey’s General Stores Inc. for $39 million in an all-cash transaction. e transaction includes 46 leased and 3 owned properties and is expected to close by July 31, 2021. In a separate but related initiative, the company has retained a real estate advisory firm specialized in the convenience and fuel industry to coordinate the sale of 306 sites across its North American network. e mandate includes 269 sites across 25 states in the United States and 37 sites across 6 provinces in Canada. Of the 306 sites, 122 are fee-owned and 184 are leased, while 238 properties sell fuel and 68 are convenience only. In a released statement, Couche-Tard said the decision to divest select stores fits within its net-
work optimization strategy and follows a comprehensive and uniform network planning process that began in the Fall of 2020, in which the company identified sites that no longer fit its strategic objectives, either from a brand perspective or from a regional scale perspective.
Wawa Announces Chainwide Hiring Campaign Pennsylvania-based convenience chain Wawa recently announced plans to launch its first annual hiring campaign of the year with the goal of hiring 5,000 new associates by the end of May. e annual hiring campaign will span the spring season and last through Memorial Day Weekend. With more than 650 stores located in the Mid-Atlantic region (Pennsylvania, New Jersey, Delaware, Virginia and Washington, D.C.) and 210 stores in Florida, the company said this employment eﬀort will focus on adding to Wawa’s “rapidly growing family of diverse, committed and energetic associates.” e new positions are the result of seasonal and store growth across Wawa’s operating area and will aim to fill both continued next page
Questions For The CEO? Got a question you want to ask the CEO of 7-Eleven? Submit it via email to nationalcoalition@NCASEF.com. Include the phrase, “Question for the CEO.” We’ll print your question here next issue. All questions are anonymous. The changing environment franchisees face over the next year is bound to raise many issues we have not faced before. We have all signed a new contract that we have yet to test in practice. So, got a question? Let us know: firstname.lastname@example.org 48
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shortage among a rapidly aging population. • Retailers are fast tracking robotic automation technologies to assist with a variety of tasks—from floor cleaning to shelf scanning—in the wake of COVID-19, with one in four retailers saying they currently have an in-store robotics project underway, according to a new survey by RetailWire and Brain Corp. • Burger chain Shake Shack has begun testing fully compostable straws and cutlery made without synthetic plastic at some locations in California, Florida and New York, reported Restaurant Business. The chain is also replacing plastic water bottles with aluminum ones at select eateries on the West Coast. • RaceTrac Petroleum has posted on its website that it recently suﬀered a ransomware attack through one of its third-party service providers called Accellion Inc. The company claims the systems used for processing customer credit, debit and RaceTrac Rewards transactions were not impacted. • More than half of small businesses (56 percent) expect the cost of compensating their employees to increase in 2021 through providing health benefits, offering paid time oﬀ, expanding family leave, and listening to employee requests, according to a new report from Clutch. • Swisher recently announced that, in partnership with the University of North Florida’s Center for Entrepreneurship and Innovation (CEI), the Swisher Startup for Underrepresented Entrepreneurs has awarded three entrepreneurs funding to support the development and growth of their businesses. • Krispy Kreme is oﬀering customers an extra incentive to get vaccinated—a free Original Glazed doughnut to those who present their vaccine card at any Krispy Kreme store in the U.S., reported NBC News. As an added bonus, customers with vaccine cards can return every single day for continued on page 51
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store-level customer-service, supervisory and management-level positions. Wawa said the large scale hiring eﬀort furthers its overall commitment to provide job opportunities in local communities that can lead to long-lasting careers.
Sheetz To Hire Over 2,800 Employees Pennsylvania-based convenience chain Sheetz recently held a hiring day event for full-time and part-time positions on March 31, 2021 at all of its 619 store locations across Pennsylvania, North Carolina, Virginia, West Virginia, Ohio and Maryland. e company said it plans to hire over 2,800 employees company wide. is hiring drive came on the heels of Sheetz’s investment of $28.5 million in store employee wages. Sheetz also recently announced an updated parental leave policy which includes 12 weeks of fully paid time oﬀ for new mothers and two weeks of fully paid time oﬀ for partners. Sheetz said it oﬀers competitive pay and benefits packages to all employees, including medical and dental insurance, a 401(k) retirement plan, college tuition reimbursement, an employee stock ownership plan, flexible schedules, opportunities for advancement, quarterly bonuses, and vacation time.
