73 minute read
Join Your Local FOA
We’re On It
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our 46th Annual Convention and Trade Show at the Gaylord National Resort and Convention Center in National Harbor, Maryland, August 7-10. Our Convention Committee has worked hard to bring you a full agenda of business and fun—from seminars with the NCASEF officers, our General Counsel Eric Karp, and invited SEI representatives, to a sunset dinner cruise on the Potomac and entertainment featuring famous performing artist all the way from India, Yo Yo Honey Singh.
We also have a charity golf outing to benefit the Children’s Miracle Network Hospitals at the Westfields Golf Club, and Washington, D.C. city tours you can sign up for, if you prefer. Then there’s the twoday trade show featuring the best products and deals our vendors have to offer. We’re expecting a record number of exhibitors this year with an impressive amount of items to fill your store shelves, so come ready to place orders on the spot.
So make plans to spend time with your fellow franchisees and our vendor partners, meet your NCASEF and FOA leaders, get the latest 7-Eleven news and updates, and have fun with your family. Please visit www. NCASEF.com for more information and to register.
SUKHI SANDHU
CAN BE REACHED AT 855-444-7711 or sukhi.sandhu@ncasef.com
Join Your Local Franchise Owner’s Association Today! How do I join an FOA?
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 our
“None of us is as great 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 40 FOAs nationwide. To join your local organization, contact the FOA president closest to you, or follow the instructions below to fill out an online membership form. If you cannot find the FOA closest to you, contact nationaloffice@ncasef. com for more information. We welcome your participation!
1. Log in to 7Help using 7Hub (secured) in-store or using this link https:/7elevenna.servicenow.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.
Staying Fully Stocked For The 100 Days Of Summer
BY JOE ROSSI, NCASEF EXECUTIVE VICE CHAIR
The Hundred Days of Summer are upon us, and this time around we have to be very diligent about keeping our store shelves full of the products our customers need and want. The pandemic has really done a number on us by creating a tsunami of supply chain problems and product shortages, leaving us scrambling for whatever products we can find. As we all know, empty spaces on our shelves give our customers the wrong impression and will send them to our competitors.
We have to find opportunities to bring in other products to fill the gaps in our inventory. SEI has suspended the penalties for falling out of the Recommended Vendor Purchase Requirement, which gives us some wiggle room to bring in more nonrecommended items and products from local vendors. We should make good use of that.
A great place to find new products are local FOA trade shows. We should attend as many as we can—our FOA’s trade show, our neighboring FOA’s trade show, or both—to find those items that will help drive sales during the Hundred Days of Summer. NCASEF is holding its annual convention and trade show August 7-10 at the Gaylord National Resort and Convention Center in National Harbor, Maryland, and I highly recommend you attend. Not only for the seminars and fun activities we have planned for the event, but the trade show promises to be our biggest yet with record high vendor participation. That means loads of new products and great deals to choose from to keep our store shelves well stocked.
We also need to make sure we’re adjusting our I’s so we’re not running out of product during a heat wave or during successive days of high sales. This past Memorial Day weekend my store was very busy, which was great, but if we didn’t make those adjustments to the I we could have very easily been out of product in the middle of a three-day weekend. So it’s important to be mindful of the I so we don’t miss those selling opportunities by having empty spaces on our shelves because we couldn’t refill the products.
It’s not only selling opportunities we have to watch for, but minimizing risk, also. Are we looking at our old assortments, making sure we’re in code? We don’t want to have outof-date products on our shelves because municipalities are coming to our stores trying to find any way to generate revenue at our expense. Let’s not give them any satisfaction. Take time to go through those center of the store items and make sure all out of code products have been written off and replaced.
Even though the pandemic has thrown us a curve ball with these supply chain problems and shortages of our more popular products, our vendors are introducing new items to help fill the holes on our shelves. We also now have room to try products that we may not have had the opportunity to try before thanks to the suspension of the Recommended Vendor Purchase Requirement penalty. We should reach out to our regular vendors for their latest products, and take a closer look at new vendors. And don’t forget to attend your local trade show and the NCASEF convention for more product choices.
I wish you all a very productive and safe summer-selling season.
JOE ROSSI
Franchisee Exits
BY ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF
Over the last two years, the most frequent subject matter of inquiries I get from individual franchisees or from FOA leaders on behalf of their members, relates to navigating the process for “giving back” a store. From a legal perspective, giving back a store involves termination of the franchise agreement under section 27(b) of the franchise agreement. While the reasons for these terminations are certainly debatable and beyond the scope of this article, they most certainly involve a combination of factors including the store level economic model, evolving customer habits stemming from the pandemic, significant labor shortages, and perhaps many other factors.
One of my roles as General Counsel is to carefully monitor system wide developments, so that franchisees can understand how the challenges they may be facing fit into the overall picture. We have developed an analysis that involves calculating a turnover rate, which captures the number of franchise units in a system that are involved in franchisee-tofranchisee transfers, as well as those where the franchisee terminates, elects not to renew, sells the store back to the franchisor, or simply abandons the location. We then divide the resulting number by the average number of franchised stores during the year.
The chart below illustrates that there was a significantly higher turnover rate in 2019 (nearly 6 percent) than the negligible turnover in 2011, and then a steady increase in the ensuing two years to the point where more than 9 percent of the franchised stores turned over in 2021. This is a very significant increase, which is consistent with the experience that we have had in dealing with franchisees that desire to terminate.
By digging a little deeper into the numbers reflected in the foregoing analysis, we can determine that while the number of franchisee-to-franchisee transfers over the last three years increased steadily, the number of store closures more than doubled from 2020 to 2021, as illustrated by the following chart.
Here are some typical questions that are posed to me by franchisees and the answers that hopefully will help those in the process of giving back stores. Capitalized terms are defined in the franchise agreement, usually in Exhibit E, which contains many pages of defined terms.
Is there a penalty that I have to pay?
If you give SEI at least 30 days written notice of your intent to give the store back, there is no termination penalty. If you give SEI 72 hours’ notice, then there is a $5,000 termination penalty which is debited to your Open Account. For some franchisees, the decision whether to give 30 days notice is based on whether they will lose more or less than $5,000 in continuing to operate the store during that month.
How do I give the written notice?
The franchise agreement has a very specific procedure for giving written notices. You must send the notice in writing by certified mail or recognized overnight carrier. It should be addressed to the Director of Franchise Operations. A telephone conversation with, or a text message or an e-mail, to your Market Manager is alone not sufficient. We have developed a template for the form of written notice, which you can obtain from the National Office.
What do I do after I give the written notice?
Operate the store as you always have. Clean and maintain the store in the normal course. You will be required to surrender the store in the same condition as it was when you received it, normal wear and tear accepted. If you do not clean the store or maintain the store, SEI has the right to perform those functions and charge you for them.
What about the Inventory?
You will receive a credit on your open account for the Cost Value of the Inventory. We urge franchisees to insist that they be present when the final inventory is taken in order to reduce the possibility of disputes later on. You also should consider videotaping the process if you suspect that it may be problematic.
What happens on the day of surrender?
You need to peaceably surrender the store and turn over any undeposited cash receipts as well as the cash register fund and any money order blanks, bank drafts, and lottery tickets. The franchisee must cease using any of the 7-Eleven trademarks, cease using any confidential materials, and execute whatever documents are necessary to transfer licenses and permits relating to the store.
When do I get my first payment?
Within 30 days following the surrender, SEI must credit your Open Account with cash receipts, the cash register fund,
Franchisee Exits
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prepaid operating expenses and the value of store supplies and inventory. SEI is permitted to debit your Open Account by $200 as a closing fee. SEI must then pay you the amount by which they estimate your Net Worth to exceed the greater of $10,000 or 25 percent of your total assets.
When is the final payment made?
The Final Financial Summaries are due 105 days after the last day of the month in which you surrender the store. Thus, the period of time between the date you surrender and the date you receive the Final Financial Summaries can vary significantly depending on what day of the month you surrender the store. For example, if you surrender a store on August 2, your final payment is due 134 days later, but if you surrender the store on August 30, your final payment is 106 days later.
If the Open Account has a positive balance, SEI is required to pay you that balance with the Final Financial Summaries. It is very important that you carefully scrutinize the Final Financial Summaries because if you cash the check, you waive any right to contest the calculations.
Do I have to sign any contracts or agreements in connection with the store surrender?
As noted above, you are required to execute whatever documents are required to transfer licenses and permits relating to the store and in order to negotiate the final check, you will need to endorse it. These are the only documents you are required to sign in connection with a store surrender. If you are presented with a store surrender agreement, you should read it carefully and consult legal counsel before signing it.
