Avanti September/October 2019

September/October 2019

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

Moving Forward My Two Years As NCASEF Chairman

How strong is the bond between franchisor & franchisees?

We Are Not Renters!

Elected Not Selected: The Key To Franchisee/Franchisor Relations Taking Responsibility: Seven-Eleven Japan

Save The Date!

NCASEF 2020 CONVENTION Gaylord National Resort & Convention Center National Harbor, Maryland August 10-13, 2020

PRSRT STD U.S. POSTAGE PAID Philadelphia, PA PERMIT No. 5634

THE VOIC E OF 7-ELEVEN FRANC H ISEES

September/October 2019

Contents 23 My Two Years As NCASEF Chairman

By Jay Singh, Chairman, NCASEF

16 Midwest FOA Supports Breast Cancer Awareness Month With Pink Out Slurpee

By Güliz Sönmez, Midwest FOA

HIGHLIGHTS

71 Big Crowds At The Delaware Valley FOA Trade Show

Page 50

27 Elected Not Selected: The Key To Franchisee/Franchisor Relations

By Michael Jorgensen, Executive Vice Chair

31 Taking Responsibility: Seven-Eleven Japan

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

By Vincent Emmanuel

DELAWARE FRANCHISEE CONQUERS MOUNT EVEREST Page 59

FRANCHISEES CELEBRATE 32ND ANNIVERSARY BY HONORING CUSTOMERS Page 56

35 We Are Not Renters!

By Serge Haitayan, President, Sierra FOA

Former President, UFOLINY

43 The Issues On Our Minds

By Hari Patel, President, Metro NJ FOA, NCASEF Board Member

47 Q&A: Workers’ Compensation Insurance

TM

EN

Member News.....................12 Bits & Pieces.......................14 Legislative Update....................20 SEI News...........................................72 Vendor Focus....................76 Franchisee Calendars........78

PA R DE

By Jack W. Rugen, Editor, Soundwave Magazine,

TS

37 Can We Regain The Prominence In The Coffee Marketplace?

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

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

9

NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES

NCASEF Officers Meet With Japanese 7-Eleven Owners Members of the NCASEF executive board recently flew to Tokyo for a series of meetings with Japanese franchise owners who are pressing for a change to the 24/7 convenience store culture as they face shrinking profits and corporate leadership that has demonstrated an unwillingness to engage in substantive communication, the NCASEF announced.

“Our association has maintained communication with several leading Japanese franchisees over the past couple of years and they invited us to Tokyo so we can share information and ideas. 7-Eleven operators in the U.S. are struggling with many of the same issues,” said Executive Vice Chairman Michael Jorgensen, who was joined by Vice Chairman Rehan Hashmi and

Treasurer Jaspreet Dhillon. “Like us, they love the brand but are frustrated with their situation.”

“By strengthening our alliance with Japanese franchisees, we are sending a message to 7-Eleven that they can’t ignore us,” said Dhillon. “At the end of the day, we want the same thing. We want the 7Eleven brand to be successful and we want to be personally successful. We need to work together to make that happen.”

NATIONAL OFFICERS

Jatinder Singh NATIONAL CHAIRMAN

702-249-3301 • jays@ncasef.com

Michael Jorgensen EXECUTIVE VICE CHAIRMAN

347-251-1828 • mcjorg@yahoo.com

Paul Lobana VICE CHAIRMAN

818-203-2527 • paullobana@aol.com

Rehan Hashmi VICE CHAIRMAN

NCASEF: ‘Franchisees Are Leaving The System’

In a recent press release, the NCASEF stated that as SEI continues to ignore requests from franchise owners to create a more transparent relationship, franchisees are leaving the system, including in major markets like Los Angeles and New York. “It seems clear 7-Eleven’s leadership in Dallas and Tokyo are not interested in the best interests of franchise owners. We continue to see the company taking steps that benefit NCASEF officers Jas Dhillon, Rehan Hashmi, and Michael Jorgensen, with moderator its income stateAndrew Horvat at the Foreign Correspondents’ Club of Japan in Marunouchi, Tokyo. continued on page 14

847-845-8477 • rehan711@yahoo.com

Ajinder Handa VICE CHAIRMAN

425-438-8381 • ajinderhanda@hotmail.com

Jaspreet Dhillon TREASURER

310-892-2106 • jaspakam@gmail.com

Eric H. Karp, Esq. GENERAL COUNSEL

617-423-7250 • ekarp@wkwrlaw.com

John Riggio MEETING/TRADE SHOW COORDINATOR

262-275-3086 • jrpinc@charter.net

Sheldon Smith AVANTI PUBLISHER ADVERTISING MANAGER

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

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

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

12

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

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

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

The Voice of 7-Eleven Franchisees September/October 2019 © 2019 National Coalition of Associations of 7-Eleven Franchisees Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.

continued from page 12

ment and balance sheet without consideration for store-level prof“Eighteen percent of 7-Eleven its,” said NCASEF Chairman Jay stores in the U.S. are curSingh. “As a result franchisees are rently available for franchisleaving the system and replacements are hard to find.” ing. Since April 2018, the The NCASEF offered the number of available stores following points based on pubhas increased more than 57 licly available franchising data percent, from 999 to 1,578.” from SEI: • Eighteen percent of 7-Eleven stores in the U.S. are currently ment in the last 12 months and continavailable for franchising. ued robust interest from entrepreneurs • Since April 2018, the number of availlooking to franchise with this system.” able stores has increased more than 57 percent, from 999 to 1,578.

• Since April 2018, stores currently owned by a franchisee and put up for sale (known as goodwill stores) have increased more than 95 percent in Califor7-Eleven parent company Seven & nia; 39 percent in New York; 314 percent i Holdings looks to have secured record in Illinois; 84 percent in Virginia and 60 operating profit for the six months endpercent in Washington State. ing August, reported Nikkei Asian Re• Completed sales of franchised stores view. The 1 percent growth in operating more than quadrupled from 2013 to 2018. profit to about 200 billion yen ($1.8 bil• Turnover of franchised stores due to lion) comes as a relief to the company terminations, non-renewals and abanand its investors donments doubled from 150 in 2013 to after the disastrous 314 in 2018. debut of its 7Pay The National Coalition stated it mobile payment believes a change in corporate leadplatform in July, ership, starting at the top, will help which was quickly make 7-Eleven stores more aphacked and pealing to new and existing franforced the group chisees. In a statement to CSP to discontinue Daily News, SEI responded, “During the the service a month after its launch. past 10 years, the 7-Eleven brand has Having to pay out higher wages to generated over $15 billion in earnings secure staff amid a labor shortage, the for franchisees across the country. In group trimmed down its cost structure, fact, average franchisee gross income is particularly in advertisements. Any money left over was spent refurbishing at an all-time high. The opportunity existing stores that were experiencing with the brand is tremendous, as atslower growth. The cost cutting looks to tested by the 4,700 franchisees that signed a new 15-year franchise agreecontinued on page 16

Seven & I Reports Record Earnings

14

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

7-Eleven Canada recently launched its Beyond Meat Pizza, packed with 100 percent plant-based Italian Sausage Crumbles. The Beyond Sausage and Roasted Veggie Pizza is now available in select Urban Toronto 7Eleven locations. • Walmart will stop selling e-cigarettes in its U.S. stores, citing “growing federal, state and local regulatory complexity and uncertainty” around the products, reported CNBC. • In an effort to remain competitive and attract top talent, Sheetz plans to invest $16.8 million to raise wages for its 20,000-plus person workforce in locations across six states, reported PhillyVoice.com. • Seven-Eleven Japan has teamed with Rakuten, Inc. to introduce the Rakuten Pay smartphone app payment service to 7-Eleven convenience stores around Japan, reported Japan Today. Rakuten Pay allows registered members to easily make payments with credit cards, etc. registered to their Rakuten account by simply by having the barcode displayed on the app scanned by a staff member at the cash register. • Kellogg and Hormel will soon launch their own plant-based meat product lines to compete with Beyond Meat and Impossible Foods, reported CNBC. Kellogg’s product line is called Incogmeato and will be produced by its Morningstar Farms brand, while Hormel’s new brand will be called Happy Little Plants, and will be housed under its Cultivated Foods umbrella. • Amazon is in talks to bring the cashierless technology that runs its Go stores to other retailers like airport shops and movie theaters, reported CNBC. The move would help Amazon diversify beyond online retail without relying only on building its own stores, according to the article. • Pennsylvania convenience chain Rutter’s recently became the first in the state continued on page 18

continued from page 14

MIDWEST FOA SUPPORTS BREAST CANCER AWARENESS MONTH WITH PINK OUT SLURPEE

By Güliz Sönmez October was Breast Cancer Awareness Month and in honor of the occasion we were happy to support Pink Out Slurpee! At the Michigan Sales Rally meeting on August 27th, Midwest FOA Vice President Nisar Siddiqui presented Patty Miller, franchisee, MWFOA member and Pink Out Slurpee founder, with a check for $2,711 for the National Breast Cancer Foundation. There was an entire room decorated for the Pink Out Slurpee initiative. Three markets in the Heartland Zone had Pink Out Slurpee translites, sold “Pink Slurpee” flavor Jolly Rancher Watermelon, plus collected donations for NBCF. Pink Out Slurpee passed out over 900 tshirts to franchisees and friends who donated to the cause. A big Thank You to both the MWFOA and Monster Energy for donating to NBCF and Pink Out Slurpee. If you would like more information on how you can support, please contact the MWFOA office at office@midwestfoa.com. have worked. This will mark the seventh consecutive year of operating profit growth for Seven & I, the article states. Additionally, the hot August weather in Japan helped sales of cold noodles and beverages. In the U.S., convenience store sales grew thanks to growth in foods such as pizza. The stronger dollar and the weaker yen also benefited the Tokyo-based group.

Seven & i Cutting Jobs & Closing Stores Seven & i Holdings Co. plans to close 1,000 unprofitable Japan 7-Elevens and eliminate 3,000 jobs from its other units as the Japanese retailer continues its structural reform and cuts back on 24hour operations, reported Bloomberg.

The company said it will implement new 16

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Franchisees, their friends and customers, and Monster Energy raised $2,711 for the National Breast Cancer Foundation, largely through the efforts of Pink Out Slurpee, founded by franchisee Patty Miller.

policies for its franchisees, such as reducing monthly fees. It will also close five Seibu and Sogo department stores, and is considering closing 33 Ito-Yokado general-merchandise shops. Seven & i’s 7-Eleven Japan business will take a 10

“Seven & i said it will implement new policies for franchisees in Japan, such as reducing monthly fees.” billion yen ($93 million) charge due to the new incentives for the franchisees, the article states, and the company said a new mid-term plan will be announced next April.

According to the article, Seven & I has been pressured in a saturated do-

mestic market, where growth has been limited to taking share from competitors. It’s also been under fire in the past year for enforcing a 24-hour operation on its franchisees amid a labor crunch in Japan. It is now testing stores with reduced hours.

7-Eleven Named ‘Innovator Of The Year’ 7-Eleven was recently selected the Cold & Frozen Beverages Innovator of the Year in Convenience Store News’ eighth-annual Foodservice Innovators Awards program, reported CSNews Online. Foodservice Innovators Awards winners are chosen by Convenience Store News’ Foodservice Advisory Council—a panel of foodservice experts from the retailer, supplier, wholecontinued on page 18

continued from page 16

saler, research and consulting fields.

Winners are recognized for raising the bar on quality, service and innovation in the fast-growing and critically important foodservice category in the convenience channel. One judge stated, “7-Eleven owns the frozen drink category and still does the best LTOs.”

7-Eleven One Of The Largest Grocery Chains In The World 7-Eleven is the third largest grocery chain in the world by net sales, reported Business Insider. The ranking was compiled by e-commerce insights firm Edge

by Ascential, as part of its July 2019 report on the state of the business. The company calculated its estimates on instore and online net sales for 2019 based on its database, Retail Market Monitor, which analyzes 2,500 retailers globally.

The report also provided forward-looking estimates for in-store and, when applicable, online sales for 2024.

7-Eleven is ranked No. 3 with instore net sales for 2019 of $120 billion and estimated in-store net sales for 2024 of $168 billion. Walmart is ranked No. 1 (in-store net sales for 2019: $503 billion; estimated in-store net sales for 2024: $568 billion). Costco comes in at No. 2 (in-store net sales for 2019: $151 billion; estimated in-store net sales for 2024: $120 billion).

7-Eleven #2 Among Top Franchise Systems 7-Eleven has taken the #2 spot on the Franchise Times Top 200+ list, an annual ranking of the 500 largest franchise systems in the United States by global system-wide sales, based on the previous year’s performance. According to the Franchise Times, 7-Eleven had total sales of approximately $86 billion, with 8,951 U.S. stores and 58,705 international units. McDonald's ranked #1 with $96 billion in sales (13,912 U.S units and 37,855 international units), while KFC ranked #3 with $26 billion in total sales (4,074 U.S units and 22,621 international units).

Juul’s New Checkout System Blocks Underage Purchases

Juul Labs Inc. is offering more than $100 million in incentives to retailers to install a new electronic age-verification system intended to curb illegal sales to minors, reported the Wall Street Journal. The modification to point-of-sale software blocks each Juul purchase until the shopper’s driver’s license or other government identification has been scanned. It also “7-Eleven is the third largest grocery limits each purchain in the world, with net sales of $120 chase to a maxibillion, according to Edge by Ascential, mum of one vaporizer and four an e-commerce insights firm.” continued on page 59

18

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from page 14

to open a room for Video Gaming Terminals (VGTs) at one of its locations. The retailer said it partnered with Marquee by Penn, a subsidiary of Penn National Gaming, Inc., to open more than ten VGT rooms in 2019. • Three major Japanese convenience store operators, including Seven-Eleven Japan, will offer a 2 percent discount for cashless payments under the government’s rebate program to ease the impact of the consumption tax hike in October, reported The Japan News. • A new cashier-less store has opened at the Golden 1 Center in Sacramento, home to the NBA's Sacramento Kings, reported Business Insider. The store is powered by Zippin and allows fans to walk in, grab a beer, and walk out in under 30 seconds. • A planned Kroger fulfillment center in Dallas will feature robotic technology from Ocado that will be able to fulfill a 50-item online grocery order in around seven minutes, reported the Dallas Morning News. • Ford Motor Co. said it will add Austin, Texas, to the short list of cities where it plans to launch a commercial transportation service using automated vehicles in 2021, reported U.S. News & World Report. The U.S. automaker previously said it would begin transporting people and goods in automated vehicles in Miami and Washington.

• The first gas station in the U.S. to ditch gasoline for 100 percent electric vehicle charging opened recently in Takoma Park, Maryland. There are more than 20,700 registered electric vehicles in Maryland, and the area also has an electric taxi service in need of more charging infrastructure. • Impossible Foods is making its plant-based Impossible Burger patty available in grocery stores, reported Yahoo Finance. The company launched the product at Gelson’s, a supermarket chain in Southern California, but plans to have a presence in grocery stores across every region in the U.S. by mid-2020. • Netflix recently mailed continued on page 28

Legislative Update Illinois: Two Minimum Wage Hikes Next Year

of people have been sickened by mysterious lung illnesses and teenage vaping continues to Small businesses in Illinois are preparing for higher costs rise, reported the New York Times. Alex M. Azar II, the health as the state's minimum wage will increase twice next year on and human services secretary, said that the FDA would soon the way to a statewide minimum wage of $15 an hour by outline a plan for removing flavored e-cigarettes and nicotine 2025, reported e Center Square. While Cook County has its pods from the market, excluding tobacco flavors. own minimum wage ine ban would include mint and menthol, popular crease stepping up to “ILLINOIS WILL HAVE TWO MINIMUM varieties that manufacturers have argued should $15 an hour over time, WAGE HIKES IN 2020 AND YEARLY not be considered flavors. the first $1 PER HOUR INCREASES UNTIL 2025.” e article states the White House and the statewide inFDA have faced mounting pressure from lawmakcrease comes January 1 when the minimum wage ers, public health officials, parents and educators, who have goes from $8.25 to $9.25 an hour. A second ingrown alarmed by the popularity of vaping among teenagers crease to $10 an hour goes into effect July 1, 2020. but have felt powerless to keep e-cigarettes away from stuAer that, there’s a $1 an hour increase until the dents and out of schools. Restatewide minimum wage reaches $15 an hour cently, Michigan became the “The White House is in 2025. e higher wage costs will make it first state to prohibit the sale of talking about banning flavored e-cigarettes. Governor “impossible” for convenience stores to make a profit, Illinois Association of Conall e-cig flavors, Andrew M. Cuomo of New York venience Stores Executive Vice President including mint also called for a ban, and MassaBill Fleischli said, and added that owners are and menthol.” chusetts and California are conlooking for ways to reduce costs. sidering similar measures.

