Stay Focused On Issues That Increase Franchisee Profits
Change is hard, and how we deal with change could determine how successful franchisees are as a group in the future. The convenience store industry continues to change every day, and 7-Eleven is no exception.
7-Eleven has rolled out Project E, a system-wide managerial reorganization that changes the company from 8 divisions to 14 zones, and centralizes accounting and merchandising, all in an effort to provide better service to our stores. The company has also started a new approach to store remodeling. Concentrated Market Rollout (CMR) has begun in the Northeast. In both areas entire markets are being remodeled in an attempt to take advantage of scale and advertising in a new approach to AQIP.
How 7-Eleven approaches the business with several of our key vendor partners also is rapidly changing. Over the past twelve months 7-Eleven started a complete review of how we do business with our CDC partners, piloted a new distribution model in Southern California, and signed a new five-year agreement with McLane, all in an attempt to provide transparency and improve profitability. What costs we pay for merchandise, what items we receive, and at what frequency we receive them, could all potentially change.
Additionally, our cigarette vendor relationship continues to evolve, due to the new Marlboro program and 7-Eleven’s efforts to take back the category. We have yet to see what impact this will have on our business. SEI and the National Coalition continue to work with FM Facilities Maintenance to address accounting and service issues. Significant changes to the accounting process have raised service issues and concerns about accuracy. Scan audits as part of the Business Transformation pilot in Los Angeles have raised accuracy concerns. A new software download changing the way we process SSIs is causing franchisees to take additional steps to have the items available that our customers want.
Dealing with just one of these issues could be overwhelming for franchisees. Tackling them all at the same time could cause us to lose focus on our main objective: raising franchisee profitability. 7-Eleven together with franchisees needs to evaluate what cumulative impact these changes will have on store operations and franchisee profitability both long and short term.
The 7-Eleven physical landscape is also changing. 7-Eleven has purchased 188 Wilson Farms stores in Western New York; the New England Pantry, which operates 58 White Hen Pantrys in the Boston area; 14 Mother Hubbard’s Cupboards in Illinois; and 183 Mobil on the Run stores in Florida and 17 in Chicago. This effectively takes what was an underdeveloped market in New York and turns it into a market that 7-Eleven dominates, giving growth opportunities to franchisees in a small market, while at the same time raising encroachment concerns in other markets.
Franchisee success depends on how focused we are on the issues that give us a return on investment, and how united we stay in encouraging SEI to work out those issues. We need to continue to raise concerns at the local and national levels about all issues facing franchisees, but we need to not lose sight of our primary objective. Making money at the store level needs to be everyone’s number one priority. SEI must also, at every level of the company, refocus on what drives sales and profits in our stores. Getting caught up in “the process” will surely drive us off course and distract us from taking care of the customer.
Offering solutions to problems and focusing on results ultimately will help us win in the end. 7-Eleven and franchisees need to be proactive in working together to understand what impact these many changes have on the stores, the system and our customers. I believe that if we don’t change, we could end up a statistic. If we don’t focus on specific issues with 7-Eleven, we could end up a casualty.
Franchisees made the company what it is today, and franchisees will keep 7-Eleven at the top of the industry. Doing what is right for the store profitability is always the right decision.