ERIC H. KARP
CAN BE REACHED AT 617-423-7250 or ekarp@wkwrlaw.com
Philadelphia Franchisees Meet With Police And Legislators
A group of Philadelphia, Pennsylvania franchisees led by Sukhie Thind recently met with representatives of the Philadelphia police department and local legislators to discuss matters pertaining to store employee and customer safety, as well as store security, given the recent rash of crimes targeting convenience stores in the city. Sukhie Thind was accompanied by franchisees Mohammed Ahmed, Arsh Brar, Mohammed Ashraf and Balwinder Singh, and they met with State Representatives Danilo Burgos and Martina White, Philadelphia Fraternal Order of Police President John McNesby, and FOP Vice President Nicholas Denofa.
According to Sukhie Thind, the meeting was very productive and helped strengthen the relationship between 7-Eleven stores and the Philadelphia police. There was an enthusiastic response from all parties involved, and a great deal of discussion on how to move the matter forward so franchisees, police and lawmakers can support each other to build a better and safer Philadelphia.
Don’t Leave Money On The Table— Use The WOTC Program
BY BILL HUFFMAN, VICE PRESIDENT (SOUTH), GREATER OREGON FOA
In conversations with my fellow franchisee colleagues, I am often very surprised to find out how few of them participate in the Work Opportunity Tax Credit (WOTC) program. This is a program that takes very little time to administer, and potentially yields a large return (think thousands of dollars a year).
For the uninitiated, WOTC is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. WOTC targeted groups include: 1) Qualified IV-A recipient (Temporary Assistance for Needy Families); 2) Qualified Veteran; 3) Ex-Felon; 4) Designated Community Resident; 5) Vocational Rehabilitation Referral; 6) Summer Youth Employee; 7) Supplemental Nutrition Assistance Program (SNAP “food stamps”) recipient; 8) Supplemental Security Income (SSI) recipient; 9) Longterm Family Assistance recipient; and 10) Qualified Long-term Unemployment recipient.
You can generally earn a tax credit equal to 25 percent or 40 percent of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs. You will earn 25 percent if the employee works at least 120 hours and 40 percent if the employee works at least 400 hours.
According to Synergi Partners, which administers the WOTC program for 7-Eleven, the government offers U.S. businesses nearly $1 billion in WOTC alone every year, but only 25 percent of business owners take advantage of the program. Since 20-25 percent of hourly workers are eligible for employment tax credits, it’s likely you’ve already hired people who qualify. While the average tax credit is worth approximately $1,500 and a return on investment per application is a 5:1 ratio or more, it makes good business sense to take advantage of the WOTC program in your hiring practices.
It is important to turn in the required information within 28 days of hiring a new employee. The information required is a tax form named 8850 and a tax credit questionnaire. Best practice is to have the “You can generally earn a tax credit new employee fill the two forms out when equal to 25 percent or 40 percent of a new employee’s first-year they complete the W-2 and I-9 forms. Both of the WOTC forms can be found by searching the ISP in the store’s home page.wages, up to the maximum for the Some advice: Be Patient! This is a target group to which the employee federal program that is administered by belongs.” the state that you live in. In March 2022, I received additional credits for 2020. In my experience, it has not been unusual to receive credits from two to four years prior. Be diligent and turn in forms even if you think someone won’t qualify. I hired an employee that had two foster children and that qualified her. Recently separated veterans and felons are eligible in most cases. These credits can be applied to your 1040 to reduce your tax obligation to the federal government. They expire after 20 “Some advice: Be Patient! years. If you don’t take advantage of this program, you’re basically leaving money In my experience, it has on the table.
BILL HUFFMAN
CAN BE REACHED AT 541-290-0331 or bhuffman1949@gmail.com
0821-8408-0504 8402-4560-0098 0821-8400-4333
SLIP, TRIP, AND FALL PREVENTION: GETTING A GRIP
BY JOHN HARP, CSP, ARM—RISK ENGINEERING CONSULTANT
MITSUI SUMITOMO INSURANCE GROUP
Summer is here and despite the increasing costs of travel, people want to hit the road and enjoy the freedom. With that travel there are hundreds of chances for traffic in your store, and with that traffic comes the potential for a real or alleged slip, trip, or fall.
Winter in most of the country tends to pose a higher risk of slips and falls, but increasing foot traffic with every kind of shoe or lack of footwear creates a different kind of risk. But no matter the weather, we can’t lose sight of the basic need to manage the risk of slips, trips, or falls.
Something else to consider—the jobs situation, inflation, and economy are affecting people in many ways leading to distractions (e.g., not seeing the water spill left in an aisle) or desperation and fraud (e.g., looking for a lawsuit).
The Cost
Nationally, MSIG-Aon insured franchisee locations since 2017 incurred 353 employee claims as the direct result of slip, trip, or fall injuries. These claims can be split into a slip or trip leading to a fall on the same level (on the floor to the floor) or a fall from a different level (fall from a step stool, milk case, or ladder to the floor).
2017 - 2021
Type of Slip, Trip, and Fall # of Claims Cost of Claims Fall to the same level 145 $2,904,332 Fall to a different level 208 $3,973,665 *Slip and falls were 22 percent of all employee injury claims and 26 percent of all costs.
The cost for these injuries totals almost $7 million in medical bills and lost time. At an average cost of $19,000 per claim, a small investment in safety and simple housekeeping can provide valuable savings.
Actual Claims and Total Cost
• Employee tripped on wet floor sign near coffee injuring ankle: $220,466 • Employee fell from ladder breaking elbow: $122,723 • Employee tripped over a box on the floor with multiple injuries: $32,358
There are legal reasons, too! OSHA Floor Safety Rule (29CFR Part 1910) mandates that you regularly inspect all walk areas to guarantee they are free of debris, contaminants, or other defects that could cause a slip, trip, or fall injury; and correct and guard any known walking-working risks to prevent a slip, trip, or fall injury.
Common Causes of Slip, Trip, and Fall Incidents
In today’s environment with distractions, traffic, new signs, hand sanitizers, queuing at the registers, maintaining social distance, and frequent extreme weather (e.g., tropical rainstorm in Miami on June 4), the challenge of monitoring and maintaining a safe sidewalk, parking lot, apron and store—front and back—requires greater diligence than ever.
Tips to Avoid Slip, Trip, and Fall Incidents
Parking Lot, Sidewalk, and Apron: • Potholes, cracks, and uneven surfaces should be marked as a hazard until repaired. Contact SEI immediately and maintain records. • Parking stops misaligned or damaged.
Check and immediately schedule for repair. • Stops or curbs that are well marked or highlighted in yellow increase visibility. • Quality of lighting—call immediately if
bulbs are out or dim. • Gas islands can have oil or other liquid spills. Check often and keep absorbent available for use. • Make sure the trash cans are not overflowing and there is a clear path to the dumpster. • If there is a mat outside make sure it is in good condition.
Sales Area: • Avoid low displays, especially near the front door. • Use a suitable mat at the front door, make sure it doesn’t have upturned corners and is clean. • Clean spills immediately. Add cones or wet floor signs and supervise the spill. (Your customers may go around the cones.
Warning signs alone do not prevent a liability or injury claim!)
• Do not leave warning signs out where unneeded.
Have you received your PREPAID SPINNER yet?
Designated promotional signage space
65" Tall Holds up to 130 facings of prepaid product
Features backer panels that display the POG to maintain integrity
And the best feature is... it’s completely FREE to the store!
25" Deep
26" Wide
Interested?
Please email 7elevenautoreplen@incomm.com & include: • Store number and address • Contact information for delivery • If the store is a RIS or PDI location • If the store is 7 Eleven or Stripes branded Bottom drawer can be used to store extra inventory and pegs
As always, if you need more gift cards, POP or pegs, email 7elevenautoreplen@incomm.com. 7 Eleven Branded cards can be ordered through FES.
SLIP, TRIP, AND FALL PREVENTION: GETTING A GRIP
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• Consider taller caution signs for better visibility. • Do not leave inventory, cleaning materials, or other items on the floor where a customer or employee could trip. • Make sure cameras allow for a good view of the aisles in case a record is needed of an alleged incident. • Consider mats at coffee or other food service areas where spills occur.
Sales Floor—Mopping and Cleaning: • Check that mop water is clean and the mop head is in good condition. (Time to change if it’s too dirty to see the bottom of the mop bucket!) • Replace mop heads frequently. • Use wet floor signs before-during-after mopping. • Mop only during less busy times and clean small areas at a time. • Follow wet mopping with a quick dry mop. • Check that employees understand the proper mix for cleaning chemicals. It varies by the flooring type. • Don’t leave mop buckets unattended on the sales floor.