Arizona Cities To Pay For Minimum Wage Arizona cities and counties that raise their minimum wage above that of the state could be forced to cover the extra associated costs under a new law that went into effect August 27, reported U.S. News & World Report. Under the guidelines, part of House Bill 2756, officials will calculate how much money these local governments must reimburse the state. State officials claim when cities raise their minimum wage, the government ends up having to pay more for services in that area by increasing wages for government contractors. Opponents of the new law argue that it’s designed to keep localities in check and discourage them from raising their minimum wage.

Two U.S. congressmen recently introduced bipartisan legislation aimed at curbing vaping, especially among underage users, reported ABC News. Rep. Tom Suozzi (D-N.Y.) and Rep. Pete King (R-N.Y.) are behind the “Quell Underage Inhaling of Toxic Substances (QUITS) Act,” which proposes a federal ban on flavors in e-cigarette and tobacco products, creating a federal tax on e-cigarettes, raising the existing federal taxes on cigarettes and other tobacco products, and increasing the budget for the CDC’s Office on Smoking and Health. e legislation is the most comprehensive of its kind to be introduced in Congress, the article states.

White House May Outlaw Flavored E-Cigs

Four-Month Ban On All Vaping Products

e Trump administration recently said that it would ban the sale of most flavored e-cigarettes at a time when hundreds 20

Federal Bill To Curb Minors Vaping

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Facing an explosion of vaping-related illnesses, the governor of Massachusetts has ordered a four-month ban on continued next page

continued from previous page

Legislative Update Michigan First State the sale of all vaping products in the state in what is the To Ban Flavored E-Cigs most sweeping prohibition targeting electronic cigarettes in Michigan has become the first state in the nation to ban the country, reported the Boston Globe. The ban, which the flavored vape products in a move Governor Gretchen Whitstate’s Public Health Council quickly approved, took effect mer says is aimed at protecting youth, reported the Detroit on September 25 and will last through January 25, though Free Press. e ban, imposed by the Michigan Department of Governor Charlie Baker and the Council could choose to Health and Human Services through direction from Whitextend it. It includes both flavored and unflavored vaping mer, prohibits online and retail sales of flavored nicotine vaping products. e action does not ban unflavored or products, and applies to both online and retail sales. The tobacco-flavored vaping products. e move did not come by Baker administration stressed that the decision is intended executive order from Whitmer, but through Michigan's adto allow the medical community and federal officials time to investigate what’s driving the spike in vacontinued on page 53 ping-related illnesses.

“MICHIGAN BANNED ALL FLAVORED VAPE PRODUCTS,

AND BUSINESSES WERE GIVEN 30 DAYS TO COMPLY.”

My Two Years As A Chairman Of The NCASEF

BY JAY SINGH, CHAIRMAN, NCASEF, PRESIDENT, SAN ANTONIO FOA

The National Coalition will elect a chairman for the 2020-21 term at the fourth meeting of the year for its Board of Directors, October 22-24 in Atlantic City, New Jersey. By the time you read this, the election will be over, and I may or may not be reelected to the chairman’s position for a second two-year term. Let’s hope I am.

That being the case, I wanted to take this opportunity to talk about some of my experiences as chairman, and review and recount some of the things we did during my administration to strengthen the position of franchisees and our dealings with the company.

ful words just before the American Revolution in 1776, and they can surely be applied to our current franchisee/ franchisor relationship.

I took over the NCASEF as Acting Chairman in November 2017 during the fourth quarterly Board meeting in Nashville, Tennessee, and was later elected chairman for the 2018-2019 term. Over the years, I have served on many different SEI/franchisee committees like Business

1. The chairman’s primary role is to ensure that the Board is effective in its task of setting and implementing the company’s direction and strategy.

The chairman and the officers of the Coalition lead, but we do not act alone.

Each and every decision that affects all franchisees is voted on by the NCASEF Board of Directors. Throughout my administration the National Board has been more than democratic. We discussed and voted on motions for almost everything: policies, direction, strategy, PR, and even meeting places—whatever was asked of the National Board. In those cases when we needed more information, we did our homework and informed franchisees.

2. During trying times, the chairman and the officers of the Coalition operate at great personal risk. It takes a special kind of person to be chairman or an officer of the National Coalition.

“These are the times that try men’s souls.” Thomas Paine wrote these power-

Transformation, Accounting, Asset Protection, the Franchise Select Committee, the Franchisee Advisory Committee, the NBLC, and the CEO Roundtable. For the last five years I also served as an NCASEF Vice-Chairman, or as the Executive Vice Chairman.

Prior to the introduction of the new 2019 Franchise Agreement, the Franchisee Advisory Committee met for 18 months with the SEI team, with no results.

The one-year Agreement extension until

“The chairman and the officers of the Coalition lead, but we do not act alone. Each and every decision that affects all franchisees is voted on by the NCASEF Board of Directors.”

2020 was promised at our St. Louis Board meeting, then retracted even before the Boston misclassification lawsuit.

Once the California lawsuit was filed, SEI severed communications with NCASEF leaders. The misclassification lawsuit was filed by four plaintiffs after the National Board passed a motion unanimously to support them during the Nashville, Tennessee meeting. Up until that time, I had great communication with the SEI team.

SEI retaliated in January 2018 by removing all NCASEF officers, and FOA presidents and vice presidents, from the NBLC, CEO Roundtable, and other committees, and stopped communicating with the National Coalition and FOAs. 3. The chairman has a great responsibility to the franchisees who elected him to put his best possible foot forward in dealing with 7-Eleven, vendors and fellow franchisees.

One of the objectives and purposes of the National Coalition, according to our continued on page 24

“During trying times, the chairman and the officers of the Coalition operate at great personal risk. It takes a special kind of person to be chairman or an officer of the National Coalition.”

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

23

My Two Years As A Chairman Of The NCASEF continued from page 23

bylaws, is: “To communicate with 7-Eleven, Inc., and with the various regional trade associations of 7-Eleven convenience store franchisees and coordinate their efforts for the attainment of a social and economic framework which will enhance convenience store franchising, serve the public, and provide fairness and justice for the 7Eleven convenience store franchisee.”

At great risk to our own financial status, to our stores and our livelihoods, the current leadership team of the National Coalition has led on principle to oppose certain conditions of the new agreement that will only lead to more control and less profit for franchisees.

4. Franchisees need strong leadership in trying times.

branding, website, advertising, and any other use. The lawsuit was recently settled by both parties, at no financial cost to the National Coalition.

It has been quite a ride, for a chairman and the officers of the National Coalition to deal with three lawsuits.

“It has been quite a ride, for a chairman and the officers of the National Coalition to deal with three lawsuits.”

5. The Role of the chairman is multifaceted. Part cheerleader, part organizer, part administrator, part fundraiser, part good cop, part bad cop. Most of all, the chairman must run the organization as a business, and provide resources for all Coalition activities.

We have had the best attendance at our meetings and two record-breaking turnouts at the National Convention and Trade Show. We even brought over Japanese franchisees who were able to share information on their franchising of 7-Elevens in Japan and to tour some U.S. 7-Elevens.

We have issued a whole set of factbased press releases, we got the Avanti trademark registered for NCASEF, and we approached the Fair Trade Commission in the USA and Japan. We approached the Australian Joint Parliamentary Committee for Franchising, and we organized a lobbying effort at Capitol Hill. Our national officers visited franchisee stores in Japan and found out we have many similar problems with functionality and financial wellbeing.

Late last year we asked our 7-Eleven CEO to open communication with the National Coalition and to date we have received no response. We requested opening of communiation again via email on August 19, 2019, and SEI replied it has the NBLC, ZLC, CEO Roundtable, digital means, and individual franchisees can approach their field consultants, market managers, and zone leaders if they want to speak with company representatives. We will continue to seek open communications with our franchisor.

I believe we can continue to produce good work and “Out of the Box” thought processes to improve the functionality/transparency of this great organization and take it to next level in all aspects.

From day one my team and I streamlined the day-to-day work at the national office, with the assistance of a great office administrator. We’ve taken control of a lot of the work that was being sent elsewhere.

My team and I successfully launched the NCASEF Dispatch, which reaches about 3,500 franchisees via email—a first for our organization. In this digital newsletter we include important news and updates, and we also post it on the NCASEF website where franchisees can sign up to receive it via email.

The misclassification lawsuit filed by four franchisees in November 2017 was dismissed by Judge Walter in California’s 9th District Court in March 2018, without waiting for the Dynamex and Jan-Pro cases to be resolved. The California Supreme Court issued the Dynamex decision, changing the criteria for misclassification cases. The Jan-Pro ruling also said that Dynamex applies to franchising. We brought in Shannon Liss-Riordan, recognized as one of the nation’s “The current leadership team of the top plaintiffs’ class action employNational Coalition has led on principle ment lawyers, and appealed to the to oppose certain conditions of the new Ninth Circuit Court of Appeals. In agreement that will only lead to more February 2019, the judge overturned the dismissal completely, control and less profit for franchisees.” vacated the judgment and sent the In our first year, we cut down excase back to lower court with specific penses and overspending by $410,000, guidelines to proceed in the lower court.

Now that stay has been lifted and joint which resulted in our best balance sheet in motion in consent by both parties (SEI the last six years. No limos, no first-class and franchisee plaintiffs) was filed on Oc- travel, no favors for free rooms. I am a tober 8, 2019 with a hearing scheduled for humble man and have worked hard over the years to earn what I’ve got. I don’t need January 13, 2020. the extras or need to spend someone else’s Next, in February 2018, SEI filed a money.

In our last convention, for the first trademark lawsuit against the National Coalition that caused us to completely re- time, we allowed attendees to view our fimove the 7-Eleven logo from all our nancials and see where and what their dues contribute to.

24

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

JAY SINGH CAN BE REACHED AT 702-249-3301 OR JAYS@NCASEF.COM

Elected Not Selected: The Key To Franchisee/Franchisor Relations

BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF

Just two years ago McDonald’s franchisees formed a new National Owner’s Association after not having one for the entire history of the franchise. The vision of the two-year-old group, according to their website, is to “collaborate with other elected operator leadership and McDonald’s to positively impact the System for the benefit of the owners, our employees, customers, the Company and ultimately the shareholders.” Their mission is “to unify owners to ‘lead together again’ and save our culture, while assuring the owners have net cash flow growth, financial viability and are immune from intimidation and retribution.” Their core values are: 1) Honor the 3-Legged Stool; 2) Be Honest, Transparent & Respectful, 3) Be United— You Are Not Alone, 4) Embrace McFamily, and 5) Lead With Integrity.

Sound familiar? Absolutely, because these are much the same visions and goals of your very own National Coalition of Associations of 7-Eleven Franchisees, an organization that has been in existence serving franchisees since 1976.

In February of 2019, McDonald’s held elections for representatives of its internal franchisee leadership group, which is simililar to the NBLC in that it is organized by and works closely with corporate. Unfortunately it does not resemble in any way the NBLC structure for one reason, and one reason only: 7-Eleven’s NBLC is “Selected, Not Elected.”

7-Eleven’s current NBLC, and the CEO Roundtable, the group that selects the topics that the NBLC will engage, are all hand-selected by 7-Eleven and not elected by franchisees generally or by the National Coalition franchisee group. In

fact the protocols that were in place for selection are now even more loosely adhered to.

This is a major and very important distinction, because hand-selected franchisees are hardly accountable to anyone but the person or group that selected them. I would never, ever mean to malign anyone on the current NBLC, as I am sure they are all good, reputable, smart people, but they can’t possibly represent

“In February of 2019, McDonald’s Corporation held elections for a franchisee group that closely resembles our own NBLC.”

the majority of franchisees in the system the same way elected franchisees would.

They are not truly beholden to the franchisees the way they would be if they were elected, and they are not truly accountable to franchisees. In fact, their selection mitigates and marginalizes the elected leaders of the National Coalition and the 43 Franchise Owners Associations that do represent franchisees throughout the 31 states

in which 7-Eleven operates.

Therefore, I would like to propose a change in the structure of the NBLC and the CEO Roundtable: hold a national franchisee election starting with the members of the CEO roundtable, and then work on a structure for the NBLC, because what is more important than knowing that the folks who represent all the franchisees in the country, and who meet, intimately, with the CEO of the company, are accountable to the franchisees who elected them?

The advantages of such a move would be: 1. 7-Eleven would have a body of franchisees that they can be sure is representative of all franchisees.

2. The strength and quality of the feedback given to corporate would improve.

3. Elected franchisees who are in touch with their constituents can report on potential problems or issues before things get out of control, and obtain a solution instead of engaging in conflicts and litigation.

4. Franchisees and prospective franchisees will see such an organization as a positive of the franchise company. continued on page 28

“The McDonald’s group differs from 7-Eleven’s NBLC for one reason and one reason only: the NBLC members are ‘Selected, not Elected.’”

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

27

Elected Not Selected 5. Both parties can speak openly at association meetings and address sensitive topics in a productive way.

Who knows, such a relationship might even develop added trust between the franchisee representatives and the franchisor as they work closely together.

The disadvantages might include:

“Electing franchisee members of the CEO Roundtable and the NBLC would give both groups accountability to franchisees.”

1. The new organization might be able to challenge and resist new programs the franchisor wants to implement.

2. The association could have legal standing to litigate against the franchisor, and tap into the financial resources of its members.

3. Elected franchisees could be more diffi-

28

continued from page 27

cult to deal with than hand picked representatives.

4. Some members could be militant and seek to battle the franchisor.

5. If negative franchisees are not weeded out, some could seek to promote their own agendas.

Whatever the case, it is clear that this is one of the most tumultuous times in the history of the 7-Eleven system. Eighteen percent of all 7-Eleven stores are currently up for sale. Franchisees have a new contract we are not happy with, very few stores that are sold have goodwill attached, and quite a few long-term franchisees are leaving the system with no retirement at the end of a lifetime’s worth of work. In spite of our current difficulties, isn’t it worth a try?

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

MICHAEL JORGENSEN CAN BE REACHED AT

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

continued from page 18

out its 5 billionth disc, 21 years after deliveries began, reported Engadget. Although streaming dominates Netflix's business these days, it still mails out discs to some of its members. • Walgreens and Wing Aviation LLC have begun offering drone delivery service to eligible residents of Christiansburg, Virginia. The companies said they will use the pilot program to further explore the future of delivery through the air, offering product availability and home delivery minutes after placing orders via the Wing app. • Tyson Foods— the world’s secondlargest processor and marketer of chicken, beef and pork—has invested in New Wave Foods, a San Francisco-based start-up that will debut plant-based shrimp early next year, reported the Washington Post.

Once established, the company intends to follow with plant-based versions of crab and lobster. • St. Louis-based Schnuck Markets Inc. will no longer sell any tobacco prodcontinued on page 44

30

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Taking Responsibility: Seven-Eleven Japan ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

On July 1 of this year, Seven-Eleven Japan (SEJ) released a new feature on its 7Pay app that allowed the customer to scan a barcode with their phone and pay for their purchase with a credit card or debit card linked to their 7Pay account. Within 24 hours, one customer noticed a charge on a credit card that hadn’t been made by that customer. It turned out that the app had an important flaw that allowed hackers with a minimal amount of personal identifying information to break into the account. The hackers then found a way to automate the attack, resulting in access to the accounts of more than 900 individuals and unauthorized charges of approximately $500,000.