Walmart To Increase Employee Wages Walmart is giving 425,000 employees a raise, a move that will increase its average pay to above $15 an hour, reported CNBC. e retailer is the country’s largest private employer with a U.S. workforce of 1.5 million people. Its minimum starting wage will remain $11 an hour. Beginning March 13, the company started paying store workers who stock shelves or support its e-commerce business $13 to $19 an hour, depending on their role and store
● e “Hunkering Down” segment, comprising 28 percent of “Walmart will continue to shoppers, made moderate raise its minimum wage over changes, including shopping less and spending less. time, but it will vary based on ● e “Social Distancers” segment, where the store is based.” comprising 28 percent of shoppers, made only small changes, like buying more groceries than usual. location. Walmart CEO Doug McMillon ● e “Staying the Course” segment, comsaid Walmart will continue to raise its prising 23 percent of shoppers, made no minimum wage over time, but it will vary real changes to their shopping habits and based on where the store is based. Instead had less overall COVID concern. of hiking wages across the board, he said it is giving its pay increases to employees with key roles or more tenure. He said Walmart wants to make sure it creates a career path for them at the company.
Historic West Palm Bank Converted To 7-Eleven
Four Distinct Consumer Groups Emerged From Pandemic A new report from Acosta breaks down changes in shopping behaviors among four distinct consumer groups that emerged as a result of the pandemic. e new consumer groups identified by Acosta in “COVID Consumer Journey: Passive to Panic” include: “Staying the Course,” skewing toward younger, employed males; “Social Distancers,” skewing toward employed millennials and/or millennials with children; “Hunkering Down,” leaning toward older and retired or unemployed individuals; and “Panic Button,” more likely to be Gen-Xers with children or older individuals with no children. e report provides a comprehensive analysis of the diﬀerence in shopping behaviors between the four consumer groups, including: ● e “Panic Button” segment, comprising 21 percent of shoppers, has high COVID concern and made significant and swi changes, like stocking up and shopping online.
e historic First Federal Savings and Loan building near downtown West Palm Beach, Florida will reopen in July as a 7Eleven and six-pump gas station—a convenience store with a grand glass-lined two-story rotunda, sparkling 1950s-era chandelier, and the building’s signature standalone clock, reported e Palm Beach Post. e unusual coupling of historic building and modern pragmatism came aer lengthy negotiations between the City of West Palm Beach’s historic preservation oﬃce, a design architect with Spina Orourke Partners, developer Flagler Realty and 7-Eleven, the article states. A current, much smaller, 7-Eleven in a strip mall nearby will go away in favor of the new property, which will have a seating area in the rotunda as well as outdoor seating. e city granted several waivers so that 7-Eleven could more eﬃciently use continued on page 51
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free donuts through the end of 2021. • The national pet industry generated $103.6 billion in sales in 2020, the highest level in industry history, according to the American Pet Products Association. The group said pets provided solace during the pandemic year and expects the sales momentum to carry into 2021-22. • More companies, including PayPal and Starbucks, are accepting bitcoin and other cryptocurrencies as payment, despite volatility warnings, reported Business Insider. Fast-food chains like Burger King and Taco Bell, and leading beverage companies like Coca-Cola, are also embracing cryptocurrencies. • A man recently won $500,000 playing the North Carolina lottery with numbers he got from a fortune cookie, reported Fox 29 Philadelphia. The man said he picked up his Chinese take-out along with the fortune cookie, then he bought a lottery ticket from a 7Eleven store based oﬀ the fortune cookie’s numbers. • Ford Motor became the latest automaker to accelerate its transition to electric cars, saying that its European division would soon begin to phase out vehicles powered by fossil fuels, reported the New York Times. By 2026, the company will oﬀer only electric and plug-in hybrid models, and by 2030 all passenger cars will run solely on batteries. • Some convenience stores in the city of Jackson, Mississippi are now required to have security guards, reported WLBT. The city council recently approved an ordinance requiring 24-hour convenience stores to have security personnel in place between the hours of 12 a.m. and 5 a.m. • Amazon is considering opening discount retail stores selling a mix of home goods and electronics, reported Bloomberg. The outlets would carry unsold inventory sitting in Amazon’s warehouses at steep discounts, according to the article. • The OCBC Bank is rolling out a new
the property, including reconfiguring the gas pumps so there will be three islands with two pumps each, allowing for 24hour operation of store, and a tax abatement designed to encourage the historic restoration. Opening date for the new 7Eleven is tentatively scheduled for July 21.