Vault and Backroom: • Cooler floors can be slippery from moisture or leaks. Clean and use caution. • Crate dollies should be out of the aisle and turned upside down when not in use. • Lighting should be sufficient to see any trip or slip hazards. • Restroom—make sure the floor is dry and clean. Make regular checks of the room. Keep it secured unless required by local code.
Falls: • Sitting stools are not step stools. Obtain and use a proper ladder or step stool. • Milk crates are not suitable as a step stool. • Climbing on shelves or dumpsters is dangerous.
Watch the Weather (customers will bring it inside): • Be prepared with mats, dry mops, and absorbent. • In rain or snow add an extra mat at the front door (cardboard is not a good substitute). • Dry mop frequently. • Use caution-wet floor signs, but remove them when not needed. • Watch for ponding or pools of water in the parking lot or sidewalk. • Respond to and remove any “walk-in” water.
General Employee Safety Practices: • Proper non-slip shoes make a difference. • Always walk with caution—no running. • No climbing on boxes, shelves, or other items that may tip over. • Don’t leave spills unattended—cone off the area. • Only use warning signs when needed. • No cell phones while walking.
In Case of Accident: • Attend to the fallen showing concern but
don’t lift them to their feet, especially the elderly. Wait for the experts. • Get the incident facts—take photos and save surveillance footage. • Document the incident regardless of whether the employee or customer says they are okay. • Time is critical in resolving claims. Report any employee or customer incidents to your insurance company/broker within three days. • Work with your claims adjuster. They are there to help.
Conclusion
Not all slips, trips, or falls can be prevented but with proper awareness, training, and safe conditions you can greatly reduce the chances of an employee or customer getting injured in your store. The condition of the floor, mats, and general housekeeping are vital in creating an environment that feels, looks, and is safer for your employees and customers.
Take a walk on the safe side!
For more information on store floor safety, check: https://www.cdc.gov/niosh/ docs/2013-100/pdfs/2013-100.pdf.
If you need assistance with your slip and fall safety program, contact your broker, insurance carrier or me, John Harp, at 908604-2951 or jharp@msigusa.com.
JOHN HARP
CAN BE REACHED AT 908-604-2951 or jharp@msigusa.com
The Second Quarter NCASEF Board Meeting
The AR Gap and labor issues were top of mind when franchisee leaders met at the W Hotel in Scottsdale, Arizona for the second quarter NCASEF Board meeting on May 11-12, 2022. The meeting featured a full agenda that included discussions on store issues, committee updates, SEI guest speakers, vendor presentations, and a tabletop trade show.
The Board meeting was preceded by a charity golf outing on May 10 at the Champions Course at TPC Scottsdale. The event benefitted Phoenix Children’s Hospital via NCASEF’s partnership with Children’s Miracle Network Hospitals. A check for $7,711 was presented to the hospital following the golf tournament, which was very well attended by franchisees and vendors.
After introductory remarks by Chairman Sukhi Sandhu, the meeting was underway. First up were the invited guests from SEI: David Masse, Senior Director of Talent Acquisition and Workforce Management; Jasmeet (Jas) Singh, Vice President of Franchising and Operation Services; Bruce Maples, Senior Director of Franchisee Relations and Engagement; and Natalie Harris, Manager of ESG/CSR Programs and Communications.
David Massey spoke about staffing support. He said SEI has been providing support such as paying to boost job postings on Indeed.com and Snagajob. com, adding the Easy Apply feature on Indeed.com, and investing $1 million on National Hiring Day this year. However, he added, the company can’t provide this support indefinitely. He said SEI is developing a program that outsources recruitment to a third party for a small per-store monthly fee
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called Recruitment Process Outsourcing (RPO). He added that the cost for RPO is unknown at the moment, but with big franchisee participation the cost could be low. Chairman Sukhi Sandhu asked that SEI try to keep that cost as low as possible. Massey also said SEI is looking to add artificial intelligence similar to Alexa to improve Speed to Hire.
Rather than make a presentation, SEI Vice President Jasmeet Singh took questions from Board members instead. Topics that he touched upon included Check-in Simplification, which SEI is testing in several markets and is accelerating in order to get it to all stores as quickly as possible; the 7-Track app, available through a smartphone app and the 7MD device which tells you exactly what’s on the truck and what is shorted before the truck even leaves the warehouse; the franchise agreement; McLane delivery issues; AR Gaps; and 7-Boss.
Next up were Natalie Harris and Julie Breckenkamp, Vice President of National Strategic Partnerships at Children’s Miracle Network Hospitals. Natalie Harris spoke about the importance of corporate philanthropy and explained SEI’s new association with CMN Hospitals, as well as plans to support the organization with round-up and other fundraising campaigns. Julie Breckenkamp thanked NCASEF for choosing CMN Hospitals as its charity of choice and provided a brief explanation as to how the organization operates.
Among the topics discussed during the ensuing Board meeting were the need to institute three policies to retain nonprofit status—Whistleblower, Conflict of Interest, and Document Retention. A motion to accept these three policies
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The Second Quarter NCASEF Board Meeting
continued from page 33 was approved unanimously. Board members also discussed the importance of providing ROI to vendor partners, for example by placing orders during Board meetings and trade shows, and communicating to franchisees promotions and deals through various NCASEF channels like email blasts and social media. Chairman Sukhi Sandhu then spoke about the engagement he and the NCASEF officers have with SEI on a regular basis to discuss franchisee issues. He also spoke about NCASEF’s achievements so far this year, like getting SEI to delay 7-Clean four times, getting $45 million in AR Gap credit for stores, continuing talks to get the recommended vendor purchase requirement suspended due to supply chain issues, and getting SEI to agree to suspend penalties for stores closing for several hours because of staffing issues.
Also during the meeting, updates were provided by the Accounting and Finance, Convention and Entertainment, Charity Golf, Membership, and Vendor Relations and Merchandise committees. Additionally, vendor presentations were made by Bon Appetit, Swedish Match, PepsiCo, and Anheuser-Busch. After the meeting adjourned there was a tabletop trade show featuring products and deals from various vendors.
The second day of the meeting kicked off with discussion about creating two official NCASEF chat groups that would be managed by the Board—one chat group for Board members only and another for all NCASEF members (FOA franchisee members). The discussion then turned to the RPO that David Massey mentioned the day prior; possible benefits that could be offered to attract and retain employees, like free mobile service; and all stores returning to 24/7 operation on June 1, with SEI giving consideration on a case-by-case basis to stores that cannot fully reopen because of continued staffing issues. Other topics included problems with the ASI 2 accounting system and the process of correcting accounting errors, stores getting charged for unknown items, accounting cases created by franchisees getting closed without resolution, and charges getting pushed to stores.
In his report, General Counsel Eric Karp discussed franchise store turnovers and several other topics. NCASEF Treasurer Romy Singh then presented the treasury report, which was approved by motion.
Interspersed throughout the meeting were committee reports presented by the Facility Maintenance, Bylaws, Logistics/ Simplification, Store Profitability and Fuel, Government Affairs/Community Relations, and Digital/IT committees. Vendor presentations were also made by Storck, Vita Coco, and Uptime Energy.
The next NCASEF Board meeting is scheduled for August 6-7 at the Gaylord National Resort and Convention Center in National Harbor, Maryland, just before the annual convention and trade show at the same venue.
Get On The Avanti Mailing List!
Are you a franchisee and would like to re-ceive your own copy of Avanti—The Voice of 7-Eleven Franchisees? You can get on our mailing list by sending a request to avantimag@ncasef.com with your name and store address, and we’ll be sure to include you in future mailings.
November/December 2021
T H E V O I C E O F 7 - E L E V E N F R A N C H I S E E S
A New Road Ahead A New Road Ahead
Getting Past The Pandemic Getting Past The Pandemic
PERMIT No. 232 York, PA U.S. POSTAGE PAID PRSRT STD
It’s Been An Honor It’s Been An Honor And A Privilege And A Privilege A Fresh Start A Fresh Start More About The Long More About The Long Term Tenure Rebate Term Tenure Rebate Til Death Do Us Part Til Death Do Us Part Crime And Assault Crime And Assault Prevention—An Prevention—An Update For 2021 Update For 2021 2021 Tobacco 2021 Tobacco Legislation Update Legislation Update Take Another Look At SBT Take Another Look At SBT
Member News
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Legislative Update
among other requirements, according to the ordinance. Officials said L.A. will be the most populous city in the nation to take flavored nicotine products off store shelves. Statewide, California lawmakers have in 2020 approved a ban on the sale of flavored tobacco products, but it was put on hold due to a referendum backed by major tobacco companies Californians will vote this year on whether the state should ban the sale of flavored tobacco products.