SEJ promptly suspended the barcode feature, stopped registering new users, posted a warning to customers on its website, and promised to compensate users whose accounts have been hacked. Later, the company was told by the Japan Ministry of Economy, Trade and Industry that it needed to bolster its security and that it had failed to follow security guidelines. The Japan Financial Services Agency ordered SEJ to report on all cases of unauthorized access to its app.

Recently, the parent company of SEJ issued an extraordinary press release acknowledging its shortcomings. The announcement stated that its authentication system, and its fraud detection and prevention measures, were “not perfect” and that strict policy and security standards had not been thoroughly implemented. In other words, it took responsibility for its actions. It committed itself to a series of recurrence prevention measures, including redevelopment and implementation of security policy and guidelines, expansion of personnel with expertise in security and in-

ternal training, and cultivation of aware“Coalition executive officers visited Japan in ness that security is indispensable as one September to meet with franchisees and members of the services pro- of the press to support their fellow franchisees vided to customers.

In addition to and to explore the ways in which their interests that, in recognition of and their experiences are similar.” the “serious inconvenience caused to the relevant persons,” the gation of National Coalition executive offipresident and the vice president of the par- cers visited Japan in September to meet ent company each agreed to return 30 per- with franchisees and members of the press cent of their monthly compensation for a to support their fellow franchisees and to period of three months. The executive offi- explore the ways in which their interests cer and general manager of System Head- and their experiences are similar. That quarters of SEJ agreed to a 10 percent commonality is also the reason that the National Coalition has reached out to the reduction of monthly compenJapan Fair Trade Commission regarding its sation for three announcement that it would begin a surmonths. Fivey of franchising in that country. na l ly, The National Coalition has the made similar outreach to the Australian Joint Parliamentary Commission and its successor, the Australian Department of Employment, Skills and Small “Recently, the parent comand Family Business, which is now studypany of Seven-Eleven Japan ing the possibility of additional measures regarding franchises in that country. issued an extraordinary More recently, SEJ made a second anpress release acknowledging nouncement acknowledging what it characterizes as a “harsh environment surrounding its shortcomings.” store operations intensified through factors president of Seven Pay Co., Ltd. retired from such as staff shortages and rising personnel expenses.” As a 7-Eleven franchisee in the the company.

Separately, SEJ has been under scrutiny United States, do you not have the same iswith respect to its 24/7 operation policy, sues and concerns?

The announcement further stated that which has become increasingly problematic the company was planning to carry out for Japan franchisees given labor shortages that have existed in that country for some measures towards “sustainable growth for continued on page 32 time. This is one of the reasons that a deleAVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

31

Taking Responsibility... continued from page 31

franchisees, such as enhancing the owner help system and other systems, continuously implementing labor-saving investments, and strengthening communication by sending out surveys for franchisees.” On top of that, SEJ announced new incentives for franchisees affected by these developments.

These include: for higher volume stores, a 2 percent reduction in predetermined charge for stores with 24-hour operations, a special discount of 1 percent on 7-Eleven charges, a monthly reduction amount of 35,000 Yen. For stores that do not operate 24 hours a day, there will be a special discount of 1 percent on 7-Eleven charges, a monthly reduction amount of 15,000 Yen.

“As a 7-Eleven franchisee in the United States, do you not have the same issues and concerns?” repeatedly, urgently, and in good faith extended the hand of cooperation in an effort to get the parties to transparently collaborate, communicate, bargain, and negotiate, and to treat each other with respect. Yet, the company implausibly insists that it bears no responsibility for the state of the relationship. Contrast that with the conduct of SEJ as described above.

“Seven-Eleven Japan is to close 1,000 convenience stores during the second half of its current fiscal year, and reduce the number of employees in the other units of the parent company by 3,000.”

The same announcement indicated that SEJ is to close 1,000 convenience stores during the second half of its current fiscal year, reduce the number of employees in the other units of the parent company by 3,000, as well as close five of its department stores and 33 general merchandise shops. The company expects these measures to cost a total of $93 million, but the stock market reacted positively, lifting the stock by 1.4 percent.

You can certainly argue that the measures taken by the parent company in response to the security breach and the financial distress of franchisees do not go far enough or are not adequate. But what is remarkable about both of these instances is the acknowledgment by the company that it has fallen short and needs to do better.

And that the profitability of its franchisees is of deep concern, as it well should be.

Which leads us back here to the United States. While SEI and its franchisees might certainly disagree on the cause, nobody can dispute the fact that the current relationship between this company and its franchisees is at a very low point. The National Coalition has 32

In a recent Dispatch, the National Coalition produced cold, hard facts: • Eighteen percent of 7-Eleven stores in the U.S. are currently available for franchising.

• Since April 2018, the number of available stores has increased more than 57 percent, from 999 to 1,578.

• Since April 2018, stores currently owned by a franchisee and put up for sale (known as goodwill stores) have increased more than 95 percent in California; 39 percent in New York; 314 percent in Illinois; 84 percent in Virginia, and 60 percent in Washington State.

• Completed sales of franchised stores more than quadrupled from 2013 to 2018.

• Turnover of franchised stores due to terminations, non-renewals and abandonments doubled from 150 in 2013 to 314 in 2018.

The gross margin for franchisees has been slipping, yet 7-Eleven has started taking a bigger portion of the declining gross revenues. According to public filings by its parent company, the blended gross margin of company stores and franchise stores in the United States fell from 36 percent in

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

2007 to 34.2% percent in 2018. Fully 6/10 of 1 percent of that drop has occurred in just the last three years. Yet, the 2019 franchise agreement calls for a much steeper gross profit split, with a marginal rate as high as 59 percent in favor of the company. And SEI’s increasing reliance on fresh food, hot food, private label items, and third party delivery are creating more profit uncertainty on the part of franchisees. At the same time, SEI’s net profit rose from $246.6 million in 2001 to $669.4 million in 2018, an increase of more than 170 percent over seven years.

From the perspective of franchisees, their financial results and those of the company are headed in opposite directions.

The repeated ask for a reset of the relationship can now be expressed in different terms, using the example of SEI’s parent and sister entities. While SEI has been producing record profits, which no doubt pleases its parent company, little attention has been devoted to the long-term effects of the unfortunate state of the relationship between the company and its franchisees, and the existential challenges to store level profitability.

“Why should the U.S. management team not follow the approach of SEJ and acknowledge that it has allowed its relationship with the franchise community to fall to unenviable levels?”

Why should the U.S. management team not follow the approach of SEJ and acknowledge that it has allowed its relationship with the franchise community to fall to unenviable levels, and start treating its franchisees like independent business owners, stakeholders in the brand, hard-working entrepreneurs, and not like store managers?

Take responsibility. There is no time like the present.

ERIC H. KARP CAN BE REACHED AT 617-423-7250 or ekarp@wkwrlaw.com

Franchisee Guest Column

WE ARE NOT RENTERS!

By Serge Haitayan, President, Sierra FOA I recently heard a pro-SEI person say him as an es“Franchisees are not ‘renters’—we have franchising a store is like renting a house teemed partas much at stake in 7-Eleven as corporate from a landlord: we shouldn’t expect to have ner and not a any rights or expectations beyond what is in tenant. does, if not more.” the current lease agreement. The person also He went heard that some of his peers weren’t said that when that lease expires, the landon to address the common statement we deemed “loyal to the company” because lord has the right to make changes in terms hear from corporate people who haven’t inthey were bad mouthing the current athowever they want and if a tenant doesn’t vested any of their own money into the sysmosphere, the changes that have occurred, like it, they can move on and leave. tem: “For years franchisees have made too and the general climate within the 7I thought about this a lot, and while I’ve much money.” To this, he said that the model Eleven universe. heard this analogy several times from corwas to maximize profit for both sides, and I asked him what his thoughts were on porate people or pro-SEI franchisees, I must that if he truly did make good money, then being called disloyal to a brand/company say I completely disagree with it was only be“Franchisees’ career that he had been a part of for many years this line of reasoning. For one cause he made a sacrifice, investment in and helped to become very profitable, while thing, when you rent a house lot more money 7-Eleven and work put in for the company. growing to our current size. He replied that from a landlord you are not in to build the brand create If we are operat- if he was considered disloyal, then what do any way, shape or form “busiyou call a company executive that comes ness partners” or trying to ing in a co-prosa responsibility on SEI’s and goes as soon as a recruiter finds them maximize profitability for perity model, like part to treat franchisees another job making more money? He then each other, which is the core we’ve heard for as esteemed partners challenged me to answer how many SEI principle of our relationyears, then what and not tenants.” zone leaders or vice presidents or other exship—supposedly. is wrong with ecutives have left the company for other opI have also heard a point of view from a making good money if you made even more portunities. I must admit I don’t know the very long-term franchisee that often gets for your business partner while doing so? He answer, but I recognize it is a large number overlooked. He said when he went into busisaid we should expect the company to emover the last 15 years. Based on that, I see ness with SEI, he took himself out of the pribrace and want to keep those making them many franchisees who have been in place vate job market with normal career paths, the most money, and not try to diminish for longer than 15 years. Who is the truly and that by agreeing to be a franchisee for them or reduce their incentive to excel. loyal one in this situation?

10-15 years or more, he was not as marI’m certain many of you would agree ketable in the open job market in his prior with this senti“WE BUILD THE BRAND IN OUR field as before. He also mentioned that comment. There panies want long-term employees or look to was a time STORES WITH YEARS OF SWEAT hire younger people, and by being a franwhen corporate AND HARD WORK, AND WE chisee for many years he sacrificed many of made its profit DESERVE A REWARD AT THE his best years in the eyes of the private sector (every penny of TIME OF OUR RETIREMENT. of employers. it) from the This franchisee explained that by giving store up. But it TODAY THERE IS NONE.” up his prior career path and his best working seems those Franchisees are not “renters”—we have years, now at his current age he isn’t as dedays are gone, and now we are left with a as much at stake in 7-Eleven as corporate sirable to outside employers. He explained sense that SEI is making money before the does, if not more. We build the brand in our that this career sacrifice and investment in merchandise even hits our store shelves. stores with years of sweat and hard work, 7-Eleven is not only financial, but in working I was taken aback by the franchisee’s and we deserve a reward at the time of our hard to elevate the value of the brand he creview, but he wasn’t done. He then wanted retirement. Today there is none. ated a responsibility on SEI’s part to treat to discuss loyalty. He said he recently AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

35

Franchisee Guest Column

CAN WE REGAIN THE PROMINENCE WE ONCE ENJOYED IN THE COFFEE MARKETPLACE?

By Jack W. Rugen, Editor, Soundwave Magazine, Former President, UFOLINY In the Fall 2007 issue of Soundwave, I wrote an article entitled, “It Ain’t Broke! So, Why Fix It?” At the time, SEI was in the process of changing their coffee program, and I maintained that altering the coffee program was not something corporate should often do because 7-Eleven’s customers had grown to expect specific offerings that fit their taste preferences. However, SEI was panicking over the state of its coffee numbers in the then-Northeast Division and went ahead with the program without the proper due diligence. I believe that drastic action is why SEI’s coffee program has struggled to compete since.

A few months earlier, I attended the Northeast Coffee Task Force. Attendees included SEI middle management and representatives from the Bunn-O-Matic Corporation and Mother Parkers Coffee & Tea Company. The objective of the summit was to investigate the reasons for—and to devise a plan to reverse—the then-recent negative trends in the Northeast region’s coffee numbers. The average decline, at the time, was about 30 cups per day, Divisionwise. On Long Island, where unique numbers had dominated the region for the then-past 25 years, some stores were experiencing declines of 60 to 300 cups per day.

Many issues about taste and quality, local customer profiles, consistent delivery, grind and brew specifications, water temperature, and competition were discussed.

During the first day of the meeting the then-Hot Beverage Category Manager shared research findings which showed— not surprisingly—that 7-Elevens were losing market share nationwide. More alarming was that 2005 market share ratings showed

c-stores at 49 percent, Mc“Competition in the coffee category Donald’s at 26 percent and is getting tougher as we chase the Dunkin’ at 25 percent, and same consumers for the same dollar, 2006 ratings clearly showed McDonald’s picking up an and in many cases the same 7-Eleven additional 11 percent and customers for the same dollar.”

Dunkin’ another 9 percent, successfully cannibalizing testing and quality assurance showed submore than 70 percent of the national market dued results in the two test stores: one utilizshare. Also, it was learned, that ONLY 13 ing a 3-ounce throw weight that lacked percent of our customers were aware we improved aroma and taste compared to 2.5 ground fresh beans, while 60 percent knew ounces, and the Columbian coffee frac pack, that Starbucks, Mickey D’s, and Dunkin’ did. disturbingly, was indistinguishable in flavor So, it was apparent—SEI had a substantial and smell from the fresh ground. The other amount of communication to do. However, store was dispensing too much water, which there was none, as usual. They just remodwas within corporate’s specifications, and the eled the coffee bars, installed new equipstore operator was complaining that the ment, and increased to a 3-ounce frac pack. water filter had not been replaced for over a “C-STORE CUSTOMERS year despite repeated requests via CHD online and telephone attempts.

HAVE COME TO I shared with the group that I had been EXPECT QUALITY very successful using less water than that ROASTS FROM specified by corporate for the Northeast Blend, using in-store grinders. But I also THEIR LOCAL CONnoted that the store operator needed to VENIENCE STORES.” “stay on top” of throw weight, consistency and particle size. A suggestion from SEI Bunn representatives also presented a Maintenance that the EverPure water filters new coffee grinder that would have accommobe replaced every six months fell on deaf dated 30 different recipes, one recipe per hopears but definitely would have solved the per, with the same 30,000-pound or three-year taste problem. What’s more, all the attenBunn warranty as to their other models. Pilot dees agreed that corporate should have programs were underway in Chesapeake, documented throw weights and flavor conBoston, Pennsylvania, and California, which sistency, water temperature and filtration, would have made it possible to customize this and preventive maintenance and replaceprogram to suit local preferences. Corporate ment schedules to ensure enhanced quality thought this was not the way to go. In my before implementing recommendations, as humble opinion, this was a big mistake! well as the use of a more flavorful, higher Day Two was to begin with competitive continued on page 38 store visits, which did not occur either. Taste AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

37

Franchisee Guest Column continued from page 37

quality blend. All these suggestions also fell on deaf ears.

My research for the best coffee in the cstore marketplace led me to the following: In 2014 America voted and determined that the QuickChek convenience store chain makes the best cup of coffee in the country (according to a Technomic survey). Other score leaders included Wawa for food taste and flavor, Kum & Go for a convenient location, and Circle K for pleasant, friendly service.

cluded many c-stores, including QuickChek, A-Plus/Sunoco, Cumberland Farms, Dunkin’, Starbucks, even Krispy Kreme and Cinnabon’s cold brew scored highly for their coffee programs. Consumer Brand Metrics surveys about 700 recent customers per chain. The scores were based on the percentage of current customers who rated the chains’ coffee quality as “very good.” The results showed big wins for c-store retailers holding their own against restaurant giants.

“Coffee is a category that many have invested in heavily, so don't sit back and let others take your coffee customers!”

• The competition in the coffee category is getting tougher as we chase the same consumer for the same dollar, and in many cases the same 7-Eleven customers for the same dollar.

• SEI’s lack of media attention and advertising is affecting coffee sales negatively.

• The best coffee, improperly brewed, isn’t going to taste like the best coffee—and your customers will go elsewhere.

• Training on proper brewing techniques and monitoring coffee for freshness is critical to your bottom line.

• A team of coffee experts should train your staff, as well as provide brewing and cleaning instructions to ensure the perfect cup of coffee, every time.

While Suffolk County, New York did at one time rule the hot-brewed, dispensed coffee market, this does not ring true today.

Consumers are showing they are willing to pay more for a great product coupled with experience, especially, the millennials. Millennials are the future, and their purchasing power is becoming more relevant every day.