Seven-Eleven Japan Builds Store In Parking Lot Seven-Eleven Japan has built a temporary store in the parking lot of an existing 7-Eleven aer its former franchisee refused to relinquish the location, reported Japan Today. Mitoshi Matsumoto made national headlines for almost all of 2019 aer he challenged the corporate policy of staying open 24 hours a day when there is a lack of staﬃng, so he took it upon himself to close overnight. In response, on December 31, 2019, Seven-Eleven Japan ended their contract with Matsumoto claiming that they had received complaints about the way he treated customers. Normally, this would mean the shop would close, but Matsumoto continued to run the store for a few weeks more. Aerward, the store stood vacant for most of 2020. Seven-Eleven Japan apparently grew impatient and issued an ultimatum to Matsumoto that if he did not surrender ownership of the store by March 29, 2021, they would build another “temporary”
shop in the parking lot of the existing one. Matsumoto said he would never give up because it would appear as if Seven-Eleven Japan was in the right. So on April 1, construction began on a 7-Eleven in the parking lot of another 7-Eleven.
Amazon To Open Supermarkets On East Coast Amazon plans to open four brickand-mortar grocery stores in Washington, D.C.; Franconia, Virginia; Chevy Chase, Maryland; and Warrington, Pennsylvania, which would be its first East Coast sites, reported Fox Business. Amazon would not confirm whether the new locations would fly the retailer's Fresh banner. According to the article, the company is looking for people to fill a range of roles, including managerial positions, and its minimum wage is $15 per hour for lower-tier positions. It is unclear when the stores are set to open. Amazon has several standalone grocery stores in California and Illinois.
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 email@example.com or 215-750-0178 if you would like to contribute an article to Avanti.
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LATEST EVOLUTION STORE OPENS IN PROSPER, TEXAS
SEI recently announced the opening of its latest Evolution Store in Prosper, Texas. Each 7-Eleven Evolution Store is an experiential testing ground where customers can try and buy the retailer's latest “Already this innovations in a piyear, SEI has oneering store foropened two mat, SEI said in a Evolution Stores press release. Alin North Texas, ready this year, SEI has opened two of with more planned nation- the new concept stores in North wide in 2021.” Texas, with more planned nationwide in 2021. The company opened four Evolution Stores last year in New York City, Washington, D.C., San Diego and Dallas. In addition to the Laredo Taco Company taqueria, the Prosper 7-Eleven Evolution Store offers an assortment of exclusive products, services and features customized to the neighborhoods and customers they serve. The most popular features include self-serve specialty espresso coffee drinks, on-tap novelty beverages, cookies and croissants baked fresh in store, a wide selection of national brand skincare and makeup items, and the Wine Cellar and Beer Cooler, dedicated to an enhanced and expansive selection of wine and beer. The new store is also one of a growing number to offer mobile checkout and delivery. With the 7Rewards loyalty program, in-store customers can skip the checkout counter and pay for their purchases on their phone.