Tobacco Legislation Update
Here is the latest federal, state and local tobacco legislation roundup as reported by Convenience Store News.
CALIFORNIA
• San Diego—The San Diego City Council gave its final approval to an ordinance prohibiting the sale of flavored tobacco products at its May 17 meeting. The ban, which includes menthol, goes into effect
January 1, 2023. • Scotts Valley—The Scotts Valley City
Council introduced an ordinance to ban the sale of flavored tobacco products. The ordinance includes a ban on smoking or vaping in outdoor dining spaces, requires tobacco retailers to be at least 21 years old, and prohibits all self-service tobacco displays.
COLORADO
• Denver—The Colorado Senate Appropriations Committee recently voted to kill legislation that would have prohibited the sale of flavored tobacco products in the state.
OKLAHOMA
• Oklahoma City—State lawmakers changed the punishment for anyone under 21 who uses tobacco products from a $100 fine to instead be required to complete an education or tobacco cessation program through the state De-
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to tally items as shoppers pick them off the shelves and place them in the cart, allowing them to skip the checkout line. • Alimentation Couche-Tard announced it is looking to hire more than 25,000 workers at its more than 14,100 Circle K and Couche-Tard convenience stores and support centers across North America, Europe and Asia. • Faced with staffing shortages, airlines are can-
celing thousands of flights heading into the busy
summer travel season, reported NBC News. Especially acute has been the shortage of pilots. According to one flight consultancy, U.S. airlines are trying to hire at least 12,000 pilots combined this year. • In April, out-of-stock
rates for baby formula products nationwide soared
to 31 percent, reported Fox Business. As a result, many retailers imposed baby formula purchasing limits of three products per buy. • Panera Bread recently announced that it has opened its first “Panera To Go” digital-only restaurant for rapid pick-up and delivery orders. The Chicago-based restaurant is the first of three Panera To Go test locations scheduled to open this year. The company said as of the end of 2021, 81 percent of its sales were via delivery, rapid pick-up, drive-thru or catering. • Fast casual Mexican chain Chipotle now accepts cryptocurrency as payment nationwide for burritos, bowls, and more through its partnership with digital payments network Flexa. • Walmart+ subscribers recently received some relief at the gas pump with 10 cents off a
gallon of gas at over 14,000 participating fuel sta-
tions, reported CNN Business. • Smithfield Foods Inc., the largest pork processor in the U.S. by volume, plans to close an 1,800-person pork plant in California, saying the cost of doing business in the state wasn’t worth it, reported Fox Business. Smithfield cited higher taxes, utility costs and labor costs in the state compared with other areas where it operates. • About one-third of 16- to 19-year-olds in the U.S. have jobs, and teens are work-
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ing in numbers not seen since before the 2008 recession, reported the Wall Street Journal. Teens are especially in demand in industries including retail and hospitality, which are feeling the pinch of the tight labor market, and companies are beefing up pay and perks as they recruit teens to fill summer jobs. • Massachusetts adult-use marijuana sales have officially surpassed $3 billion since the market launched in 2018, reported Marijuana Moment. With 216 cannabis retailers and 11 delivery businesses operating across the commonwealth, the total gross sales for recreational marijuana reached $3,001,846,490 as of May 14. • Hangry Planet has opened the first 24/7 plant-based convenience store in North America, reported Vegconomics.com. Located in a Shell gas station in San Bruno, California, Hangry Planet offers a huge selection of curated vegan snacks, meals and sweets. • Net sales for Costco’s third quarter, ended May 8, increased 16.3 percent to $51.61 billion,
NCASEF Committee Reports
Provided here are the reports presented by the NCASEF Committees comprised of Board members during the second quarter Board of Directors meeting in Scottsdale, Arizona on May 11-12, 2022.
ACCOUNTING & FINANCE COMMITTEE
The current focus of the committee is to understand and research the Accounts Receivable Gap (AR Gap). An AR gap occurs when a KSR item charge is subtracted from the McLane invoice charge. As it presently stands, the charged period was from July 2021 to January 2022. The charges were posted on the DMR on April 14, 2022. Full credits were issued for July and August 2021. Charges from September 2021 through January 2022 need to be researched and you have to create a case to receive credit (if you don’t agree with the charges). You will need the driver-signed FER for verification. Charge-back invoices will create an Audit Shortage and will split the shortage over a 12-month period ($15,000+ over 24 months). $100 per invoice will be credited to 48A under Other Income by SEI, up to $300 per month.
The hypothesis is, if we cross-check the AR Gap report with FER and the McLane KSR Report, then we can find the discrepancy and create a 7HUB case to get the credit for the McLane chargeback. The recommended action plan is as follows: 1. Highlight the items on FER from the McLane KSR.
2. Highlight all of those items on the AR Gap itemized report from
FER.
3. Create a 7HUB case under MASC (one case for all invoices) with the invoice number and amount.
4. Print out the case, put it on the top of the signed FER stack and scan under #3 (Merchandising
Accounting).
CONVENTION & ENTERTAINMENT COMMITTEE
We offered a $49 early registration fee for the convention from June 1 to June 29. The registration fee increased to $99 thereafter. Kids were free during early registration, then the fee jumped to $49. The hotel room rate is $129 with a $50 per night subsidy courtesy of NCASEF. Several department personnel from SEI will participate in our convention, including from Accounting, Maintenance, Asset Protection, Government Affairs, Franchising, Operations, Logistics, and Merchandising. The Accounting, Maintenance, and Asset Protection Departments will have booths during the trade show, while folks from SEI’s Merchandising Department will be available during the trade show. Additionally, folks from the Government Affairs and Accounting Departments will hold seminars during the convention.
This is schedule of events so far: August 7, Sunday—All Day Franchisee Welcome • Registration begins • Hors d’oeuvres and cocktails reception in the evening
August 8, Monday • Charity Golf Outing for franchisees and vendors benefitting Children’s Miracle Network Hospitals • D.C. bus tours for franchisees • Sunset River Cruise in the evening
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August 9, Tuesday • Breakfast • State of the Coalition Seminar • NCASEF Board and Committee Chairpersons • Seminars • Trade Show opens 11am to 4pm • Charity Auction Night / Awards • Guest Speaker / Dinner • Live Entertainment featuring Rick Gerber, the Anheuser-Bush Magic Guy
August 10, Wednesday • Breakfast • Seminars • Trade Show opens 11am to 4pm • Evening Cocktails • Raffle • Grand Banquet • Live Entertainment featuring Indian performing artist Yo Yo Honey Singh
CHARITY GOLF COMMITTEE
The first charity golf event benefitting Children’s Miracle Network Hospitals was held a day before NCASEF’s second quarter Board meeting at the TPC Scottsdale golf course, and it was very successful. The tournament was sold out. The next charity golf tournament goal is to double the participation and generate more funds for CMN Hospitals.
MEMBERSHIP COMMITTEE
The goal of the Membership Committee is to increase FOA and NCASEF membership by sending out a local non-member list to every FOA. Franchisees in remote areas will be assigned to the nearest FOA or join NCASEF directly as a Member at Large. Incentives will be given to FOAs to increase their membership percentage.
VENDOR RELATIONS & MERCHANDISE COMMITTEE
The goal is to develop a mutually beneficial relationship with vendor partners, as well as raise funds for NCASEF, Board meetings, the annual convention, and the general fund. Also, to drive gross profit by guiding suppliers to bring attractive deals and inform NCASEF membership.
FACILITY MAINTENANCE COMMITTEE
The Committee discussed a highlevel in-house maintenance program that is modeled after Speedway’s best practices. Speedway has been using this maintenance model for over 30 years. The program is rolling out slowly, and is designed to give franchisees better service at a lower cost. The intent of the program is to have a customer obsessed in-house maintenance team that is best in class, focused on supporting franchise stores and improving revenue generating equipment uptime, while focusing on savings and higher quality service to franchisees.
BYLAWS COMMITTEE
The purpose of the Bylaws Committee is to review and update the NCASEF bylaws as needed. Committee members did so before the second quarter meeting, redlined the changes they made and sent them to all the Board members along with a final draft. NCASEF General Counsel Eric Karp presented the changes made to Board members during the meeting. A motion was made to accept the bylaw changes, and the motion passed unanimously.