Coffee is a category that many have invested in heavily, so don't sit back and let others take your coffee customers. Let’s stand up and brew a better coffee program! It is my humble opinion that the time has already passed to reevaluate the hot and cold-brewed

Surprisingly again, 7-Eleven’s coffee program Buc-ee's in Lake Jackson, Texas is the didn’t make the grade in this survey, either. highest-rated gas station coffee in America for As traffic growth to large coffee chains the second consecutive year, according to the is slowing, and traffic to small coffee chains latest study from GasBuddy. In honor of Naand independent shops is declining, contional Coffee Day on September 29, Gassumers are noticing the growing number of Buddy data scientists reviewed more than 3 other options available to them. million coffee ratings covering more than So, what are the lessons learned from 150,000 retail locations where gasoline is sold. the studies, research, and personal experiBuc-ee's captured the highest scores in the naence? We learned that: tion as being the best gas station c-store for a • Coffee should support the entire store. cup of Joe. On the state level, Tulsa, Okla• Coffee and foodservice go hand-in-hand. homa-based QuikTrip Corp. captured the top spot in seven states, while Pennsylvania-based Wawa “SEI’S LACK OF MEDIA ATTENTION AND ADVERTISING Inc. and Framingham, MasIS AFFECTING COFFEE SALES NEGATIVELY.” sachusetts-based Cumbercoffee program in 7-Eleven stores to com• C-store customers have come to expect land Farms Inc. tied for second place, both pete in today’s coffee marketplace. Too much quality roasts from their local convenience popular in six states. has been left to corporate to make ALL the stores.

For 7-Eleven convenience stores to be decisions, when it seems they place cost • Attention to customer demographics will competitive in the foodservice space, they above quality. help determine the best selection. must benchmark against not only other cThe question remains: Will we regain • Freshly ground beans are more desirable stores, but quick-serve restaurants as well. the prominence we once enjoyed in the cofover packets.

And one of the stiffest areas of competition fee marketplace? Or is it too late?

• 7-Eleven franchisees and SEI employees happens at the coffee bar. With that in mind, need to hold and keep equipment service Convenience Store Petroleum magazine set Note: The opinions expressed in this providers accountable concerning specificaout to see how consumers score some of the column are the author’s own, and do not tions and preventive maintenance. leading c-store brands’ coffee programs. The necessarily reflect the views of the • Our competitors have raised the bar on study, conducted by Consumer Brands MetNational Coalition of Associations of brewed coffee. rics, lists 25 great coffee programs that in7-Eleven Franchisees (NCASEF).

38

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Franchisee Guest Column

THE ISSUES ON OUR MINDS

By Hari Patel, President, Metro NJ FOA, NCASEF Board Member These days it is becoming increasingly difficult to run a small business like a convenience store. Although we are part of the biggest c-store system around, 7-Eleven franchisees are not immune to the many forces at play that are greatly impacting our industry. Let’s cover just a few of the issues that are keeping many 7-Eleven storeowners up at night.

LABOR PROBLEMS Franchisees are having trouble finding and keeping employees, for several reasons.

It used to be that working in retail was an entryway to employment for recent immigrants, as well as for people looking to get into the workforce. Jobs in retail teach us how to work with fellow employees, how to deal with vendors, and how to take good care of customers. However, the trend that I see

• The Internet has become a great job resource for people looking from home on their computers or smart phones.

• Gen Z prefers not to communicate directly with customers.

• Most people do not want to work overnights.

MINIMUM WAGE Most states and cities have chosen to increase their minimum wage rate, many to $15 per hour. Some are already there, while others will get to that rate in a few years after annual increases. When the labor pool is short because other companies are already offering $15 per hour starting salary, franchisees have to pay beyond the minimum wage to attract good sales associates, which puts a big strain on our payroll expenses.

“Franchisees are having trouble finding and keeping employees. More and more people want to choose the days and the hours they work.” is that more and more people want to choose the days and the hours they work. This is hard for retail businesses, especially 7Eleven. If we allow our employees to choose their work days and hours, we wouldn’t have anyone working our stores on the weekends or during the overnight hours.

Here are a few more reasons we’re having difficulty finding workers: • The Cool Factor—The typical young person does not want to work at some convenience store where they don’t feel “it is a cool job.”

• Recent immigrants are finding better options, such as ride hailing or food delivery where they can set their own hours.

CUSTOM RETAIL PRICING (CRP) Stores have to custom price their products to cover the minimum wage increases and stay above water. The downside to this is that in some cases we will chase our customers away by raising prices too high. So we have to CRP our store accordingly and try to get the right formula that will give us more profit without scaring away our customers.

VAPING AND E-CIGARETTE BANS It seems each and every state and municipality wants to be the first one to ban ecigarettes and vaping products, and a few have even proposed banning menthol ciga-

“WHEN THE LABOR POOL IS SHORT BECAUSE OTHER COMPANIES ARE ALREADY OFFERING $15 PER HOUR STARTING SALARY, FRANCHISEES HAVE TO PAY BEYOND THE MINIMUM WAGE TO ATTRACT GOOD SALES ASSOCIATES.” rettes. Franchisees and vendors do not know when we will be completely prohibited from selling these products. This creates uncertainty for suppliers as well as franchisees.

On the federal level, the Trump administration recently announced that they will seek to ban all flavored ecigarette products, including mint and menthol. It will take several weeks for the FDA to develop guidelines for e-cigarette sales, but once implemented, flavored e-cigarettes will be removed from the market within 30 days.

If and when this happens franchisees will be stuck with the inventory, which is held in our stores, resulting in loss of sales and inventory. As most vendors will not take returns, they will also have stocks full of their products.

A ban on menthol cigarettes is also brewing, with city after city trying to pass a law where it would be illegal to sell any menthol cigarettes. For 7-Eleven stores, the cigarette category can represent anywhere from 10 percent to 55 percent of their sales. If menthol cigarettes were to be banned, we would see a drastic drop in sales as menthol cigarettes account for 50 percent of cigarette sales for most stores. continued on page 44

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

43

Franchisee Guest Column continued from page 43

Vendors need to understand that higher GP with full funding is the only way that 7Eleven franchisees will push their products.

As time goes by, we see fewer and fewer $1 coffee and 79-cent Big Gulp promos are a fully funded promo items in our stores. hit if we do the promo for a limited time. If Franchisees are more inclined to plus-sell a we keep that forever, it is no longer a product when it is fully funded, but most promo—it will be an everyday low price. products now are partially funded or have As our business changes— no funding at all. We are switching to the these days faster than we world of blended GP. We have to be smart would like—it is now about our business decisions and which more important than products we bring ever for us to band to“As time into our stores. It gether so we can meet goes by, we see will dictate if we these challenges as a make money or fewer and fewer fully united front. I encourage not. By pushing funded promo items in our you all to join your local non-fully funded stores. Vendors need to un- FOA so you can share items at lower derstand that higher GP with your thoughts, concerns cost we are just full funding is the only way and ideas, and help your losing GP and that 7-Eleven franchisees will fellow franchisees overlowering our come obstacles. push their products.” store’s volume.

NEW NON-FULLY FUNDED PROMOS

continued from page 28

ucts in its grocery stores as of January 1, 2020, reported Progressive Grocer.

Schnucks will sell through its existing inventory through the end of the year. • McDonald’s is now accepting job applications through Alexa and Google Assistant, reported The Verge. After answering a few basic questions out loud using standard “Alexa” and “Ok Google” voice commands, applicants then receive a text with a link to complete the application process online. • The Massachusetts Cannabis Control Commission wants people who deliver recreational marijuana to wear body cameras in order to record customers accepting cannabis deliveries to their homes, reported the Boston Globe. If passed, the proposal would allow law enforcement continued on page 59

Vendor Guest Column

Q&A WORKERS’ COMPENSATION INSURANCE

By John Harp, CSP, ARM, Risk Engineering Consultant

WHAT IS WORKERS’ COMPENSATION INSURANCE? Workers’ compensation insurance is protection for people who get injured or become ill during the course of their employment. It can be the result of an accident—like hurting their back lifting a case of water—or being injured during an assault.

Workers’ compensation insurance offers five basic benefits: • Medical care for the injured worker.

• Temporary disability benefits to make up for lost wages while the injured employee is recovering.

• Permanent disability benefits if an employee can’t return to work.

• Supplemental job displacement benefits, which pay for skill enhancement or retraining if the injured worker can’t return to the job they had before the injury.

• Death benefits paid to a spouse, children or dependents if the worker dies as a result of job-related injury or illness.

“Workers’ comp is required in every state except Texas. More than half of all states require employers to carry coverage if they have one or more employees.”

company employs. More than half of all states require employers to carry coverage if they have one or more employees.

Yes, even a small business needs workers’ comp.

The penalties if you do not obtain workers’ comp insurance can be significant. It can lead to allegations of criminal noncompliance in some states. It can also lead to fines that vary depending on the

“A WORKERS’ COMP POLICY COVERS EMPLOYEES WHO’VE BECOME INJURED OR ILL ON THE JOB, OR DURING THE COURSE OF EMPLOYMENT-RELATED ACTIVITIES.” DO I HAVE TO BUY WORKERS’ COMPENSATION INSURANCE? Workers’ comp is required in every state except Texas. However, your franchise ownership agreement might require you to purchase the insurance regardless of state requirements. The workers’ compensation insurance requirement is dependent on the number of people a

number of employees, the reason for noncompliance, and the amount of time a business was noncompliant.

WHO DOES WORKERS’ COMPENSATION INSURANCE COVER? A workers’ comp policy covers employees who’ve become injured or ill on the job, or during the course of employ-

ment-related activities. Which employees are eligible depends on each state. Many states require workers’ compensation insurance for W2 employees.

It does not cover employees who have been injured outside their job role, self-inflicted injuries, injuries or illnesses from drugs or alcohol intoxication, injuries caused by fights or horseplay, or injuries sustained after an individual’s employment has been terminated.

HOW IS WORKERS’ COMPENSATION DIFFERENT THAN GROUP HEALTH? Workers’ compensation insurance is state-regulated coverage for workers who get injured or ill on the job. Group health insurance is coverage for preventative care and medical expenses for injuries or illnesses not occurring from the workplace. Most health insurance policies specifically exclude coverage for conditions covered by workers’ compensation insurance.

SHOULD I OBTAIN WORKERS’ COMPENSATION INSURANCE DIRECT, OR THROUGH A BROKER OR AGENT? Given how critical it is to protect yourself and your employees it is best that you contact an insurance agent or broker continued on page 48

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

47

Vendor Guest Column continued from page 47

such as AON. They understand the specific risks your business faces and can help you through the insurance company, and support safety in your organization to help control costs.

Essential elements to success your broker or insurance company should support:

• Safety program activities that are consistent with retail and the types of hazards commonly found in stores.

• Owner, manager and employee involvement in the safety effort, including regular safety training, safe work procedure review and post-injury management procedures, which are essential to reducing

injuries and managing costs.

• Advocating fair and effective claims handling.

WHAT ARE THE MOST COMMON TYPES OF EMPLOYEE INJURIES IN CONVENIENCE STORES? The three most common types of workplace injuries are:

WHAT ARE SOME COMMON WORKERS’ COMPENSATION TERMS? There is plenty of jargon associated with workers’ compensation insurance. Here’s a basic glossary of terms: • Accepted Claim/Admitted Claim: A workers’ compensation claim in which the injury or illness is covered by workers’ compensation insurance.

• Alternative Work/Light Duty: A new job offered to an injured employee that gets them back to work, but not in the same role they performed while getting injured. The role must last at least 12 months and pay at least 85 percent of the previous pay.

• Claims Administrator/Adjuster: The individual at an insurance company who handles an injured workers claim.

• Fault State/No-Fault State: In a “fault state,” workers’ compensation benefits are dependent on who is to blame for the accident. In “no-fault” states, benefits are given to any worker injured on the job.

• Impairment Rating: The percentage estimate of how much an injury has affected the use of an injured worker’s body. It can include physical impairments or mental impairments, and be 48

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

permanent or temporary, severe or mild.

• Independent Medical Examination: A medical exam performed by a physician not chosen by the company or the injured worker. This step is typically taken after a dispute arises over the extent of an injury.

• Permanent Disability: Payments to an injured employee when an on-the-job injury permanently limits the kinds of work they can do and/or their ability to earn a living.

• Temporary Partial Disability: Payments to an injured employee who can still work, but not at the same rate or level that they did before the injury or illness. These payments are available for a limited time, ending when a worker makes a full recovery.

• Temporary Total Disability: Payments to an injured employee who is unable to work at all for a temporary period of time. The benefits stop when the employee is able to resume working.

A. Overexertion. Lifting heavy objects like cases of water can lead to strains and sprains. Keeping heavy objects close to the body, bending at the hips, keeping good posture, and maintaining overall good condition can help to prevent these injuries.

B. Slips, Trips And Falls. This could be from spills, a recently mopped floor, or obstacles on the floor. Since these risks could also injure a customer, it’s essential to maintain good housekeeping, keeping things like brooms in their place, using clean mop heads and mopping when there’s less traffic, and using the “wet floor” signs when appropriate, with employees wearing the proper footwear.

C. Assault-Related Injuries. These tend to be the most serious injuries and require constant reminders for employees on how to handle suspected shoplifting or criminal threats. A proper, calm response to the situation and an understanding to never leave the store during or immediately after an assault can prevent injuries or save a life. continued next page

Vendor Guest Column

continued from previous page

HOW CAN I AVOID WORKERS’ COMPENSATION CLAIMS OR LOSSES? All businesses, regardless of size, should have a safety program and ongoing safety training.

• Consult The Experts. There is plenty of literature about the best ways to mitigate injury risks.

MSIG or your Insurance company has knowledge and resources to improve risk control in convenience stores.

• Train Constantly. Don’t just train new employees. Make sure everybody is going through ongoing training sessions so they’re up to date and reminded of safety procedures, especially related to crime.

• Review Your Store For Employee And Customer Safety Risks. Survey your store to identify potential hazards and how they might affect employee safety. After the assessment, follow up to make sure the hazard has either been eliminated or that training is provided to help workers avoid injury.

• Provide The Right Tools. Simple items

Here are some things you can do to fight fraud: • Look For Warning Signs. Was the injury reported on Monday morning? Did it happen immediately following a job termination? Were there no witnesses? Does the claimant have a history of suspicious claims?

Was the injury reported late?

Are they refusing X-rays or other diagnostic tests? These can all be warning signs of fraud.

• Check Their Social Media Pages. Is an injured worker out on leave but posting photos of themselves lifting heavy objects, running marathons, or skydiving? If so, you’ve likely caught them committing fraud.

• Assure Your Surveillance System Includes The Vault And Back Rooms.

Questionable injuries tend to happen where there are no witnesses or camera coverage.

• State A Zero-Tolerance Policy For Workers’ Compensation Fraud. Train

“THE THREE MOST COMMON TYPES OF WORKPLACE INJURIES ARE OVEREXERTION, SLIPS, TRIPS AND FALLS, AND ASSAULT-RELATED INJURIES.” like safety cutters, to quality stepladders, can help prevent injuries and illnesses.

HOW CAN I FIGHT WORKERS’ COMPENSATION FRAUD? Workers’ compensation fraud is unfortunately common. Employees can exaggerate or claim the injury happened at work to receive benefits while staying out of work. In fact, the National Insurance Crime Bureau reports that workers’ compensation fraud costs insurers as much as $7.2 billion annually.

SUMMARY Workers’ compensation insurance is an essential part of your insurance program and provides protection for your employees and the business. Sometimes it can be confusing and in some cases, you may have used it only once or never, but it’s there for peace of mind knowing your injured employee will be cared for without paying out of their pocket, which is why it’s important to choose your insurance company and broker wisely. They are there to support you with this process.

Also, your Claims Adjuster is your expert at navigating the rules and requirements of effectively applying the proper benefits in a timely manner. Contact them when you have any questions.

Key Points • Report all work-related injuries or illness within 3 days.

• Maintain communication with your adjuster.

• Maintain communication with employees that are on leave or disability.

• Help make an early transition back to work.

• Help reduce claims and keep costs down by promoting safety and preventing accidents.

For more information Worker’s Compensation plans, contact:

your employees about the costs of workers’ compensation fraud and explain that it could lead to serious consequences.

• Encourage People To Share Suspicions.

Creating an environment where people can speak out will help detect fraudulent behavior.