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FIRST LAREDO TACO COMPANY DRIVE-THRU OPENS SEI recently unveiled its first-ever Laredo Taco Company drive-thru restaurant, located at Park Lane and Abrams Road in Dallas. The drivethru restaurant, with indoor seating as well, shares space with the newest 7-Eleven Evolution Store—the third such store in Dallas and the sixth in the country. SEI said it is driving home its commitment to innovation with these Evolution Stores, and no two are exactly alike. This marks the first time the company has operated a corporate-owned drive-thru restaurant at one of its stores. At the new Laredo Taco Company drivethru, customers can now order a Slurpee drink with their meal in a single stop, among other beverages. All told, drive-thru customers can choose from over 30 beverages and even more food options and combinations. Inside the restaurant, diners can eat their tacos with winebased frozen margaritas, beer or wine. Margarita flavors include classic, strawberry, swirl, watermelon, sangria, melon and prickly pear. In addition to Laredo Taco Company, the 7-Eleven Evolution Store at Park and Abrams offers an assortment of exclusive products, services and features customized to the neighborhoods and customers they serve.
HELPING FAMILIES IN NEED WITH MEALS In late February, SEI kicked off a multifaceted campaign to help provide meals to fam-
ilies facing hunger through its relationship with Feeding America, the largest domestic hunger-relief organization in the country. As part of the campaign, SEI implemented major programs to reach its goal of helping to provide 20 million meals—Feeding America Fridays drink promotion and Round up for Rewards, where customers can donate change and earn chances to win exclusive, once in a lifetime prizes. Feeding America Fridays: For every large Big Gulp fountain drink, Slurpee drink or cup of coffee purchased at participating stores each Friday through April 27, 7-Eleven would help provide a meal to the Feeding America network of food banks. Round up for “7-Eleven Rewards: Customers could recently kicked off a round up their multi-faceted campaign purchases to to help provide meals to the nearest families facing hunger dollar, and the through its relationship difference in with Feeding change was doAmerica.” nated to local Feeding America member food banks. All the raised funds helped the community in which the respective store operates. Also, customers who round up and scanned the 7Rewards barcode in the 7-Eleven app during checkout were entered for a chance to win one of the weekly prizes. Customers placing an order through the 7NOW delivery app could also opt-in to round up their change at checkout to be entered into the sweeps. Prizes included a trip for four to Iceland to see the Northern Lights, two tickets to the 2022 NCAA Final Four, and a chance to create an original Snapple flavor with flavor scientists.
SUSTAINABILITY REPORT DETAILS ACHIEVEMENTS SEI recently released a report detailing its sustainability achievements in 2020. From COVID-19 relief and disaster assistance to ongoing grassroots outreach and reducing its imcontinued next page
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type of ATM in Singapore that uses facial recognition instead of card-based identification, reported TechNadu.com. • Chipotle Mexican Grill recently announced that it has invested in Nuro, a leader in autonomous delivery, as part of their Series C funding round. This investment would help the restaurant chain boost its delivery network. • C-store chain Wawa has agreed to pay customers up to $9 million and spend $35 million upgrading its cybersecurity to settle a class-action lawsuit stemming from a massive data breach that exposed customers’ credit and debit card information for over nine months, reported the Philadelphia Inquirer. • Dollar General will build out its private trucking fleet to gain greater control and cut costs as shipping grows more expensive amid challenges related to the pandemic, reported the Wall Street Journal. • Kroger’s Zero Hunger | Zero Waste Foundation will invest $2.5 million in grants and other support for startup companies developing innovative methods to fight food waste, reported Progressive Grocer. • Automat Kitchen in Jersey City, New Jersey, is trying to revive the automat—self-service vending machines where customers can buy hot food, reported Business Insider. Automat Kitchen has no waiting staﬀ and it serves all its food through lockers. Customers can order in advance online, or on-site by scanning a QR code. • Teens who vape cannabis are at greater risk for respiratory symptoms indicative of lung injury than adolescents who smoke cigarettes or marijuana, or vape nicotine, according to a new University of Michigan study. • The Atlanta Retailers Association, a group of c-stores with nearly 1,000 members, recently entered into an agreement with EOS Linx to install EV charging stations powered by solar panels at select locations across Atlanta, reported Environment + Energy Leader. • GasBuddy recently announced its Pay with GasBuddy payments program has surpassed 1 million users.