LOGISTICS/SIMPLIFICATION COMMITTEE
The purpose of this committee is to find solutions to overall franchisee and store issues, as well as develop store simplification processes. There is currently a Check-In Simplification process (SCIS) that is being introduced. Local teams are being developed that include district managers, Zone logistics managers and franchisee leadership to work together to resolve any issues that may arise. The committee will also help prepare stores for the change to SCIS and ensure stores are not taking any losses due to lack of training or distributor errors.
The benefits of SCIS include: • No AR Gaps • Time saving for both parties • Less dwell time • Each store treated as separate entity • Swell allowance (0.27 percent) for honor shortages belongs to individual store, and is used to cover shortage • Volume purchase incentive • No CAR • More accurate inventory
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SEI plans to develop Regional Distribution Centers (RDC), or inhouse distribution centers. Initially, one will be built in the mid-Atlantic region. The process will be similar to SCIS, but better with more deliveries and a CDC also included, a more robust assortment with better fill-rate, higher accuracy, timely delivery, less dwell time as sealed totes will be delivered, and time saving for the stores. The first RDC is likely to be launched in the fourth quarter.
STORE PROFITABILITY & FUEL COMMITTEE
The objective of the committee is
to elp franchisees grow their bottom lines with short-term and long-term solutions. The short-term goals include helping franchisees find local products that produce better margins, identifying SRP/CRP opportunities for each category, understanding the cigarette contract to ensure stores are on the right contract (CRP cigarette margin vs nonCRP), advocating for more fully funded promos and free fill deals, creating a worksheet to help franchisees develop a suitable product mix for their stores, and creating another worksheet to help franchisees calculate gross profit dollars and percentage, and obtaining lower prices for fuel island cleaning supplies like gloves and paper towels.
Potential long-term solutions the committee is working on and making suggestions to SEI to improve store profitability include: • A better gross profit split for franchisees—the Operational
Expense Model will help this conversation. • A higher gasoline commission. • Potentially remove or get a cap placed on expenses that have shifted to franchisees, like insurance, payroll, and advertising. • Lower cost of goods. • Food Service—Split/Cost accounting • CRP—If custom prices are lower than SRP then 7-Eleven should flag the system for franchisees to act. Make it simple to manage cigarette CRP. • Remove or lower credit card fees. • Make license fees a shared cost with SEI.
GOVERNMENT AFFAIRS/ COMMUNITY RELATIONS COMMITTEE
The committee provided an updateon several federal government policy moves and other legislative efforts. They started with the FDA menthol ban proposal, which targets menthol cigarettes and all flavored cigars. The FDA cannot and will not enforce against individual consumers for possession or use of menthol cigarettes or flavored cigars. Enforcement will only address manufacturers, distributors, wholesalers, importers and retailers who manufacture, distribute, or sell the products. The FDA will consider input from the public before finalizing the rule. The comment period opens May 4 and public listening sessions are scheduled for June 13 and June 15.
There are several legislative efforts underway to help address the labor shortage situation. One is retiree-focus legislation proposed by Rep. Jackie Walorksi, which provides relief from Social Security penalties for retirees returning to the workforce. AARP does not support this legislation.
Another possible solution is lifting the top and bottom age limits on the Earned Income Tax Credit (EITC). The Coalition of Franchisee Associations (CFA) is leading the charge on this bill introduction, in partnership with AARP and Golden State Opportunity, a nonprofit organization.
The committee encouraged FOAs and SEI to join several critical labor coalitions—Littler Group’s Workplace Policy Institute, the International Franchise Association (IFA), and Golden State Opportunity.
Other avenues worth looking into to resolve our labor issues include expanding the H2C visa program, lobbying lawmakers to create a Ukrainian workers program and a childcare tax credit, offering flexible schedules, savings incentives and tuition reimbursement to attract workers, and participating in the WOTC program.
Board members were encouraged to participate in CFA Day in Washington, D.C. so they can learn from industry experts on top legislative issues including unionization, labor shortage solutions, tax issues, and overtime regulations. Franchisees can also meet with their members of Congress to discuss these issues, network with franchisees from 23 different brands, and join members of Congress at the closing cocktail reception.
The committee recommended using research software that could alert NCASEF of legislation impacting our business. The software could provide breaking news, transcripts of discussion, and a calendar of significant dates. Franchisees can determine the keywords (tobacco, alcohol, convenience store,
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gasoline, vaping, etc.). The software will look for legislation at the local, state and federal levels. This will allow those franchisees impacted to respond quicker.
DIGITAL/IT COMMITTEE
These are the issues the Digital/IT Committee members have identified and are trying to resolve with SEI: • Gasoline integration: Dual POS is causing cash shortages. • Item Master issues: Items are made carried with zero retails. • SSI/NRI are being removed from the ISP. • Recommended items are being deleted. • Promo Master: Causing inaccurate MUMD Retail. • Extension of cost items: Such as fuel surcharge and store use sanitizer. • LDU issues: 6pk ringing up as singles. • Order blanking out at the transmission time. • 7NOW: LIE are being caused as the “I” not available to user on Market Place (Uber, etc.) and in turn stores are getting pressured
by local operations team. • 7MD: Doesn’t sync as often with the ISP, causing variable information. Examples: cycle counts CRP (> 15-minute updates).
These are some of the improvements the committee is seeking: • 7Track App: Franchisees with multiple stores should be able to log in using multiple IDs. • Promotion Participation: Simplify block multiple promos at one time. • 7Boss: Freezes for extended periods. • Help Desk: Extended hold times. • Provide backroom scanner. • PIN pad returns and late charges. Return process needs to be integrated. Scan at the store level or get a receipt at the store level. Better system to track the returns. • 7MD: On back order. 7MD needs trigger on all devices. • Network issues to log on secured site. 5G install. “Secondary drive may cause issues for network”—is there a solution for it? • Money Orders: KYA. How many years?
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from $44.38 billion last year, reported Progressive Grocer. The warehouse club said its U.S. and Canada membership renewal rate reached a record high of 92.3 percent, up 0.3 percent from the 12 weeks earlier at Q2 end. • Kroger held a nationwide hybrid online/in-person hiring event on April 30 with the goal of adding 23,000 associates across all departments— including retail, e-commerce, manufacturing, supply chain, merchandising, logistics, corporate, pharmacy and health care roles, reported Supermarket News. • Convenience retailer Casey’s announced that its Casey’s Rewards loyalty program recently surpassed 5 million members enrolled in just over two years since launching. The program provides millions of Casey’s guests across 16 states the ability to earn points on everyday purchases and redeem them for Casey’s Cash, fuel discounts, or a donation to a local school of their choice. • Amazon ranked first as the world’s biggest publicly traded retail company and landed in sixth place on Forbes’ Global 2000 list of public companies from all sectors, reported Forbes. Walmart is the second-largest retailer, and Alibaba, CVS and Home Depot round out the top five retailers on the list, which evaluates companies based on revenue, profit, market value and assets. • Apple plans to raise starting pay for its retail employees later this year to $22 per hour from $20, and new staffers in certain markets could earn a higher wage, reported the Wall Street Journal. The move comes amid rising inflation, a tight labor market and unionization pushes among hourly store employees. • EOS Linx, a provider of solar-supported electric vehicle chargers with data-driven digital advertising displays, has partnered with the Lone Star Business Association Cooperative (LSBAC) to expand its EV charging network at petro-convenience stores across Texas. LSBAC is a network of c-stores primarily centered in the Dallas-Fort Worth area and across North Central Texas, • Walmart is hoping to attract more college graduates with a College2Career program that fast-tracks new employees for store manager positions, reported the Wall Street Journal. Participants will receive classroom training, mentoring and real-world experience ahead of graduation, with some being awarded “emerging coach” management roles. • Alimentation Couche-Tard is planning to sell 109 Circle K and Couche-Tard sites in the United States and Canada, reported NACS Online. The sale includes 31 sites across three provinces in Canada and 78
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ValueAct Supports Seven & i Director Candidates
ValueAct Capital said it is backing Seven & i Holdings’ new director candidates for the board, and is urging the company to focus more on its 7-Eleven convenience store chain while applauding its moves to overhaul governance and strategy, reported Reuters. The U.S.-based investment firm, which has been pressing the board to take bolder action for months, made the comments in an update to other shareholders about the company’s decision to refresh its board and review its strategy.
ValueAct has long said if Seven & i narrows its focus to 7-Eleven, it could become a global champion in a growing industry. Recently, the firm praised the company for having confirmed a strategic review of its Sogo & Seibu department stores division, which suggests more focus will be placed on 7-Eleven. The firm also applauded plans to add six newcomers to the company’s board. It will have nine independent directors, up from five previously, and include five with non-Japanese backgrounds.