• Let Your Claims Adjuster Know Your Suspicions. When it’s serious enough, the claims staff may hire a private investigator to conduct surveillance. This might determine a situation where the claim can be denied or fraud can be pursued.

MITSUI SUMITOMO NSURANCE GROUP John Harp, CSP, ARM jIharp@msigusa.com 908-604-2951 Risk Engineering Consultant Greg Rice grice@msigusa.com 513-719-8405 Claims Account Executive

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

49

continued from page 24

NCASEF

HIGHLIGHTS

Your National Coalition is Committed to Franchisee Interests

Record Number Of 7-Eleven Stores For Sale NCASEF recently informed the news media about the record number of stores currently for sale in the 7-Eleven system—a sign that people are not investing in this company and a blemish on the corporation’s leadership team. About one year ago, National Coalition members took a vote of No Confidence in corporate management at 7-Eleven, Inc. (SEI). Since then, SEI has ignored repeated requests from franchisees to create a more transparent and trustworthy relationship. Our most recent request to meet directly with the leadership team did finally receive a response. We were told that corporate has no interest in hearing us out. What in fact they’re saying is that they have no interest in the concerns of any franchise owner “It is clear 7-Eleven’s who is a member of this coalition. leadership in Dallas The press release we distributed and Tokyo are not to the news media points out that franchisees are leaving the system interested in the in record numbers, creating a high best interest of number of available stores across franchise owners. the country. Simply put, many can no longer afford to stay in business We continue to see and potential buyers are put off by the company taking the fact that store level profits are steps that benefit falling. the balance sheet “It is clear 7-Eleven’s leadership in Dallas and Tokyo are not inter- without consideraested in the best interest of fran- tion for store-level chise owners. We continue to see profits.” the company taking steps that benefit the balance sheet without consideration for storelevel profits,” said NCASEF Chairman Jay Singh. “As a result franchisees are leaving the system and replacements are hard to find.”

According to publicly available franchising data from SEI: • Eighteen percent of 7-Eleven stores in the U.S. are currently available for franchising.

• Since April 2018, the number of available stores has increased more than 57 percent, from 999 to 1,578.

• Since April 2018, stores currently owned by a franchisee

50

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

and put up for sale (known as goodwill stores) have increased more than 95 percent in California; 39 percent in New York; 314 percent in Illinois; 84 percent in Virginia and 60 percent in Washington State.

• Completed sales of franchised stores more than quadrupled from 2013 to 2018.

• Turnover of franchised stores due to terminations, non-renewals and abandonments doubled from 150 in 2013 to 314 in 2018.

We all know that our average gross margins have been declining even before 7-Eleven started taking a bigger portion of store revenues. The new 2019 franchise agreement has only made matters worse since it includes a much steeper gross profit split, with a marginal rate as high as 59 percent going to corporate. High performing stores are particularly hard hit. With what is left of our revenue, we’re forced to find a way to make ends meet after paying labor, maintenance and operating costs, in addition to purchasing food and merchandise. We maintain our assertion that the supply chain should offer franchisees the lowest cost of goods. If they cannot make this guarantee, we should have the right to locate and purchase goods at the lowest price we can find in order to increase profitability.

“The corporation profits from the supply chain, even as store-level profits are sinking,” Singh said. “And now with the new 7Rewards program, franchisees are under pressure to sell food and beverages at a discount.”

After years of poor management, the NCASEF Board believes a change in corporate leadership, starting at the top, is in order. This is the only way to make investing in a 7-Eleven franchise more appealing to new investors.

As we know, 7-Eleven has slipped from the No. 2 spot on the list of best franchised businesses to No. 10. We believe this is a direct result of corporate leadership’s failure to establish a collaborative, transparent way

7-Eleven franchisee who has been sold a store in close proximity to theirs. We have seen 7-Eleven stores literally across the street from each other vying for the same customers. Despite their complaints about the practice, they say the company has repeatedly ignored them.”

In addition, Japanese franchisees face large monetary Shrinking gross profits. 24/7 operational mandates. Store losses from food waste as a direct result of 7-Eleven’s emencroachment. Questionable management tactics. Poor communication with franchisees. Likely these issues sound familiar phasis on both fresh and hot foods. These products tend to to you—and they should. 7-Eleven franchisees here in the have higher gross margins, but carry higher labor costs as well as creating losses since franchisees must bear the cost United States face them on a daily basis, but so do our counterparts across the globe, which is why members of the of food disposal of unsold goods.

7-Eleven is the top convenience store chain in Japan with NCASEF executive board traveled to Tokyo for a series of meetings with Japanese franchise owners who are pressing over 21,000 stores; the company posted record profits this year. The undisputable reason for this record-setting year is for change in the 24/7 convenience store culture in that country. NCASEF leadership also met with many prominent mem- the hard work and dedication of Japanese franchisees. In spite bers of the Japanese press who have shown a keen interest of this, they feel the company’s success is coming at their exin this goodwill trip and have covered the meetings at length. pense. Franchisees truly ARE the brand in both our countries.

Coalition members have also spent a good “We were invited to Tokyo to share information and ideas with several leading “7-Eleven is the top conven- portion of the visit discussing our work here Japanese franchisees that we have ience store chain in Japan in the United States to encourage the passing of fair franchising laws including lobbybeen communicating with over the last with over 21,000 stores; ing members of Congress, communicating few years,” said Executive Vice Chairwith the U.S. Federal Trade Commission via man Michael Jorgensen, who was the company posted NCASEF General Counsel Eric Karp, and joined in the Japanese capital city by record profits this year.” meeting with attorney generals in various Vice Chairman Rehan Hashmi and states. Franchisees in Treasurer Jaspreet Dhillon. both the U.S. and “Like us, they love the 7Japan would Eleven brand, but benefit from are frustrated with the protectheir situation.”

Japanese franchise owners reportedly are at odds with 7- tions guaranteed under a Fair Trade Act. The Japan Fair Eleven’s parent company, Seven & i Holdings, which is head- Trade Commission has launched an investigation into the quartered in Tokyo. Japan is facing a massive labor shortage, country’s convenience store industry focusing in part on which makes the mandate to stay open around the clock whether the 24/7 operating model and other restrictions are nearly impossible for many franchisees to meet. NCASEF putting some franchisees at a disadvantage.

In a letter to the Fair Trade Commission’s chairman, members have learned that many Japanese franchisees often NCASEF General Counsel Eric Karp said, “[The] experience cannot leave their stores when a loved one dies, because they don’t have the support or staff necessary to keep the store and treatment of 7-Eleven franchisees in Japan closely mirrors open in their brief absence. That is a situation no franchisee the challenges faced by7-Eleven franchisees in the United should ever have to face. We also met with the family of a States,” pointing out “there is a substantial disparity in ecofranchise owner who took his own life over the financial and nomic and legal power between franchisors and franchisees.”

“By strengthening our alliance with Japanese franchisees, emotional strain operating his business placed on him. we are sending a message to 7-Eleven that they can’t ignore “We have heard from our Japanese counterparts that encroachment is a major issue,” said Hashmi. “Japan may have us,” said Dhillon. “At the end of the day, we want the same thing. We want the 7-Eleven brand to be successful and we one of the most saturated convenience store markets anywhere in the world. They’re facing increased competition for want to be personally successful. We need to work together sales and many times that competition comes from another to make that happen.” of doing business with franchisees. As a result people are not rushing in to buy available stores.

NCASEF Board Members’ Trip to Tokyo

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

51

continued from page 21

Legislative Update ministrative rules process, which allows state agencies to create regulations or policies that, once authorized, act as laws. Michigan businesses were given 30 days to comply with the new law.

California Bill On Youth Vaping A California bill that seeks to make it harder for underage teens to buy e-cigarettes advanced recently aer legislators rolled back some of the regulations originally proposed in the measure, reported the San Francisco Chronicle. e bill, AB1639, would increase mandatory sting operations on stores that sell e-cigarettes and other tobacco products; require stores to use age verification technology to ensure buyers are at least 21; increase fines and penalties to stores that illegally sell e-cigarettes to underage buyers; require vape shops and smoke shops to check customer ID at the door to make sure they’re at least 21; and prohibit e-cigarette companies from advertising and marketing products in a way that targets youth. e measure has been significantly narrowed since it was introduced. It had initially sought to limit the sale of flavored e-cigarettes to smoke and vape shops only—and ban the sale of “CALIFORNIA’S flavored e-cigarettes (except for AB1639 WOULD INmint and menthol) at convenience stores. e Assembly ComCREASE MANDATORY mittee on Health passed the bill.

STING OPERATIONS It next heads to the Assembly ON STORES THAT Appropriations Committee and, SELL E-CIGARETTES if approved, gets a vote by the AND OTHER TOBACCO full Assembly. It has not yet been considered by any committee in PRODUCTS.” the Senate.

New York Emergency Ban On Flavored E-Cigs New York health officials recently issued a ban on the sale of flavored e-cigarettes, reported Fox News. e vote on September 17 by the state Public Health and Health Planning

Council meant the prohibition, “A New York Planning Council vote which covers September 17 banning flavored flavored e-cigae-cigs was stalled by four appellate rettes and other judges until the ruling is determined vaping products by a lower court judge.” including menthol, went into effect immediately. Retailers had until October 4 to remove merchandise from store shelves. Governor Andrew Cuomo had proposed the emergency ban a few days prior, citing surging use among young people. e emergency regulation will expire 90 days aer September 17 unless it’s renewed. Cuomo has proposed legislation that would put the ban in state law, eliminating the need to renew the ban.

Hours before the ban was to go into effect on October 4, however, it was halted by the Appellate Division in Albany, which granted a temporary restraining order in the lawsuit brought by the Vapor Technology Association—a national trade group—against New York and state officials, reported e Journal News. Four appellate judges ruled that New York officials are “temporarily enjoined and prevented from enforcing” the flavor ban until a ruling on the motion for a preliminary injunction is determined by a lower court judge.

New Jersey May Ban All Electronic Smoking Products State officials in New Jersey recently proposed a ban on all electronic smoking products, reported NBC New York. Although New Jersey Senator Shirley Turner and Senator Joe Vitale have introduced new “New Jersey may become the first bills that would state to ban all vaping products.” prohibit the sale of flavored e-cigarettes in the state, Senate President Steve Sweeney said he will propose a plan to phase out the sale of all vaping products over the next few years. If the plan passes the State Assembly, the Senate and Governor Phil Murphy— continued on page 54

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

53

continued from page 53

Legislative Update who says he's already considering the issue—New Jersey would be come the first state to ban all electronic smoking devices and products.

Washington Bans Flavored Vaping Products

against the hazards of vaping to be placed at retailers and on advertising for e-cigarettes and accessories. e director of the Vaping Technology Association—which represents manufacturers, wholesalers and retailers of vaping products—said he supported Newsom’s call for cracking down on youth access to e-cigarettes.

Washington state recently passed an emergency rule that bans the sale of flavored vaping products effective immediColorado Considers Raising ately, reported CNN. e ban lasts 120 days, and comes in re- Vaping & Smoking Age sponse to a nationwide outbreak of lung injuries associated Two Colorado lawmakers are working on a possible bill with e-cigarette use or vaping. In September, Washington to curb teen vaping and other tobacco use by raising the Governor Jay Inslee announced an executive order directing statewide minimum age for buying such products to 21, rethe Washington State Department of Health to adopt emerported the Denver Post. Representative Colin Larson and Sengency rules to ban all flavored vaping products—including ator Kevin Priola both worked on a bill passed during the those that contain nicotine and THC—at their 2019 session that banned the use of e-cigarettes inside or next meeting, which was held on October 9. within 25 feet of commercial and government buildings.

In his September announcement, Inslee Priola said their work on legislation to curb teenage vapadded that the next steps include for the ing is still in the early stages. A bill hasn’t been draed health department and the Washington yet and stakeholders still need to be heard from.

State Liquor and Cannabis Board to work together on draing governor-rePennsylvania Raises Tobacco-Buying Age quested legislation for 2020 that would permanently ban Legislation that would raise the minimum “WASHINGTON STATE (120 DAYS), all flavored vaping products, legal age to buy tobacco and vaping products in MASSACHUSETTS (160 DAYS) require disclosure of all ingrePennsylvania from 18 years of age to 21 passed AND NEW YORK STATE (90 DAYS) dients in products, increase the Pennsylvania Senate recently, reported the HAVE ALL ORDERED TEMPORARY the regulatory oversight of Patriot-News. e bill, approved by a 43-6 vote, EMERGENCY BANS ON THE SALE these products, limit bulk now goes to the House for consideration. State sales and expand an educaOF ALL VAPING PRODUCTS.” Senator Mario Scavello, tional campaign.

R-Monroe County, who “Raising the legal authored the Tobacco 21 legislation, age limit for vapCalifornia Gov Takes Action sees this change in the minimum legal ing is expected to On Vaping & E-Cigs age as a way to deter younger teens reduce PennsylCalifornia Governor Gavin Newsom recently announced from getting addicted to tobacco vania’s revenue a crackdown on illegal and counterfeit e-cigarettes, and plans products. If the bill becomes law, received from to launch a state-sponsored public awareness campaign about Pennsylvania would join New York, cigarettes and the dangers of the devices in order to reduce youth vaping New Jersey, Ohio, Virginia, Maryland, other tobacco consumption, reported the Los Angeles Times. e governor and 13 other states that have or soon product taxes by has set aside $20 million for a vaping awareness campaign will raise their minimum tobacco$9.8 million the and instructed state health officials to develop signs warning buying age. continued on page 56

54

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

first year.”

continued from page 54

Legislative Update Raising the legal age limit is expected to reduce revenue received from the state’s cigarettes and other tobacco product taxes by $9.8 million the first year, and that loss is anticipated to grow to $14 million by year three, according to the Senate Appropriations Committee’s fiscal note. Along with that, the state is expected to lose $11.9 million in sales and use tax in the first year, and that likely would rise to $17 million by year three.

L.A. County Considers Banning Flavored Tobacco Los Angeles County could soon become the nation’s largest jurisdiction to ban the sales of flavored tobacco—a

move aimed at fighting what public health officials increasingly call an epidemic of e-cigarette use among teenagers, reported the Los Angeles Times.

Under a proposed ordinance that the Board of Supervisors is expected to consider soon, stores in unincorporated areas would no longer be able to offer any tobacco products with a flavor in any form. at includes e-cigarettes with fruity pods of liquid nicotine, traditional menthol cigarettes, mint chewing tobacco, and cream cigars, among other products. e plan also would require new or existing tobacco shops to get business licenses. e new rules would be enforced starting in February 2020. Businesses that don’t comply could have their licenses suspended.

Franchisees Celebrate 32nd Anniversary By Honoring Customers On August 10, Wilson and Fabiola Garcia from store #29032 in Glendale, California celebrated their 32nd anniversary as 7-Eleven franchisees with a Customer Appreciation Day. The event featured special promos like 50-cent hotdogs, pizza slices and medium Slurpees, as well as a recognition celebration with elected officials, a live radio on-site broadcast, and donations of backpacks to local Jefferson Elementary School. There was also a monetary donation to the Glendale Police Foundation.

Left to right: Wilson Garcia, franchisee; Fabiola Garcia, franchisee; Melinda Clarke, Glendale Police Foundation; Vrej Agajanian, Glendale City Council member; Assemblymember Laura Friedman from District 43; Armineh Alexan, Thomas Jefferson Elementary School Principal; Arda Tchakian, District representative for Senator Anthony J. Portantino, 25th Senate District.

Wilson and Fabiola Garcia are pictured with their children and grandchildren, as well as local elected officials.