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“More than 50,000 store associates have been hired by SEI or franchisees since March 2020, with plans to hire 20,000 more.”
● Exceeded original goal to reduce CO2 emissions in stores by 20 percent by 2027—seven years early. As a result, SEI is now pushing for a 40 percent reduction by 2027.
pact on the environment, some of the key LOCAL COLOR ADDED highlights of the report include: TO STORE WALLS ● More than 50,000 store associates hired SEI is making a big, colorful splash in by SEI or franchisees since March, with plans neighborhoods across America, and it is comto hire 20,000+ more to meet the increased missioning local mural artists to bring its credemand for products and services. ative vision to life at select stores, the ● Donated more than 1 million masks to company recently announced. SEI said it has FEMA and 1.25 million masks and 49,000 teamed up with The Ammersion Group, a new bottles of hand sanitizer to schools across Dallas-based creative agency, to identify acCanadian response to the pandemic. claimed artists to create neighborhood-spe● Donated $250,000 to the American Red cific murals on interior and exterior walls of Cross Disaster Responder Program and existing and new 7-Eleven stores. SEI said the opened the brand’s first-ever pop-up store in goal of the mural program is to capture each a healthcare facility, providing access to food neighborhood's energy through inclusive onand essential items for healthcare workers site murals in order to bring connection and and patient families. creativity to local communities. The company ● Gave more than $170,000 in grants to first embarked on the massive art project in community organizations through Project A- Dallas, at a new 7-Eleven Evolution Store. Game, impacting 72,500 youth. SEI said the genesis of the effort was ● Made a $100,000 gift to Feeding America. born through a visionary collaboration be● With the help of franchisees and cus- tween 7-Eleven and The Ammersion Group, tomers, contributed an additional $1 million working under the umbrella of “Artists Building Brands.” This project embraces to Feeding America through a numcommunity beautification by ber of in-store campaigns in “SEI connecting the fine art and 2020. has teamed up marketing worlds, while ● Committed to purchaswith The Ammersion also mentoring and suping 100 percent wind enGroup to identify acporting creatives of all ergy for 800+ Texas claimed artists to create backgrounds and comstores, while powering neighborhood-specific munities. more than 500 Florida murals on the walls of stores with solar energy. 7-Eleven stores.” ● Confirmed plans to add electric vehicle charging sites to 250 locations by 2027. ● Introduced a new, plant-based fountain straw, ending petroleum-based plastic straw use for cold dispensed beverages and a new, lighter weight fountain cup that uses less plastic and is 100 percent recyclable.
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Sales of 4Keeps Roses have been exploding through 7-Eleven cash registers for the past two years, and at $19.99 retail (1/2 of comparable online MRSP), stores are enjoying a 40 percent GP ($8.00 per rose). With a two-year shelf life, 4Keeps Roses require no watering or sunlight and their beautiful 12-pack displays are sold at the cash registers for easy POS access. Many 7Eleven locations are selling their total inventories during all major holiday seasons, while continuing to enjoy daily sales for birthdays, anniversaries, and those special personal occasions. Multiple color selections are available according to the current Holiday Season, and year around red 4Keeps Roses still exude the ‘Power of Love is in the Air,’ driving strong sales at cash registers 365 days a year. This highly popular and profitable 4Keeps Roses 4Keeps Roses product line is currently a generate a 40 scan-based program, and is drop-shipped percent GP and have a two-year or delivered directly to your stores, (and shelf life. tracked by Nexxus Systems for accurate accounting). With almost 4,000 7-Eleven franchisees selling 4Keeps Roses this past year, local FOA distribution and instore merchandising has also begun in areas like Las Vegas and SoCal, and is growing nationwide.