Investment Funds Bid For Seven & i’s Department Stores
Seven & i Holdings may be a step closer to finding a buyer for its struggling department store unit, reported NHK World-Japan. Sources said the company has received bids from three foreign investment funds to take over its Sogo & Seibu outlets. Two U.S. firms—Fortress Investment Group and Lone Star Funds—and Singaporean sovereign wealth fund GIC are vying for a majority stake. Seven & i executives will meet with the bidders to ask about their
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sites across 19 states in the U.S. Of the 109 sites, 61 properties sell fuel and 48 are convenience only. • Amazon is getting ready to open its first Amazon Fresh supermarkets in New York and New Jersey—one in a former Fairway Market site in Paramus, N.J., and another in a former Waldbaum’s supermarket location in Oceanside, N.Y., reported Supermarket News. • Alimentation Couche-Tard Inc. has begun deployment of Circle K electric vehicle fast chargers in the U.S. The company plans to bring EV charging units to 200 Circle K and Couche-Tard stores across North America over the next two years. • Mastercard is testing biometric options in which in-person payments can be completed with a smile or wave of the hand, using a face or fingerprint to make checkout more streamlined. Mastercard said its new Biometric Checkout Program outlines a set of standards that banks, merchants and technology providers adhere to, helping to ensure the security and privacy of personal data. • From February 2020 through February 2022, digital and non-digital carry-out restaurant orders declined by 2 percent, while delivery increased by 116 percent and drive-thru grew by 20 percent, according to a new study by The NPD Group. Digital ordering, which grew by 117 percent in the two years, contributed to the delivery and drive-thru growth. • Mondelez International plans to divest its developed market gum and global Halls businesses following a strategic review of its portfolio, reported Food Business News. No timeline was given for the divestments. Brands included in the developed market gum portfolio include Dentyne, Stride, Trident and others. • Kraft Heinz recently announced that it is teaming up with Pulpex to develop a paper-based, renewable and recyclable bottle made from 100 percent sustainably sourced wood pulp. • Walmart is expanding its drone delivery experiment with partner DroneUp to select delivery areas in six states, with the potential to provide the unmanned delivery service to about 4 million U.S. households by the end of the year, reported Axios. Online shoppers will pay a $3.99 fee per order and there’s a weight limit of 10 pounds on each order fulfilled by the service. • Grocery chain Kroger is expanding its Boost membership program—which it launched as a pilot in November—nationally to help price-conscious shoppers amid high inflation rates, reported Progressive Grocer. Boost offers customers two different membership levels and includes benefits such as 2X fuel points, extra savings on Kroger’s private brands and free two-hour or next-day delivery. • Growth Energy recently announced that drivers across the U.S. have logged 30 billion miles on the road using E15, a fifteen percent ethanol blend, commonly known as Un-
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business plans for the subsidiary before making a decision. Sogo & Seibu has 10 outlets, mostly in Tokyo and surrounding areas. The company has logged net losses for the past three years due to growth in online competition and the coronavirus pandemic.
Inflation Pushing Shoppers To Dollar Stores
Record-high gas prices and the fastest growth in inflation in 40 years are pushing struggling Americans to rely more heavily on dollar stores and prompting other shoppers to visit them for the first time, reported CNN Business. Although some economic indicators remain strong and wages are rising at their fastest pace in decades, inflation has surged, with the Consumer Price Index rising by 8.3 percent in the 12 months ending in April. This means the cost of essentials is eating away at workers’ bigger paychecks.
Since the Great Recession in 2008, three dollar chains have grown faster than nearly any other retailers, adding thousands of new stores, often in underserved areas. They’ve also widened their product selection to lure customers away from pharmacies, convenience stores and supermarkets. Dollar General, the largest U.S. dollar store chain, plans to add more $1 items as well as lower-priced, private-label brands to its shelves, the better to appeal to cashstrapped shoppers. Dollar Tree, which also owns Family Dollar, said that customers stressed with higher rent, gas, heating and food bills are increasingly turning to its stores.
Philip Morris Makes Bid To Acquire Swedish Match
Marlboro-maker Philip Morris International recently confirmed a $16 billion bid to buy rival Swedish Match as part of its accelerated push into smoke-free tobacco alternatives, reported CNBC. The deal, which is now subject to shareholder approval, marks the latest phase in Philip Morris International’s ongoing efforts to reduce its reliance on traditional cigarettes amid growing public scrutiny.
Swedish Match has seen rapid growth in
recent years of its newer, tobacco-free nicotine pouches, Zyn, amid increasing consumer demand for cigarette alternatives. In first-quarter earnings, Swedish Match reported a significant uptick in sales and profits from Zyn in the U.S., with deliveries up 35 percent. The U.S. now accounts for Swedish Match’s largest market after Scandinavia, and its Zyn pouches dominate in a market flooded by rivals including British American Tobacco PLC and Altria Group, from which Philip Morris International spun off in 2008.
National Gas Price Average Could Reach $6
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mid-May, and analysts at JPMorgan warned that price could be the national average before the end of the summer, reported CNN Business. The startling forecast came as U.S. gas prices surged to record highs in the aftermath of Russia’s invasion of Ukraine, casting a shadow over the economy. With U.S. gasoline inventories sitting at their lowest seasonal levels since 2019, JPMorgan is concerned it will be difficult to satisfy intense demand during this summer’s driving season. “With expectations of strong driving demand...U.S. retail price could surge another 37 percent by August,” JPMorgan wrote in its report, titled “Cruel Summer.”
Couche-Tard & EG Group In Talks To Merge
Two of the world’s biggest convenience-store chains are discussing a deal that would combine BP gas stations, roadside Starbucks, Circle K minimarts and Cumberland Farms grocery stores, among a handful of other retail brands, reported the Wall Street Journal. Alimentation Couche-Tard Inc., which runs 7,000 convenience stores in the U.S. and as many abroad, and British retailer EG Group have traded proposals recently that would value EG at roughly $16 billion or more including debt. Should the companies combine, the new group would have over $70 billion in annual revenue and some 21,000 fast-food joints, gas stations and grocery stores in more than 30 countries.
It would bring together EG’s network in the U.K., Western Europe and Australia with Couche-Tard’s in the U.S., Canada, Northern Europe and a smattering of other countries. The combined company would remain headquartered in CoucheTard’s home of Laval, Quebec, a Montreal suburb, should the deal go through.
New Amazon Go Suburban Format With Made-To-Order Kitchen
Amazon is expanding its Amazon Go checkout-free convenience store concept with a new format for suburban locations that features a made-to-order kitchen offering nearly 30 freshly prepared, customizable breakfast and lunch items, reported Chain Store Age. The new format, which is still called Amazon Go, is now open in Mill Creek, Washington and measures approximately 6,150 square feet overall.
The new Amazon Go utilizes Amazon’s “Just Walk Out” technology and offers an
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Avanti Is Your Magazine
Avanti Magazine was created in 1981 by franchisees, for franchisees. It represents your voice within the 7-Eleven universe and requires your participation to remain relevant to the ideas, information, and knowl-edge floating about the franchisee community. You can contribute to the success of Avanti Magazine by submitting any of the following:
> Articles on any 7-Eleven topic that may be of interest to other franchisees. > Your FOA events and Board meeting calendars. > FOA event photos with a short description (who, what, where, when, and why). > Store or community event photos with captions. > Any combination of the above.
Please send your submissions to avantimag@ncasef.com.
As former National Coalition Chairman Bill Schuessler famously said, “None of us is as great as all of us together, so let’s stay tightly knit together.”
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leaded 88. • A majority of the states that legalized marijuana for recreational use are collecting more tax revenue from pot sales than alcohol sales, reported The Center Square. Across the country, the total revenue for taxes on recreational marijuana amounted to nearly $3 billion, according to a report by The Institute on Taxation and Economic Policy (ITEP). • C-store chain Kwik Trip has partnered with Coinsource to roll out new Bitcoin ATMs in over 800 Kwik Trip locations in Wisconsin, Minnesota, Illinois and Iowa. • Several IKEA stores in the U.S. will start selling solar panels and installation services this fall in collaboration with California-based SunPower, reported CNN Business. The products and services will be sold under the “Home Solar” line, which will be available to IKEA Family loyalty program members. • Ultrafast grocery delivery startup Food Rocket is planning to open a fulfillment center in Chicago this summer that will be co-located with a new Circle K convenience store and offer 15-minute delivery of products sold by both retailers, reported Grocery Dive. • Pilot Company held a Hiring Day event on May 3 at its Pilot Flying J travel centers, One9 Fuel Network locations, and on-premises fast food restaurants with the aim of employing 10,000 new team members to prepare for the summer travel season. Part-time and full-time team members receive company perks and benefits, including a fuel discount and free meals, the company said.