56

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Wilson and Fabiola Garcia are interviewed live on radio station, Radio Toxiko, with DJ El Diablito.

continued from page 18

continued from page 44

agencies to access the footage for any reason. • India’s Prime Minister Narendra Modi recently announced that his government plans to ban single-use plastic in the coming years, and has urged global global leaders to follow India's decision, reported NDTV. • Amazon recently held job fairs across the country, aiming to hire more than 30,000 people by early next year, reported the Associated Press. Salaries range from $100,000 a year for software engineers to $15 an hour for warehouse staff. Amazon said all the positions are permanent full-time or part-time jobs that come with benefits. • More than 5.3 million credit and debit card accounts linked to a recent data breach at Hy-Vee gas pumps, coffee shops and Wahlburgers operated by Hy-Vee are for sale online, reported the Des Moines Register. The data is being sold under the code name “Solar Energy” at Joker's Stash carding bazaar, a website where stolen credit and debit card data is resold. • C-store chain Sheetz recently announced the opening of its first-ever technology and innovation hub located in Pittsburgh, Pennsylvania. The company said the hub will focus on developing, testing and implementing “transformative products and services” to continue to meet customer demand for the ultimate one-stop-shop. • Sales at restaurants are up over 4 percent this year, surpassing grocery sales at just 3 percent—a sign that consumers are eating out more and cooking less, reported CNBC. The National Restaurant Association projects overall industry sales will hit a new high of $863 billion in 2019, up 3.6 percent year-over-year. • Rutter’s recently announced that it is adding new plantbased items to their foodservice menu. The company said it will be the first convenience store to offer products from JUST and Dr. Praeger’s, with the launch of their plant-based egg patties and burgers, which will be sold at all continued on page 60

refill packs. So far, Juul said, Cumberland Farms Inc., QuikTrip Corp. and other chains representing 40,000 outlets have agreed to adopt the system.

C-Store Owners Expect Sales To End On A High Note An overwhelming 84 percent of U.S. convenience store operators said they are optimistic about their business prospects for the fourth quarter, which

would continue the pattern of strong sales throughout 2019, according to the latest Retailer Sentiment Survey by the National Association of Convenience Stores. Retailer optimism in Q3 was 83 percent. Nearly three in four retailers (74 percent) said in-store merchandise sales were up over the first nine months of 2019. Convenience retailers also reported that fuel sales increased: 52 percent said fuel sales were higher than last year. Only 10 percent of retailers said merchandise sales were continued on page 60

Delaware Franchisee Conquers Mount Everest On May 21, longtime Delaware franchisee Ricky Singh stood at the top of the world after successfully scaling Mount Everest. According to an article in Town Square Delaware, Singh spent two months in Nepal preparing for the climb. In a year with a record number of deaths on the infamously treacherous climb, Singh told the publication he decided to attempt the summit on a day with questionable weather conditions so he could avoid the long waits that caused some hikers to lose so much oxygen and lead to their deaths. Since he climbed when few others did, Singh was able to spend 20 minutes on top of Mount Everest.

Singh with his Sherpa (right) Phurba Sherpa.

Singh’s phone died before he reached the top and Phurba had enough battery left for only this one photo.

7-Eleven Franchisee Ricky Singh (in front with red cap) takes a selfie with other climbers who made it to the top of Mount Everest.

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

59

continued from page 59

down and only 17 percent reported a decrease in fuel sales.

Retailers said the morning daypart (approximately 6:00 am to 11:00 am) drives the most sales: 62 percent said it’s the most importance daypart for merchandise sales and 50 percent said it’s the most important time for fuels sales.

Retailers also said beverages help drive customer traffic inside the store. Most retailers (57 percent) said buying a beverage was the top reason customers come inside the store, compared to 23 percent for a food purchase and 18 percent to purchase something else.

Counterfeit Cash Plagues Philadelphia Franchisees Secret Service officials are warning about counterfeit cash being circulated around South Philadelphia, and one 7Eleven franchisee in particular found out the hard way when he learned a lot of the money he took from customers turned out to be bogus, reported ABC Action News. Vincent Emmanuel told

the news station he is frustrated with what's been happening recently at his 7-Eleven store. “All of a sudden, we saw a surge of counterfeit $20 bills and $100 bills in the store,” he said. The money looks real enough, and it wasn't until the bank notified Emmanuel that he realized some of the money he had deposited was actually counterfeit. The Secret Service said it is currently investigating a number of these counterfeit cases, and estimates that roughly $45,000 to $50,000 of counterfeit money is passed weekly through the Philadelphia region.

Wawa Plans Big Northern Virginia Expansion Wawa plans to open 40 stores in Northern Virginia over the next 15 years, reported the Philadelphia Inquirer. The first store in this expansion will open in April 2020 in Vienna, in Fairfax County. The company said there are three other stores in the continued on page 62

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: nationalcoaltion2@ncasef.com

60

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from page 59

Rutter’s restaurant locations. • KFC recently became the first national fast-food chain to introduce plant-based chicken in the U.S., partnering with Beyond Meat to create “Beyond Fried Chicken” nuggets and boneless wings only available at one Atlanta location for a limited test, reported Eater.com. • Pennsylvania-based convenience retailer Wawa plans to install solar panels at 93 of it stores across New Jersey by the end of 2020, reported the Philadelphia Inquirer. When all installations are complete, the Wawa locations will generate more than 10,200 megawatt hours annually, second only to Target in New Jersey. • Amazon’s engineers are testing scanners that can identify an individual human hand as a way to ring up a store purchase, with the goal of rolling them out at its Whole Foods supermarket chain in the coming months, reported the New York Post. • Kroger and Walgreens said they would stop selling e-cigarettes at their stores, amid heightened regulatory scrutiny of the product and reports of lung disease and some deaths linked to vaping, reported Reuters.

• Walmart is pushing further into primary care with the debut in September of a Walmart Health clinic in Dallas, Georgia that also offers hearing, dental care, vision testing and mental health counseling sessions, reported Business Insider. • UPS recently received approval by the Federal Aviation Administration to start setting up a fleet of drones to deliver health supplies and eventually consumer packages throughout the U.S., reported the Wall Street Journal. • More than half (52 percent) of the retailers surveyed are not prepared to support the next wave of technologies like AI, Chatbots and AR as part of their mobile engagement strategy, according to the latest report from WBR Insights. Only 9 percent said they were able to support these features. • Chick-fil-A ranked #1 in MBLM's Brand Intimacy 2019 Study, which is the continued on page 64

continued from page 60

county that will start construction in 2020, with plans to open two to three stores a year in the region. There are currently 87 Wawa stores in Virginia.

The 40 planned stores in the Northern Virginia market are expected to bring 2,000 jobs. The new Vienna store will be 6,290 square feet with seating areas, and will have Tesla Charging Stations for up to eight cars, Wawa said.

Amazon Planning Chain Of Grocery Stores Amazon.com Inc. is advancing a plan to open a chain of U.S. grocery stores with early locations in Los Angeles, Chicago and Philadelphia, reported the Wall Street Journal. Citing unnamed insider sources, the newspaper states that Amazon is planning to operate

dozens of grocery stores in cities across the country as part of its increasing focus on a bricks-and-mortar presence to find more ways to reach consumers.

Many of the proposed locations are outside urban cores and cater to middle-income consumers.

Apart from prepared foods, they will stock mainstream groceries such as soda and Oreos, people familiar with the plan said.

According to the article, Amazon has signed more than a dozen leases in the Los Angeles area. The first few stores are likely to be in the dense suburban locations of Woodland Hills and Studio City, while another store is slated for the city of Irvine, in nearby Orange County. These stores could open as early as the end of the year.

end on a positive note, reported CSP Daily News, citing a new report from Wells Fargo Securities Senior Analyst Bonnie Herzog. The report further re-

“2019 Labor Day beverage sales in convenience stores grew 4.1 percent over 2018, according to Wells Fargo Securities.”

C-Store Summer Beverage Sales End On A High Note Beverage sales in convenience stores grew a healthy 4.1 percent during Labor Day weekend compared to the year before, helping the summer selling season

veals that non-alcohol beverage sales for the holiday weekend grew 3.5 percent in c-stores; bottled-water sales grew 5.1 percent; alcohol drink sales increased 4.9 percent; and retailers estimate that the energy category grew by a 9.3 percent this past Labor Day weekend.

Dollar Tree Plans More Store Remodels Dollar Tree Inc. is planning 150 more new-model Family Dollar H2 store renovations during its fiscal year 2019, citing the success of the format, which features more freezer and cooler doors with a broader selection of prodcontinued on page 64

Want to talk to other franchisees?

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

62

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

Paul Lobana, Vice Chairman, President, Southern California FOA

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

paullobana@aol.com 818.203.2527

rehan711@yahoo.com 847-845-8477

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

National Office

425-438-8381 ajinderhanda@hotmail.com

nationaloffice@ncasef.com 210.971.9211

continued from page 62

ucts, reported Progressive Grocer. With the added remodels, the company aims to have 1,150 H2 stores up and running in that time frame. The plans were revealed as the company posted a consolidated net sales increase of 3.9 percent to $5.74 billion for its fiscal 2019 second quarter ended August 2, from $5.53 billion in the year-ago period.

During its second quarter, Dollar Tree also opened 150 new stores; expanded or relocated 19 stores; closed nine Dollar Tree stores; opened 106 Dollar Tree stores that were converted from the Family Dollar banner; and added freezers and coolers at 210 Dollar Tree stores, bringing its total number of stores under that banner with freezers and coolers to 5,970.

McLane Showcases At The 2019 NACS Show McLane Company, Inc. showcased at the 2019 NACS Show, held October 1-4 in Atlanta, and the company’s booth was a destination experience that allowed attendees to experience new interactive technology, McLane Kitchen, the foodservice at retail offering, and Consumer Value Products (CVP), McLane’s private label products subsidiary. McLane Kitchen and CVP offered samples of their newest products, as well as some tried-and-true favorites.

The technology area displayed McLane’s latest consumer facing technology on a variety of devices such as Surface Pros, smart phones, the CT50 Honeywell smart handheld device and a new tablet built with c-store operators in mind. Featured technology included the recently announced back office management solution, a one-stop-shop for retailers and all their technology needs, and a new text notification feature on McLane’s Delivery Tracker Application that sends a text message straight to a retailer’s phone if their delivery is delayed.

The CVP area featured 40 newly debuted products, while the McLane Kitchen featured a fully functioning kitchen with new menu offerings for attendees to experience throughout the show, including a roller grill western jalapeno omelet, pre-packaged salads and deli-style sandwiches.

Overtime Pay Threshold Lifted The U.S. Department of Labor issued its final overtime rule, making 1.3 million additional employees eligible for overtime pay under the Fair Labor Standards Act (FLSA), reported NACS Online. When the final rule takes effect

continued from page 60

largest study of brands based on emotion. Brand Intimacy is defined as the emotional science that measures the bonds consumers form with the brands they use and love. Dunkin’ ranked # 2 and Starbucks #3. • White Castle recently celebrated the first anniversary of making the Impossible Slider a permanent menu item in all Castle restaurants. The fastfood hamburger chain introduced it as a permanent menu item on September 12, 2018 at each of its nearly 400 restaurants nationwide. • Ohio has received $17.8 million to generate data on self-driving vehicles, an area of research in which the state is already playing a prominent role, reported the Associated Press. • Juul Labs Inc. announced that its CEO Kevin Burns stepped down on September 25, handing the reins of the company to K.C. Crosthwaite. The company also said it has suspended all broadcast, print and digital product advertising in the U.S. • C-store chain Speedway recently announced that its 28th annual Speedway Miracle Tournament raised more than $2.8 million in donations to Children’s Miracle Network Hospitals. The golf tournament was held at NCR Country Club in Kettering, Ohio in June and had nearly 800 participating golfers. • Three years after opening its first cashierless store, Denver-based c-store chain Russell's Convenience implemented frictionless checkout to all of its 19 locations, reported CSNews Online. continued on page 66

continued on page 66

Share Your Experience and Expertise Do you have a store experience, some operational expertise, or thoughts about the 7-Eleven system you would like to share with your fellow storeowners? Avanti Magazine welcomes articles from franchisees interested in communicating their ideas, knowledge, suggestions, opinions, etc. to the franchisee community at large.

Please contact Sheldon Smith at sheldon.smith5@verizon.net or 215-750-0178 if you would like to contribute an article to Avanti.

64

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from page 64

on January 1, 2020, the “e U.S. Department of Labor’s final threshold for time-andovertime rule, which takes effect Janua-half pay will increase to $35,568 from $23,660, ary 1, 2020, will increase the threshold a level set in 2004. The for time-and-a-half pay to $35,568 article states that on avfrom $23,660, a level set in 2004.” erage the convenience and fuel retailing indus(1), they receive a discount over the try already pays store managers more credit price for fuel with the debit card than the federal minimum threshold (2), and “it's just what I'm used to’ (3). for overtime pay. The average salary For the 37 percent who use credit cards for c-store managers is $45,179, acas their primary fuel payment method, cording to NACS State of the Industry cash back rewards are the top reason to Compensation Report of 2018 Data. use credit rather than debit.

The increased salary threshold likely will be felt at the assistant manager level, where the average salary is $29,533.

Debit Cards Over Credit At The Gas Pump Despite 91 percent of respondents having at least one credit card, more than half (51 percent) use debit cards instead as their primary method of payment at the gas pump, according to GasBuddy’s Fuel Payments survey.

Only 37 percent of participants use credit cards as their primary fuel payment method. The top reasons respondents use debit cards for fuel payments include that debit cards are easy to use

Consumers Prefer Cash To Pay For Small Purchases

Consumers prefer to use cash for purchases of less than $10, despite other more convenient options, according to a new CreditCards.com poll. In fact, 49 percent of U.S. adults usually pay “49 percent of with cash, 35 per- U.S. adults cent with debit usually pay cards and 16 percent with credit with cash, 35 cards. The same percent with pattern held with debit cards only those who and 16 perowned rewards credit cards: 43 cent with percent said they credit cards.” preferred cash, 31 percent debit and 26 percent credit. Although using a contactless card or mobile payment for a small purchase is quick, easy and secure, U.S. consumers evidently aren’t ready to change.

The poll further reveals that concontinued on page 68

66

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from page 64

• Sheetz and Cumberland Farms were the only two c-store chains to make it on Fortune Magazine’s 75 Best Workplaces for Women list. Sheets ranked No. 58, while Cumberland Farms came in at No. 73. To determine the Best Workplaces for Women, Fortune analyzed anonymous survey feedback representing more than 4.6 million U.S. employees. • Sam's Club has launched a health care pilot program to offer members in Michigan, Pennsylvania and North Carolina bundles of services such as dental and optical, in partnership with a group of providers, reported The Hill. The plans are designed to help members access services they would otherwise skip because of high deductibles. • Nestle has set up a research institute to develop more environmentally friendly packaging for its products and reduce plastic waste, taking matters into its own hands rather than relying on its suppliers, reported Reuters. • McDonald's is expanding its McDelivery service across the country through a partnership with DoorDash, reported CBS News. Customers will be able to order home delivery from 10,000 McDonald's locations, including restaurants in small- and mid-sized cities. • A team of computer scientists at UC San Diego and the University of Illinois has developed an app that allows state and federal inspectors to detect credit card skimmers without needing to open up the gas pumps, reported UC San Diego News. • A new Wawa store in Washington, D.C. recently served as the location for the 100th NACS In Store event, reported NACS Online. NACS In Store, offers a full immersion experience to lawmakers who come out to learn more about the convenience store industry and the impact it has on the communities they serve.

• Starbucks has begun construction on a new location dedicated exclusively to mobile orders, reported CNN Business. The new store format—called “Starbucks Pick-Up”— will only accept orders from the Starbucks app. • continued on page 68

continued from page 66

tactless cards and mobile payments aren’t commonplace. Despite the fact that contactless cards and mobile payments offer consumers a fast, secure way to pay, only 39 percent of respondents with rewards credit cards have used mobile payments, and just 14 percent have used a contactless card. Millennials are leading the way with mobile payments. Out of those with rewards cards, 61 percent of millennials have used a mobile payments service, which is significantly more than both Gen Xers and baby boomers (44 percent and 24 percent, respectively).