Electrolit Unveils 7-Eleven Exclusive Flavor & Zero Line Electrolit is introducing a 7-Eleven exclusive flavor— Guava—as well as Zero Berry Blast, Zero Fruit Punch Splash, Zero Lemon Breeze, and a new 6-pack variety pack. The new Zero line is Zero Calories and Zero Sugars, which will open the category to more new customers. Guava is a proven flavor in 7-Eleven and the flavor will be exclusive to 7-Eleven for 2021. The 6-pack
contains Electrolit’s top sellers—2 Strawberry Kiwi, 2 Grape and 2 Orange bottles. The 6-pack is a great addition to any ambient set and great for on-the-go. Electrolit now has 12 items in 7Eleven.
Electrolit is adding several new items, including an exclusive flavor, to 7-Eleven stores.
Panera, Lowe’s & Instacart Gift Cards Now Available InComm Payments is a global leader in payment technologies, offering 7Eleven franchisees access to the best and largest assortment of gift cards in the industry, including dining, shopping, entertainment and wireless. Now they’ve added three more great gift card brands to the 7-Eleven racks: Panera, Lowe’s and Instacart. These gift cards will be available in stores nationwide—and is just one more way InComm Payments keeps franchisees top of mind in delivering popular products to drive sales. The FinTech company is also working with their brand partners to launch exciting gift card promotions via 7Rewards this summer and fall. Look for multiple 7Rewards bonus point offers to be InComm now offers promoted via the 7-Eleven App. Several Panera, Lowe’s and Instacart gift cards. offers will have in-store signage on the prepaid card display, as well. InComm Payments is excited to bring these new offers to franchisees to help them generate more revenue.
Kellogg’s New Jumbo Snax & Pringles Kellogg’s introduces three new items to satisfy your customers’ snacking needs. continued on page 56 AVANTI M A R C H | A P R I L 2 0 2 1
New products and services for 7-Eleven Franchisees
Increase Your GP With 4Keeps Roses
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• Jumbo Snax Tiger Paws & Froot Loops—Kellogg’s Jumbo Snax bring a combination of the nostalgic brands and fun-to-eat flavors consumers love in a larger size, perfect for snacking anytime, anywhere. Available in Tiger Paws and Froot Loops flavors and shapes. • Pringles Scorchin’ Satisfy your Cheddar & BBQ—The customers’ spicy hot trend is snacking needs spreading like fire. New with new Jumbo Snax and Pringles Pringles Scorchin’ bring Scorchin’ consumers the sea- Cheddar & BBQ. soned snack experience they are looking for. Now available in both Scorchin’ Cheddar and Scorchin’ BBQ flavors.
Energize Your Bottom Line With belVita Cranberry Orange New belVita Breakfast Biscuits Cranberry Orange are a tangy, delicious blend of cranberry and orange flavors and they’re coming your way with a host of special offers. These delicious biscuits are a fast breakfast option that’s energizing for your cusGive your sales some zest with belVita tomers and your bottom Breakfast Biscuits Cranberry Orange. line. 7-Eleven is offering 200 bonus points when your shoppers buy any belVita Breakfast Biscuit and a hot beverage or private-label water—rewarding your customers while promoting add-on sales.
Convenience stores aren’t just for fueling vehicles, they’re for fueling customers. According to Datassential (January 2019), 57 percent of consumers are interested in energy-giving foods, making energy the top consideration for shoppers. belVita Breakfast Biscuits Cranberry Orange are packed with four hours of nutritious, steady energy and taste amazing. These eye-catching new fast-breakfast favorites can be merchandised on a versatile, 72-count display that can be set up as a floorstand, counter unit, or wing. And, since nothing dips and sips with a good cup of coffee like belVita Breakfast Biscuits, a FREE BELVITA promo on National Coffee Day—September 29—will bring thirsty, hungry shoppers into your store. Don’t miss out on this delicious opportunity. Order new belVita Breakfast Biscuits Cranberry Orange now.