High Gas Prices Affecting C-Store Sales
High gas prices are taking their toll on sales at convenience stores, with 59 percent of retailers saying their customer traffic has decreased in stores over the past three months, according to the results of a new survey released by NACS. Convenience stores, which sell an estimated 80% of the fuel purchased in the U.S., rely on in-store sales, not fuel sales, to drive profits. But high gas prices are hurting customer traffic in stores and “basket” size: Nearly half of all retailers (49 percent) also said that those customers coming inside the store are buying less compared to three months ago when gas prices were $1.50 a gallon lower.
In addition, retailers expressed concerns that elevated gas prices could also depress sales over the traditionally busy summer-drive season: 53 percent said they expect sales to be lower this summer than last summer, with only 25 percent anticipating increased sales.
Convenience retailers say they are looking to reduce expenses, chief among them credit card fees, which average more than 10 cents per gallon, and pass along savings to price-conscious customers. More than 1 in 4 (29 percent) of retailers surveyed said they are offering cash discounts at the pump, and 31 percent are offering discounts for those who pay by app.
Eastern Virginia FOA Holds Successful Charity Golf Outing & Trade Show!
It was a grand slam for the Eastern Virginia FOA as the group held two highly successful back-toback events. First up was its Annual Charity Golf Tournament, held on April 13 at the Sleepy Hole Golf Course in Suffolk, Virginia with more than 80 players that included franchisees and vendors. This was followed by the EVFOA Trade Show on April 14, held at the Hampton Roads Convention Center in Hampton, Virginia and featuring over 55 vendor exhibitors and 175 franchisee participants.
The trade show was inaugurated by SEI’s Zone Vice President Alex Kelly and Hampton City Mayor Donnie Tuck. NCASEF Executive Vice Chairman Joe Rossi was also in attendance. During the trade show, the EVFOA donated $10,000 to the American Red Cross Ukraine Humanitarian Crisis Fund. The group also donated $1,000 to the Hampton/Newport News/Norfolk/ Virginia Beach/Suffolk cities police department, and another $1,000 to the Women’s Empowerment charity ran by Newport News Vice Mayor Tina Vick.
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expanded selection of grab-and-go food and beverage items, including a broader range of beer and wine, and everyday essential items. Further store amenities include packageless returns and two “New York has become the Standard Level 2 Volta electric vehicle charging stations that are free for customers to use. latest state to suspend its gas tax in an effort to give drivers some relief at the pump.”
New York Suspends Gas Tax
As gas prices remain near record highs, New York has become the latest state to suspend its gas tax in an effort to give drivers some relief at the pump, reported CBS News. The suspension of the 16-cents-per-gallon tax runs through the end of the year. The national average for a gallon of gas hit $4.955 for regular unleaded gas on June 8, according to tracking by AAA. The climbing prices come as millions of Americans are set to hit
the road on vacations over the summer for the first time in a couple of years after travel plunged during the coronavirus pandemic.
The Biden administration at the end of March announced the release of one million barrels of crude oil from the Strategic Petroleum Reserve per day for the next six months to help serve as what the White House called a bridge as production ramps up. It comes after a release of 30 million barrels in early March and 50 million barrels last fall. The Tax Foundation said while suspending state gas taxes could reduce prices, it was not the most efficient tax relief, calling it “good politics than good policy.” Other states that have suspended gas taxes include Connecticut, Georgia, and Maryland. A growing number of other states have also proposed and
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Legislative Update
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partment of Health. The new rule takes effect November 1.
Effort To Allow Oregon Grocery Store Liquor Sales Stalled
The group backing a proposed ballot measure to privatize liquor sales in Oregon—allowing for sales in local grocery stores—has pulled the plug on the initiative, reported OPB.org. Proponents of Initiative Petition 35 said the pandemic and court delays in getting their measure certified by the state elections division posed too great a challenge to make the November 2022 ballot. Amanda Dalton, president and CEO of the Northwest Grocery Association, said that despite the setback, her group remains committed to changing Oregon law to allow liquor to be sold in grocery stores. Currently in Oregon, liquor must be purchased at stores operated by independent contractors overseen by the state’s retail services division of the Oregon Liquor and Cannabis Commission.
New Jersey Considers Liquor License Reform
Assembly lawmakers to expand the availability of liquor licenses or keep reforms to a minimum as legislators began the state’s latest push to loosen its liquor laws, re-
ported the New Jersey Monitor. Advocates for liquor stores, convenience stores, grocers, and distilleries alternatively urged members of the Assembly’s oversight and reform committee to keep alcohol sales to retailers, expand them to new venues, and broaden the availability or affordability of licenses, all while maintaining value for existing license holders.
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moved forward with measures to suspend gas taxes, such as Michigan and Florida.
C-Stores Enter A ‘New Normal’ Of Digital Ordering
Digital orders have risen to one-third (33 percent) of total convenience store and restaurant food orders, up from just 12 percent pre-pandemic, according to a new report by Paytronix Systems. While in-store sales remain down by nearly half, digital orders have remained elevated at 113 percent of pre-pandemic levels, the report states.
Other findings in the Paytronix Order & Delivery Report 2022 include: • Rise in Takeout Orders: While delivery was king before and during the height of the pandemic, more recent data indicates that takeout orders now dominate digital orders, with numbers even higher than they were pre-pandemic. Takeout jumped from approximately 35 percent of orders in January 2020 to 55 percent in March of 2022, a trend that appears to be increasing. • Delivery Customers are Different: For much of 2021, the average delivery tip was 12.5 percent of the subtotal, more than double takeout order tips. 2021 takeout orders included a tip just 37 percent of the time compared to nearly 73 percent of delivery orders. Delivery customers are also more loyal, with 31 percent of orders coming from repeat customers.
Labor Costs Surge Most Ever
U.S. employment costs jumped by the most on record at the start of the year, heightening concerns about persistent inflation that set the stage for more forceful policy action by the Federal Reserve, reported Bloomberg. The employment cost index (ECI), a broad gauge of wages and benefits, increased 1.4 percent in the first quarter, according to Labor Department figures. That was the largest increase in comparable data back to the early 2000s and followed a 1 percent increase seen in the final months of 2021. Compared with a year earlier, the labor costs measure jumped 4.5 percent, the most in more than
two decades. Unlike the earnings measures in the monthly jobs report, the ECI is not distorted by employment shifts among occupations or industries, the article states.
The stretch of increasing employment costs underscores how rising wages are a key part of the inflationary picture, and if sustained, will keep pressure on the Fed to take a more aggressive approach to policy. Even so, workers’ wages aren’t keeping pace with decades-high inflation, squeezing households and threatening to slow consumption.
From toilet paper to yogurt and coffee to corn chips, manufacturers are quietly shrinking package sizes without lowering prices—it’s been dubbed “shrinkflation”— and it’s accelerating worldwide, reported the Associated Press. Shrinkflation isn’t new, but it proliferates in times of high inflation as companies grapple with rising costs for ingredients, packaging, labor and transportation. Global consumer price inflation was up an estimated 7 percent in May, a pace that will likely continue through September, according to S&P Global.
Consumer advocate Edgar Dworsky said shrinkflation appeals to manufacturers because they know customers will notice price increases but won’t keep track of net weights or small details, like the number of sheets on a roll of toilet paper. Companies can also employ tricks to draw attention away from downsizing, like marking smaller packages with bright new labels that draw shoppers’ eyes. Sometimes the trend can reverse. As inflation eases, competition might force manufacturers to lower their prices or reintroduce larger packages. But Dworsky said once a product has gotten smaller, it often stays that way.
Couche-Tard Rolling Out ‘Smart Checkout’
Alimentation Couche-Tard Inc. recently announced it will deploy more than 10,000 Mashgin Touchless Checkout Systems branded as “Smart Checkout” to over 7,000 of its Circle K and Couche-Tard stores during the next three years. The company said the AI-powered self-checkout system developed by Mashgin will improve customer checkout times as much as 400 percent, driving customer experience forward while allowing store staff to focus their time on helping customers.