Juul Is Spending Big To Defend Vaping In San Francisco Juul has spent $4.3 million since May to promote the ballot initiative it wrote, Proposition C, which would overturn San Francisco’s e-cigarette ban and instead restrict the sale of the products, reported the San Francisco Chronicle. Juul’s November 5 ballot measure is an attempt to do an end run around city officials who passed legislation in June suspending the sale of ecigarettes until they are reviewed by the Food and Drug Administration. Juul has maintained that its ballot measure would not overturn San Francisco’s ban on flavored tobacco and therefore not

“Juul has maintained that its ballot measure would not allow fruit and dessert-flavored nicotine pods to be sold in the city again.” allow fruit and dessert-flavored nicotine pods to be sold in the city again.

The company’s ballot initiative would require online retailers that sell e-cigarettes to San Franciscans to apply for a permit; require brick-and-mortar stores to use new age-verification technology to ensure customers are at least 21, the legal age to buy tobacco in California; and cap the number of e-cigarettes a customer can buy to two devices and five packs (20 pods total) of nicotine cartridges in one transaction in stores, and two devices and 60 milliliters (86 pods) per month online.

Juul said it is strongly supporting these efforts “because enacting the strongest regulations in the country will work to combat underage use and an ill-conceived and unpopular ban will simply fuel a black market for vapor products and the increased use of deadly cigarettes.”

Annual Cost of Employer-Provided Health Care Spikes The average total cost of employerprovided health coverage passed $20,000 for a family plan this year, reported the Wall Street Journal. Annual premiums rose 5 percent to hit $20,576 for an employer-provided family plan continued next page

68

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from page 66

In a sweeping plan to tackle climate change, Amazon has placed an order for 100,000 electric delivery vans from Michigan-based startup Rivian, reported The Verge. Amazon CEO Jeff Bezos said he expects 100,000 Rivian vans to be on the road by 2024. • Iowa-based convenience retailer Yesway recently announced that it has entered into a definitive agreement to purchase Allsup’s Convenience Stores, based in Clovis, New Mexico. Allsup’s has a portfolio of more than 300 stores across Texas, New Mexico, and Oklahoma. • The San Francisco Board of Supervisors recently passed a resolution declaring that the National Rifle Association is a domestic terrorist organization, reported the San Francisco Chronicle. • Trucking company failures are rising as faltering freight demand exposes operators unprepared for a downturn after last year’s red-hot shipping market, reported The Wall Street Journal. Approximately 640 carriers went out of business in the first half of 2019, up from 175 for the same period last year. • Wawa recently announced that in honor of the grand opening of its 200th Florida store, The Wawa Foundation will make three grants of $25,000 each to Children’s Miracle Network Hospital affiliates in Wawa’s market areas in Florida, to USO Chapters in Florida, and to Feeding Florida Food Banks. • Data compiled by researchers at Barclays show that following the national launch of Burger King’s plant-based Impossible Whopper, foot traffic at the burger chain increased 2 percent countrywide, reported CNBC. • PepsiCo's net revenue increased 4.3 percent in the third quarter, with big-name snack brands, Quaker and smaller premium brands boosting sales and profits, reported BakeryAndSnacks.com. • An “extreme beer” by Samuel Adams has such a high volume of alcohol that it is illegal in 15 states, reported the Patriot-News. Sam Adams brewed 77 wooden casks of Utopias beer, which has an alcohol by volume of 28 percent.

continued from previous page

in 2019, reveals a study by the nonprofit Kaiser Family Foundation. On average, employers bore 71 percent of that cost, while employees paid the rest. Employees’ costs rose at an even faster rate— the average annual amount workers paid toward premiums for the family plans grew 8 percent, to $6,015 this year. The average deductible for single coverage went up as well, to $1,655. For an individual employer plan, the average total premium cost was $7,188 in the 2019 survey, or 4 percent higher than last year.

launched Iqos in Nagoya, Japan, and Milan, in 2014 and has since introduced it in 49 markets. The Food and Drug Administration authorized its sale in the U.S. in April, setting strict marketing guidelines aimed at ensuring only adult smokers use Iqos, not kids. The device was formally launched in early October in Atlanta.

Altria Launches Iqos Tobacco Device In U.S.

Consumers Spend Less At Amazon Go

Marlboro maker Altria has finally launched Iqos in the U.S., and the company’s timing—though coincidental— couldn’t be better, reported CNBC. Iqos isn’t a vaping device or a cigarette. It heats tobacco, but doesn’t burn it, and is designed to give users the same rush of nicotine as smoking with fewer toxins.

The launch comes amid public panic over an outbreak of a vaping-related lung disease that’s killed at least 18 people.

Amazon Go shoppers spend on average between $7 and $15 per shopping trip, but baskets were higher at retailers like CVS, Walgreens and Rite Aid, where shoppers spent between $20 and $25 on average, reported Retail Dive.

Citing a 2019 Earnest Research report, the article also states that shoppers continue to spend more at larger grocery stores than at Amazon Go. The analysis indicated that consumers visit grocers like Kroger and Publix about 10 times per quarter (versus 2 to 5 times per quarter for Amazon Go) and spend $40 to $50 on average.

While Amazon attempts to penetrate the brick-and-mortar retail market, competitors are raising capital to open similar smart stores. Amazon plans to open 3,000 stores, but an RBC Capital research report estimates that the retailer could rake in between $1.1 million and $1.95 million per Amazon Go location.

“7-Eleven leads all U.S. retailers in website visits and Facebook and Instagram followers, but its site performance and bounce rates are below average.”

“Altria’s new tobacco device heats tobacco but doesn’t burn it, and it is not a vaping device or a cigarette.”

Altria and Philip Morris International started developing Iqos more than a decade ago when the companies were still combined, as smoking rates declined but long before vaping took hold in the U.S. PMI led the work once it was spun off from Altria in 2008. It

C-Store Digital Scorecard A recent study comparing top cstore retailers based on website performance, site traffic analytics, and social media engagement reveals that 7Eleven, Inc. leads all retailers in site visits, and Facebook and Instagram followers, but its site performance and bounce rates are below average, reported Convenience Store News. Comparing July 2019 metrics, the study by Ameex Technologies ranks Speedway LLC No. 1 overall with solid scores for website performance, site traffic, and social media engagement. Sheetz Inc., QuikTrip Corp., Kwik Trip Inc. and Wawa Inc. round out the top five.

Sheetz Launches 2nd Limited-Edition Craft Beer Pennsylvania convenience store chain Sheetz recently unveiled its “Project Brewberry Muffinz,” a new, limitedcontinued on page 70

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

69

continued from page 69

edition blueberry craft beer brewed in partnership with Philadelphia-based Evil Genius Beer Company. Available for a short time only, customers can purchase the beer at 99 Sheetz stores across Pennsylvania as of August 29.

Following the success of Sheetz’s firstever craft beer release in May, the new beer is a light-bodied blonde ale infused with Sheetz’s iconic Shweetz blueberry muffins. A small batch craft beer, Project Brewberry Muffinz will be available while supplies last and will not be restocked once sold out, the company said in a released statement.

Beer Delivery Boosts Pizza Hut’s Sales Few things go together as well as beer and pizza, and after seeing how much it has increased its sales, Pizza Hut is expanding its beer delivery service to more locations by the end of the year, reported The Motley Fool. It started out as a small test in Arizona in 2017 and expanded to 300 locations in seven states earlier this year. By January 2020, it should be in 1,000 stores—perfect timing just ahead of the Super Bowl in February.

“Pizza Hut’s beer delivery service is going so well that by January 2020 it should be in 1,000 stores.”

70

The original pilot program offered only Anheuser-Busch InBev brands, including Budweiser, Bud Light, Shock Top, as well as a local craft beer. Pizza Hut subsequently expanded it to include beer from Molson Coors' MillerCoors division, which supported the pilot with advertising. The response was overwhelming, from consumers and franchisees.

“CVP, McLane’s private label brand, debuted 40 new products at McLane’s National Trade Show in August.”

New Products Debuted At McLane Trade Show McLane Company, Inc. unveiled several new services and private label products during its annual National Trade Show (NTS), held August 21-22 at the Henry B González Convention Center in San Antonio, Texas. One of the star features of the NTS was the new 50x80 McLane booth featuring three pillars of McLane’s grocery business: Technology, CVP and McLane Kitchen.

Among the technology services McLane debuted were a back office management solution that is a one-stop-shop for retailers and all their technology needs, and is compatible with major POS solutions; a new tablet built with cstore operators in mind. It is water resistant and features a larger screen size, an IP67 rating (the highest level of protection from dust) and can store information for up to 25 stores; and a text notification feature on the Delivery Tracker application that sends a text message straight to a retailer’s smartphone if a delivery is delayed.

CVP, McLane’s private label brands subsidiary, debuted 40 new products at

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

this year’s show. McLane also hosted an interactive booth experience under the banner of McLane Kitchen, a foodservice solution for generating optimum sales and profits for retailers.

Wells Enterprises Purchases Halo Top Brand Wells Enterprises, Inc., the #2 ice cream manufacturer in the U.S. and manufacturer of the Blue Bunny brand, recently announced that it has signed a purchase agreement with Eden Creamery, LLC to acquire the Halo Top brand. This purchase expands Wells’ current portfolio to five distinct

brands, the company said in a released statement. Financial terms of the deal were not being disclosed. In connection with the purchase, Wells also has agreed to license the Halo Top brand outside of the United States and Canada to a new company that Doug Bouton, President & COO of Halo Top, plans to operate after closing.

BIG CROWDS AT THE DELAWARE VALLEY FOA TRADE SHOW Franchisees and vendors filled the venue floor to capacity at the Delaware Valley FOA Trade Show, held on September 19 at Caesars Atlantic City in New Jersey. Besides 7-Eleven storeowners, Sunoco and Lukoil franchisees were also invited and in attendance. 7-Eleven franchisees were offered free rooms and given gift cards, courtesy of the Delaware Valley FOA. Attendees saw the latest and hottest products on the market, while vendors walked away with substantial orders made by franchisees.

Special guests included NCASEF Chairman Jay Singh and Executive Vice Chair Michael Jorgensen, as well as New Jersey State Senator Chris Brown, who commended the DVFOA franchisees for supporting their communities and for holding the event in Atlantic City.

The trade show was followed by a banquet featuring great food, an Asian dance troupe, raffle giveaways with fabulous prizes, fantastic music, and lots of dancing. During the celebration, the DVFOA honored NCASEF Chairman Jay Singh with its Leadership Award, presented by Senator Chris Brown, for being a role model to small business operators nationwide.

The DVFOA thanks its Board of Directors, President Manzoor Chughtai, Vice President Bilal Barqawi, Secretary Piyush (Peter) Patel, and Treasurer Vincent Emmanuel, for their hard work behind the scenes to make this trade show a grand success.

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

71

SEI LAUNCHES MOBILE CHECKOUT SEI recently introduced Mobile Checkout in 33 locations in New York City. Mobile Checkout allows customers to skip the checkout line and pay for their purchases using the 7-Eleven app. The company said this new frictionless shopping experience is integrated into the 7Rewards loyalty program, and customers can automatically earn and redeem any available 7Rewards points or coupons, as well as in-store promotions.

In a released statement, SEI said it is the first cstore chain to develop proprietary technology for a full frictionless payment experience from start to finish. After testing mobile selfcheckout with employees at its Store Support Center store, the SEI piloted the “SEI said it is the first c-store chain concept in a handto develop propri- ful of Dallas locations in 2018 to etary technology get customer for a full frictionfeedback, conduct less payment real-world tests experience from and refine the start to finish.” process.

Mobile Checkout is just one of the digital technology enhancements 7-Eleven has made available to consumers. Others include: offering various mobile payment options at the register (Apple Pay, Google Pay and Samsung Pay); expanding the 7Rewards customer loyalty program to a wider range of eligible purchases; presenting AR (Augmented Reality) experiences; offering in-store package

FIRST 7-ELEVEN MALL STORE pickup via the 1,100 Amazon Lockers located at participating 7-Eleven stores; and expanding the 7NOW proprietary delivery smartphone app to more markets and adding 7NOW PINS for delivery to public places and spaces.

SEARCH FOR ‘BRANDS WITH HEART’

SEI recently opened its first U.S. mall location at the Westfield Brandon mall in Florida, reported Patch.com. The grand opening celebration kicked off at noon with a ribbon-cutting ceremony and was followed by an afternoon of product sampling, prize drawings, giveaways and other activities. The Brandon location marks the first of eight mall stores set to open in 2019, according to the article. The store will be open from 8 a.m. to 10 p.m. Monday through Saturday, and 10 a.m. to 7 p.m. Sunday.

SEI held its second annual emerging brands event— Brands with Heart—at its Store Support Center in Irv7-ELEVEN NAMED 2019 ing October 22-23, giving participating brands a chance to showcase their most innovative TECHNOLOGY LEADER products while engaging with SEI corporate OF THE YEAR leaders. This event provides 7-Eleven an opporConvenience Store News has selected 7tunity to learn more about new products reEleven as its 2019 Technology Leader of the shaping the industry and how they might better Year, the trade publication reported. This anserve the 8 million U.S. customers who visit its nual award goes to a technology leader (instores each day. This year, 65 emerging brands dividual or company) who not only were invited to make their case about why they contributes to the success of their organizadeserve a spot on 7-Eleven store shelves, as well tion, but also to the advancement and as learn about the convenience retailer’s history growth of the convenience store industry as of innovation. a whole, CSNews stated. 7-Eleven’s recent The Brands with Heart tech highlights include: event incorporates • The addition of 7NOW Pins to its “Sixty-five workshops, an expo 7NOW delivery app. The proprietary emerging brands and keynote sestechnology allows customers to were invited to make sions with industry receive deliveries where it's contheir case at 7-Eleven’s experts who dive venient for them, from parks and deep into the im- emerging brands event beaches to sports fields and enterwith company portance of emergtainment venues. ing brands in the executives.”

• The Mobile Checkout platform, retail industry. Keynote which grew out of a test of a Scan & Pay speakers included SEI Chief checkout platform in Dallas. The frictionless Merchandising Officer Jack Stout and shopping experience lets customers skip the Founder of Fuze, Body Armor, Core and A checkout and pay for their purchases using Shoc Lance Collins. The two-day experience the 7-Eleven app. closed with an informal networking session • The continued expansion of its payment opwhere entrepreneurs exchanged ideas with tions to now include Apple Pay, Google Pay the 7-Eleven merchandising team. and Samsung Pay. continued next page

72

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from previous page

• The use of augmented reality (AR) promotions, such as the “Field Goal Challenge” AR experience with Dr Pepper to kick off football season.

7-Eleven was honored at the 2019 Convenience Store News Technology Leadership Roundtable & Dinner, held at the CNN Center in Atlanta on October 1.

NERDS CANDYFLAVORED SLURPEE SEI has collaborated with Ferrara Candy Company on the first Nerds-flavored Slurpee drink. The limited-time flavor is a mashup of two of Nerds’ most iconic flavors—Strawberry and Grape. To promote the new flavor, two Slurpee trucks disguised as yellow school buses full of the whimsical NERDS characters will visit college campuses and sporting events to hand out free cups of the grape strawberry Nerds-flavored Slurpee and packages of Nerds candy. The Nerds Slurpee 2019 College Tour will make stops in Texas and Midwest states throughout the fall.

Participating 7-Eleven stores are also offering a limited-time value price of $1 on medium-sized Slurpee drinks. The offer can be redeemed through the 7Rewards loyalty program in the 7-Eleven mobile app. Each Slurpee drink purchase also counts in the ongoing 7Rewards “buy six-get seventh cup free” loyalty offer.

7-ELEVENS OPEN INSIDE CALGARY AIRPORT 7-Eleven Canada recently announced the arrival of two new convenience stores at Calgary International Airport. Open 24/7 and located in the Domestic Terminal, Concourses A & C, both stores will serve travelers and airport employees who are quickly on-the-

go, as well as those waiting to pick up travelers, the company stated in a press release.

The stores are conveniently located as travelers arrive to take off for a flight, or as they step off the aircraft, offering a wide variety of “hot from the oven in minutes” pizza, wings and hot snacks, fresh to go sandwiches and meals.