Ocean Spray Craisins In Greek Yogurt & Milk Chocolate Are your customers craving a better sweet? Ocean Spray has you covered. They’ve taken their signature Craisins Dried Cranberries and covered them in creamy, tangy Greek Yogurt and premium Milk Chocolate Ocean Spray’s signature Craisins Dried Cranberries covered in Greek Yogurt and Milk Chocolate. for a satisfying snack your customers can feel good about giving their whole family. They can be enjoyed on-the-go, mixed into a tasty trail mix or sprinkled on top of ice cream.
Yowie Surprise Rescue Series includes one of 26 collectible endangered species animals.
American Licorice .........................40 Anheuser Busch..............................8 Aon Risk Services ....................16-17 Blue Bunny/Wells.........................22 Cima Confections..........................21 Coca-Cola...............................cover 2 Cookies United..............................34 56
Danone ........................................15 Diageo Guinness...........................19 Electrolit .......................................57 Ford Gum......................................43 InComm........................................39 Kellogg's..................................11,26 King Palm..............................cover 3
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Living Essentials ...........................29 Mars..............................................13 McLane.........................................30 Mondelez........................................4 Monster ..........................................3 Ocean Spray..................................47 Reynolds American ......................50
Sabra.............................................44 Sunny Delight...............................54 Swedish Match.............................37 Swisher..............................cover 4, 5 Tell Industries ...............................25 Vita Coco......................................6-7
foa events National Coalition 45th Annual Convention & Trade Show Gaylord Palms Resort & Convention Center
August 1-4, 2021 FOA Of Chicagoland Virtual Trade Show
San Diego FOA Day at the Races
May 10-14, 2021 Phone: 847-343-7777
Del Mar Thoroughbred Club Del Mar, California August 27, 2021 Phone: 619-713-2411
San Diego FOA Charity Golf Tournament Rancho Bernardo Inn San Diego, California June 23, 2021 Phone: 619-713-2411
Greater Oregon FOA Annual Golf Tournament Pumpkin Ridge Golf Course North Plains, Oregon July 19, 2021 Phone: 503-516-3483
San Diego FOA & FOA Of Greater Los Angeles Trade Show Temecula, California July 21, 2021 Phone: 619-726-9016
FOA Of Chicagoland Charity Golf Outing Venue TBD July 22, 2021 Phone: 847-343-7777
FOA Of Chicagoland Annual Picnic Cook County Forest Preserve South Barrington, Illinois August 21, 2021 Phone: 847-343-7777 58
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Southern California FOA Annual Trade Show Pasadena Convention Center Pasadena, California September 22, 2021 Phone: 818-357-5985
San Diego FOA Vendor Appreciation Day Alesmith Brewing Company San Diego, California October 6, 2021 Phone: 619-713-2411
FOA Of Chicagoland Virtual Holiday Trade Show October 25-29, 2021 Phone: 847-343-7777
Central Florida FOA 8th Annual Charity Golf Tournament Orange County National Golf Course Winter Garden, FL November 5, 2021 Phone: 207-415-0924
Board meetings National Coalition virtual Board meetings are being scheduled one per month. Vendors interested in sponsoring to appear virtually at these meetings should contact John Riggio, JR Planners, at 262-394-5518 or firstname.lastname@example.org.
National Coalition Board of Directors Meeting Hyatt Regency Long Island Hauppauge, New York May 19-20, 2021
National Coalition Board of Directors Meeting Gaylord Palms Resort & Convention Center Kissimmee, Florida July 31-August 1, 2021
National Coalition Affiliate Meeting Grand Hyatt Kauai Resort & Spa Koloa, Kauai, Hawaii November 15, 2021
National Coalition Board of Directors Meeting Grand Hyatt Kauai Resort & Spa Koloa, Kauai, Hawaii November 16-18, 2021
FOA Of Chicagoland Holiday Party Venue TBD October 28, 2021 Phone: 847-343-7777