Referred to as “Smart Checkout” in Circle K and Couche-Tard stores, the Mashgin
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Touchless Checkout System is a compact countertop device that fits easily into the existing store layout. It uses computer vision to
recognize items presented from virtually any angle and instantly ring them up in a single transaction. There is no need to download an app or find and scan barcodes; shoppers simply put items down, pay as they normally would, and are on their way in as little as 10 seconds—eight times faster than traditional self-checkout.
High Electric Bills To Affect Consumers & Businesses
Many Americans are being hit by rapidly rising electricity bills, compounding inflation’s financial toll on people and businesses, reported the New York Times. The national average residential electricity rate was up 8 percent in January from a year earlier, the biggest annual increase in more than a decade. The latest figures, from February, show an almost 4 percent annual rise, reaching the highest level for that month and approaching summer rates, which are generally the most expensive.
In Florida, Hawaii, Illinois and New York, rates are up about 15 percent, according to the Energy Department’s latest figures. Combined with a seasonal increase in the use of electricity as people turn on air-conditioners, the higher rates will leave many people paying a lot more for power this summer than they did last year. The immediate reason for the jump in electric rates is that the war in Ukraine has driven up the already high cost of natural gas, which is burned to produce about 40 percent of America’s electricity. Additionally, supply chain chaos has made routine grid maintenance and upgrades more expensive.
Number Of Temporary Worker Visas Increased
The Department of Homeland Security (DHS) and the Department of Labor (DOL) recently announced the availability of an additional 35,000 H-2B temporary worker visas during the second half of fiscal year (FY) 2022. These visas are for U.S. employers seeking to employ additional workers on or after April 1, 2022, through Sept. 30, 2022. “These additional H-2B visas will help employers meet the demand for seasonal workers at this most critical time, when there is a serious labor shortage,” said Secretary Alejandro N. Mayorkas.
The supplemental H-2B visa allocation consists of 23,500 visas available to returning workers who received an H-2B visa or were otherwise granted H-2B status during one of the last three fiscal years. The remaining 11,500 visas are reserved for nationals of El Salvador, Guatemala, Honduras, and Haiti, regardless of whether they are returning workers. The semiannual cap of 33,000 visas for the second half of FY 2022 was reached on February 25, 2022, according to the DHS.
SEI Sued Over Facial Recognition Tech
SEI has become a target of a class action lawsuit under Illinois’ biometrics privacy law, now accused of improperly using facial recognition technology to scan and remember the faces of people entering their stores without their knowledge and consent, reported the Cook County Record. The lawsuit centers on 7-Eleven’s alleged use of facial recognition surveillance technology from New York-based Clickit. The plaintiffs assert the use of the Clickit facial recognition tech allegedly violates the Illinois Biometric Information Privacy Act’s notice and consent provisions, because customers are not notified of the video surveillance face scans, nor given the opportunity to consent to any alleged scans.
The Illinois BIPA law has been used by a growing cadre of plaintiffs’ lawyers in recent years to launch a blitz of thousands of class action lawsuits against businesses of many types and sizes. The lawsuits typically accuse companies of violating three main provisions within the BIPA law, requiring companies to obtain written consent and provide certain notices and information before collecting biometric data, including fingerprints, retinal scans and facial geometry. The class actions, however, are mainly fueled
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by the ability of plaintiffs to level demands for potentially massive demands for money from defendants. The BIPA law allows plaintiffs to demand damages of $1,000 to $5,000 per violation.
Benefits May Be Key To Retaining Employees Seven-Eleven Japan Franchisees Not Allowed To Bargain Collectively
As millions of U.S. employees voluntarily resign and employers desperately scramble to find workers, a new survey by Quest Diagnostics suggests employee health strategy may be a key ingredient to keeping employees well and at work. Among employees thinking about changing jobs, better benefits in general (38 percent), better healthcare benefits specifically (36 percent), as well as work/life balance (36 percent), were three of the top four reasons employees were considering the change. More money was the top reason, at 50 percent.
The report, “2022 Health at Work,” further reveals that two-thirds of employees (66 percent) say they are thinking about changing jobs next year or have begun or recently completed a job change. More than 3 in 4 (78 percent) of human resources leaders say their organization has been impacted by the “Great Resignation,” and 90 percent believe they will have to improve benefit packages and increase wages. And yet, over seven in ten (72 percent) HREs surveyed also say it is likely there will be a recession that will impact hiring in the next year. The Tokyo District Court ruled on June 6 that a group of Seven-Eleven Japan franchisees do not have the right to bargain collectively with the chain operator, reported
“Better benefits in general (38 percent) and better healthcare benefits specifically (36 percent) were two of the top four reasons employees were considering changing jobs.” The Mainichi. The ruling, which stated that “store owners are not deemed workers under the Labor Union Act,” is believed to be the first judicial decision in Japan regarding the collective bargaining rights of convenience store owners. The Conbini Kameiten Union filed the lawsuit, claiming that the right to collective bargaining is necessary to improve the franchisees’ working conditions, as well as the stores’ business management. The executive chairman of Conbini Kameiten Union said the group intends to file an appeal.
Illinois’ Gas Tax Sign Requirement
From July 1 until December 31, 2022, all gas stations in Illinois will have to display a sign with specific language about the sixmonth gas tax suspension, reported News Channel 20. If gas station owners don’t comply, they could face fines of $500 per day. According to numbers from the National Association of Convenience Stores, this could
impact thousands of gas stations since there are 3,708 convenience stores selling gas in Illinois. The Illinois Fuel and Retail Association said their board voted to sue the state.
Governor JB Pritzker used a law passed in 2000 to suspend the five-percent state sales tax on motor fuel and gasohol for a period of six months in order to give Illinois drivers relief from rising gas prices. Under that law, retailers are required to post a notice on each pump stating the price on the pumps should reflect the tax reduction.
NOTICE!
QSRs Ramp Up Breakfast Deals
As more employees return to the office— and their daily commutes—QSR chains are ramping up promotions and loyalty programs in a move to make fast-food breakfast a part of workers’ morning routines, reported NBC News. McMuffins, Baconators and an array of coffee concoctions and donuts helped fuel $35 billion in fast-food breakfast sales in 2020, according to research from Credit Suisse. Researchers also found that breakfast drives more repeat business than any other part of the day. Even as millions of workers continued to work remotely and children were only partly back to in-person school, customer traffic at fast-food restau-
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rants was up by 11 percent in 2021. To keep things moving, a lot of the bigger fast-food chains have invested in technology that can reduce wait times at the drive-thru. They’ve also stepped up rewards programs and special deals for customers who download their apps, which have become key promotional tools. McDonald’s, for instance, offers coffee, hot or iced, any size, for 99 cents. But it must be ordered through the app. Branded apps not only increase efficiency by allowing customers to order ahead, they also produce a steady stream of data that makes it easy for restaurants to feed them a steady stream of targeted promotions. Smaller players, such as Taco Bell and convenience stores, including 7-Eleven and Wawa, are also looking to carve out a bigger piece of the breakfast market by offering low-cost breakfast sandwiches, two-for-one deals and discounts on coffee.
Employers Giving Workers Gas Money
Rising gasoline prices are prompting more companies to offer fuel stipends, gift cards and other benefits, including continued work-from-home privileges, as they try to retain employees, reported the Wall Street Journal. Though some executives are starting to worry a recession could be looming, several said making commutes affordable is essential as workers continue to quit jobs and it remains challenging to fill vacant positions. Employers say the perks are critical to keeping their businesses open as employees grumble about rising gas prices and office return plans. The national average price for a gallon of gasoline recently topped $5, coinciding with U.S. office occupancy in major cities hitting 44 percent in mid-June, its highest level since the pandemic began. Employers say a lot of office chatter revolves around surging household costs.
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Legislative Update
New Jersey laws enacted after the end of Prohibition limit the number of available liquor licenses to a town’s population. For every 3,000 residents, a municipality can issue a single license. Those rules, long targets of reformers who argue the strict license limits have slowed economic growth in the state, keep demand for licenses high and push their prices even higher.
Styrofoam Cups & Plates Banned In New Jersey
It’s not just plastic and paper bags that went away when New Jersey’s single-use plastic bag ban kicked in on May 4, Styrofoam products—including cups, plates, and to-go containers—went to the wayside too, reported NJ.com. Convenience stores, restaurants and other food service businesses cannot hand food out in Styrofoam containers and stores are not able to sell Styrofoam products under the ban. Unlike the paper bag restrictions that do have some exceptions for stores depending on size, the Styrofoam ban is sweeping and applies to every establishment and entity the same. The single-use plastic bag ban, signed into law by Governor Phil Murphy on November 4, 2020, is considered the strictest in the nation because of its Styrofoam ban and paper bag limitations.
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