MIXOLOGY INSPIRED DONUTS & CUPCAKE 7-Eleven recently introduced new premium baked goods inspired by cocktail favorites. The decadent—and alcohol free—donuts and cupcakes are made fresh daily in local kitchens, introducing customers to top-shelf taste with a mixology twist. The three top shelf bakery items are available at participating 7-Eleven stores for a limited time: • Piña Colada Cupcake—Extra moist, white cupcake with banana and pineapple, filled with piña colada-flavored filling and piña colada icing topped with coconut and gold sugar. It is also the first ever cupcake available nationwide in 7-Eleven’s fresh bakery assortment.

“Piña Colada Cupcake is the first ever cupcake available nationwide in 7-Eleven’s fresh bakery assortment.”

• Bourbon Maple Praline Yeast Donut—This yeast donut is covered with rich maple and

bourbon-flavored icing, topped with praline pecans and drizzled with white icing and gold sugar.

• Cinnamon Fire Bomb Cake Donut—A cake donut with cinnamon glaze, topped with red and gold sugar crystals.

Located on the top shelf of the bakery case, these premium limited-time treats have a suggested retail price of just $1.99. They can be paired with any size cup of coffee or other hot beverage (pumpkin spice is back!) for just a dollar during 7-Eleven’s fall coffee promotion.

7-ELEVEN CANADA OFFERS FREE HOT BEVERAGES 7-Eleven Canada announced that it is now offering registered 7Rewards members free small hot beverages on the 7th and 11th of every month until the end of the year. The company said fans can try the limited edition, tasty assortment of hot beverages available at 7-Eleven Canada this fall including: Pumpkin Spice Latte, Hershey's SKOR Hot Chocolate and Mexican Hacienda Miravalles Organic Coffee. Back by popular demand, customers will also be able to enjoy 7Eleven's Rainforest Alliance Certified 100 percent Caldas Colombian Coffee, and come November, the delicious Peppermint Mocha. continued on page 74

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

73

continued from page 73

SEI FIELD EMPLOYEES GET MOBILE OFFICES SEI recently announced that it has armed its field employees with Microsoft Surface devices equipped with Microsoft 365 and Power BI to provide franchisees with better insight from corporate into their store's performance, purchase trends and other data to help them grow their business. In a released statement, SEI explained that Power BI dashboards help field employees to spot trends and visualize insights from point-of-sale data stored and analyzed by Azure Data Lake and Azure SQL Data Warehouse. This enables them to recommend actions to franchisees, boosting sales and ensuring the right products are stocked to meet customer demand.

With Surface as the field employees' mobile office, Microsoft 365 ensures that this group of employees— which doesn't often have the opportunity to connect to the corporate network—are empowered with an integrated, secure, AI-infused experience on any device, SEI said. Microsoft OneDrive also helps make sure that they have real-time access to the latest corporate assets. In addition to empowering employees with modern technologies, SEI said it is migrating its infrastructure to Azure and already leveraging advanced technologies like AI to power enhanced customer experiences.

7-ELEVEN MALAYSIA SALES INCREASE 7-Eleven Malaysia has boosted sales by 7.2 per cent in the first half of this year, aided by new store openings, increased promotions and a higher average spend per customer, reported Inside Retail Asia. The company has 74

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

2,323 stores and plans further openings in the second half of this year. For the six months to June 30, 7-Eleven Malaysia group revenue reached RM1.17 billion (US$277.9 million). Revenue from its food-service business surpassed 3.5 percent of the group’s total, an increase of more than 30 percent year-on-year. Gross profit improved 8.5 per cent year-on-year, despite expenses related to store openings.

NEW SLURPEE LITE FLAVOR 7-Eleven stores have a new Slurpee Lite flavor that's on fire: Glaceau vitaminwater fire. The newest Slurpee Lite drink is naturally flavored, contains less sugar, is fortified with vitamins B3, B6 and B12, and an 8-ounce serving has just 20 calories. Inspired by the bottled vitaminwater fire, the Slurpee drink is described as a spicy watermelonlime flavor with a touch of jalapeno and habanero that sparks a “slight tingling sensation.” Glaceau vitaminwater is a 7-Eleven top-selling non-carbonated, flavored water.

7-ELEVEN & MONDELÉZ WIN AWARD A collaboration between SEI and Mondeléz International won a 2019 Shopper Marketing Effie Award in the New Product/Service Introduction (Bronze) category, reported CSNews Online. As part of an effort to bring excitement back to the Oreo cookie brand, particularly among millennial shoppers, Mondeléz’s in-depth program spread Oreo's new mint flavor across multiple categories in 7-Eleven stores. 7-Eleven

was able to offer an exclusive drink, the Oreo Mint Hot Chocolate, as well as Oreo Mint king-size Oreo cookies, Oreo Mint donuts and Oreo Mint chocolate candy.

As a result of the partnership and associated PR campaign, the Oreo cookie brand experienced a 30 percent bump in sales compared to the year prior. The brand also saw a specific increase in 7-Eleven sales short of a full percent, which was a significant jump from an 11 percent deficit the previous year.

First launched in 1968, the Effie Awards honor the most effec“The Oreo cookie tive advertising brand experienced efforts and the companies and a 30 percent bump individuals who in sales as a result are responsible of SEI/Mondeléz marketing efforts.” for them.

7-SELECT WINS THREE TOP PRIVATE BRAND AWARDS SEI has announced that three 7-Selectbranded products have received 2019 “Salute to Excellence” awards, the Private Label Manufacturers Association's (PLMA) highest honors. This year's 7-Eleven winners are: 7-Select Gourmet Snack Trio—Genoa Salami, Provolone Cheese & Olives (Category: Deli/Prepared Foods/Meal Kits); 7-Select French Macarons—Vanilla & Raspberry (Category: Cookies & Crackers); and 7-Select Fresa Paleta—Strawberry Fruit & Cream Frozen Bar (Category: Mexican/Latin American Foods). For this year's competition, PLMA had 750 product submissions and 60+ retailers represented, a record number for both.

Organic Torie & Howard Chewie Fruities Candies Torie & Howard is a producer of all-natural, organic candy designed to satisfy consumers with discriminating palates who crave healthy, yet indulgent, snacks. Chewie Fruities Candies are vegan, dairy free, gluten free, soy free and free from artificial flavors and colors.

Chewie Fruities Candies are healthy and Chewie Fruities flavors featured indulgent snacks. here are Sour Apple and California Pomegranate & Sweet Freestone Nectarine in our 2.1oz Stick Packs. One serving provides the 200 percent daily requirement of Vitamin C. Made in the USA. McLane UINs: Pomegranate Stick—58757; Sour Apple Stick—58767.

Swisher Sweets Passion Fruit Cigarillo Available Now Ignite your customers’ passion with Swisher Sweets Passion Fruit. This Limited Edition cigarillo is now available, providing an

POPULAR PUMPKIN PIE POP-TARTS ARE BACK

exotic blend of passion fruit and the tropical sweetness of mango that offers an unforgettable unique taste.

Swisher Sweets Passion Fruit is available in a resealable 2-count pouch with the “Sealed Fresh” guarantee. It is ready for shipment to stores nationwide and is offered in “2 for 99¢”, “Save on 2”, “2 for $1.29” and “2 for $1.49” options.

To place an order, contact your Swisher representative at 1-800-874-9720.

Ignite your customers’ passion with Limited Edition Swisher Sweets Passion Fruit cigarillo.

Roll With Swisher Sweets Purple Swish Let your customers ‘Roll with Swish’ as Swisher Sweets Purple Swish is now available as a special blend cigarillo, providing a flavorful combination of the subtle sweetness of raspberry with the classic Swisher Sweets Purple punch of grape. Available Swish, available as a in a resealable two-count special blend cigarillo. pouch with the “Sealed Fresh” guarantee, Swisher Sweets Purple Swish is ready for shipment to stores nationwide. It is offered in “2 for 99¢,” “Save on 2,” and “2 for $1.49” options. This product is also available in a “2 for $1.29” option for select markets. This special blend is only available for a limited time, so stock up today and roll your way to increased sales and profits with Swish. Place your order, or contact your Swisher representative at 1-800-874-9720.

Kellogg’s Pumpkin Pie is the #1 retail seasonal favorite flavor from Pop-Tarts (Harris Poll Nielsen, Equitrend Brand Equity Study). This hand-holdable snack features pumpkin pie-flavored filling with cinnamon, nutmeg, ginger and cloves surrounded by a golden crust and topped with sweet, white icing and fall-colored crunchlets. Great to eat on-the-go any time of day.

Pumpkin Pie is the The easy-to-merchandise counter #1 Pop-Tarts seasonal flavor. display holds 24 packs and can be strategically placed near the coffee bar or checkout for increased basket rings. The buzz of this annual flavor starts on social media at the first sign of fall and gains momentum through November.

Don’t miss out on offering this wildly popular, limited edition, seasonal winner from Pop-Tarts at its peak of popularity.

International Delight Peppermint Mocha Creamer It’s the mocha wonderful time of the year! Get ready to be delighted with this delicious seasonal flavor from International Delight—the sweet flavors of peppermint and mocha now available in a perfectly continued next page

76

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9

continued from previous page

International Delight’s popular seasonal Peppermint Mocha Creamer is back.

portioned creamer single to create a peppermint party in your cup every time. This indulgent blend is gluten and lactose free, and with 0g trans-fat, it is always on the nice list.

Smirnoff Spiked Sparkling Seltzer Variety 12-Pack Grow your spiked seltzer sales with the Smirnoff Spiked Sparkling Seltzer Variety 12-pack.

Containing three each 12oz slims cans of Cranberry Lime, Berry Lemonade, Raspberry Rosé, and Piña Colada, the Smirnoff Spiked Drive your hard Sparkling Seltzer Variety 12-pack seltzer sales with the Smirnoff Spiked Sparkling Seltzer Variety 12-pack. has the highest seltzer basket spend and the most frequent purchase cycle.

FMBs at 7-Eleven are up +208 percent and Seltzers are driving the growth in this category. Smirnoff Spiked Sparkling Seltzer Variety 12-pack was recommended nationally on October 7 and will be featured in the P1 & P2 programs. Smirnoff Seltzer 12-pack has the most diverse consumer base of any of the top seltzers along with the highest basket ring and most frequent purchase cycle. Don’t miss this terrific opportunity to drive an additional $20 APSD.

strong lineup of exotic flavors and bring sweet new escapes to your confectionary aisle. Hi-Chew Fruit Combos will launch as part of an exclusive Find it First prebook opportunity with an ordering window scheduled for mid-November to early December and slated to hit stores at the end of January 2020.

The launch will be supported by social media, online and offline marketing, television ads, a Menchies Frozen Yogurt Exclusive later in the summer, and a 2 for $5 peg promo on all Hi-Chew peg bags throughout P2. Additionally, display shippers containing the Fruit Combos Peg Bags will be available throughout the year as FOA show deals.

Since the LTO in 2019, Hi-Chew Superfruit Mix has gone on to become one of Morinaga America’s fastest selling peg bags in the convenience channel and a superstar performer in your stores. Following that success, Hi-Chew Fruit Combos represents the next step in the evolution of premium chewy candy: even more Immensely Fruity, Intensely Chewy Hi-Chew.

New Jif Power Ups

Smucker Away From Home is excited to announce New Jif Power Ups, available in two varieties—Chewy Granola Bars and Stacked Granola Bars. Jif Power Ups are high-quality snacks, with peanuts as the first ingredient.

More than 2.5 million households have already purchased Jif Power Ups (IRI Panel TTL US All Outlet Dec 2018), so c-store operators can offer consumers what they’re looking for away from home.

Power Ups are peanut-first choices that are as satisfying as they are delicious. Chewy Granola Bars offer Creamy Peanut Butter and Chocolate varieties, while the Stacked Granola Bars are available in Super Following the incredible success S’Mores and Epic Chocolate. of the limited time offer launch of SuThese 1.3 oz individual packages perfruit Mix in 2019, Morinaga are a great portable, on-the-go America is now offering Hi-Chew snack. Sold in 15 count boxes, Jif Fruit Combos, a “Find it First at 7Power Ups are perfect to merchanHi-Chew Fruit Combos Eleven Exclusive” launching in P2 2020.

Find it First prebook dise for individual sale. Jif Power opportunity scheduled for Two completely new Hi-Chew flaUps Stacked Granola Bars Epic mid-November. vors debut in this bag: Tropical Smoothie Jif Power Ups are perfect to merchandise Chocolate was recently recognized as and Piña Colada. Tropical Smoothie contains Passion Fruit and for individual sale. a winning product for CStore DeciMango layers, while the Piña Colada pieces are packed with creamy sion’s New Product Contest in the “Snacks – Sweet” category. coconut and the ever-popular pineapple.

To learn more about the Smucker Away From Home full portfolio This new SKU is positioned to expand on Morinaga America’s of c-store products, visit www.smuckerawayfromhome.com.

Hi-Chew Fruit Combos A ‘Find It First’ In 7-Eleven

AVANTI S E P T E M B E R | O C T O B E R 2 0 1 9

77

foa events 7-Eleven FOAC Trade Show & Holiday Party Holiday Inn Skokie Skokie, Illinois November 14, 2019 Phone: 847-343-7777

Midwest FOA & Alliance FOA Holiday Show Chicago O'Hare Marriott Chicago, Illinois December 4, 2019 Phone: 847-971-9457

FOA Of Greater LA Holiday Party Royal Vista Golf Club Diamond Bar, CA December 7, 2019 Phone: 619-726-9016

Midwest FOA Holiday Show Detroit Marriott Troy Troy, Michigan December 10, 2019 Phone: 847-971-9457

UFOLINY FOA Holdiay Party Crest Hollow Country Club Woodbury, NJ December 16, 2019 Phone: 613-486-6266

San Diego FOA Christmas Party Hilton San Diego Del Mar San Diego, California December 14, 2019 Phone: 619-733-5917

Columbia Pacific FOA Holiday Party Embassy Suites by Hilton Portland Airport Portland, Oregon December 14, 2019 Phone: 360-513-0289

FOA Of Greater LA/ San Diego FOA 10th Annual Trade Show Pechanga Resort and Casino Temecula, California January 22, 2020 Phone: 619-726-9016

NCASEF

National Coalition Board Of Directors Meeting

Board meetings

Gaylord National Resort & Convention Center National Harbor, Maryland August 9-10, 2020

NCASEF 45th Annual Convention & Trade Show

National Coalition Affiliate Meeting

Gaylord National Resort & Convention Center National Harbor, Maryland August 10-13, 2020

Marriott DFW Airport South Fort Worth, Texas February 10-11, 2020

National Coalition Board Of Directors Meeting Marriott DFW Airport South Fort Worth, Texas February 11-13, 2020

South Nevada/Las Vegas FOA Trade Show

South Nevada/Las Vegas FOA 2020 Golf Tournament

Alexis Park All Suite Resort Las Vegas, Nevada April 8, 2020 Phone: 702-561-0311

Rhodes Ranch Golf Club Las Vegas, Nevada April 9, 2020 Phone: 702-561-0311

Columbia Pacific FOA Trade Show Double Tree Hotel Lloyd Center Portland, Oregon March 12, 2020 Phone: 360-513-0289

Columbia Pacific FOA Golf Tournament (Venue TBD) June 22, 2020 Phone: 360-513-0289

Advertiser’s Index

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

78

Anheuser Busch.................9

Danone ............................15

Loacker.............................36

Morinaga .........................65

Swisher International........3

Aon Risk Services.............21

Dean Foods......................22

Logic Ecig....................40-41

Pepsi Quaker.........5,6,44,45

Tell Industries...................42

Blu Ecigs...........................61

Diageo Guinness................7

Mars Ice Cream ................26

Perfetti Van Mele.............57

Think................................58

Blue Bunny/Wells............19

Hormel.............................17

Maruchan ........................29

Seneca........................10-11

White Castle.....................63

Bug Juice..........................25

JUUL....................13, cover 4

McLane ............................30

Simply Orange.................33

Windsor ...........................39

Campofrio..........................4

Kellogg's ..........................52

Miller................................55

Smuckers .........................67

Coca-Cola..............cover 2, 8

Living Essentials ..............75

Mondelez.........................34

Swedish Match...cover 3, 46

AVA N T I S E P T E M B E R | O C T O B E R 2 0 1 9