A Farewell Note

By Joe Rossi, NCASEF Board Member

Serving as the Executive Vice Chairman of the National Coalition of Associations of 7-Eleven Franchisees was never a role I envisioned holding for the long haul. My commitment from the outset was to serve a single term—a fleeting, yet pivotal, two years. In this compact span of time, we’ve journeyed together through many challenges and triumphs, each step forging a stronger, more unified path for our organization and the franchisees it represents.

I stepped into this role with a singular focus: to create a stronger, more collaborative path for our franchisees and the organization. Looking back, I’m proud to say we’ve accomplished much, turning aspirations into tangible realities.

One of the crowning achievements of our tenure has been establishing a robust line of communication with SEI and our valued vendors. Communication—clear, open, and constructive—is the cornerstone of any successful relationship. We’ve broken down barriers and built bridges, ensuring that the voices of our franchisees are not just heard, but listened to and acted upon. This dialogue has been instrumental in driving change and creating a spirit of cooperation.

This newfound communication has also served as a beacon of resolution for various store-related challenges. By giving us a voice in our dealings with vendors and SEI, we’ve seen a transformative shift in how business is conducted. Issues that once seemed insurmountable are now being addressed with a “Team 7-Eleven” mentality, leading to solutions that benefit all parties involved. This open channel of communication is a testament to what can be achieved when we listen, engage, and work together towards common goals.

Our ties with SEI and vendors have blossomed into a partnership based on mutual respect and understanding. These relationships are vital, not just for the here and now, but as a foundation for the future. We’ve paved a road that others can travel on, a road lined with the prospects of growth, innovation, and shared success.

As I pass the baton to the new Executive Vice Chair, Mr. Nick Bhuller, I do so with a sense of fulfillment and hope. The journey doesn’t end here; it merely takes a new turn. I won’t be at the helm, but I’ll be there, among you, as a Board member, as a colleague, and as a friend. The seeds we’ve sown together need nurturing to blossom, and I have no doubt that the NCASEF Board and all our franchisees will continue this good work.

Let’s keep the dialogue flowing, the partnerships thriving, and our collective vision alive. As I step into a new role, I do so with the confidence that NCASEF is in capable hands. Together, we’ve laid a solid foundation. Now, it’s up to all of us to keep building upon it, to reach new heights, and explore new horizons.

I extend my deepest gratitude to each one of you. It’s been an honor and a privilege to serve alongside Chairman Sukhi Sandhu, the officers, and the NCASEF Board. Here’s to continued success, growth, and collaboration.

 

 

Keys To Managing Multiple 7-Eleven Units Efficiently

By Teeto Shirajee, NCASEF Vice Chairman

In the bustling world of convenience store management, particularly within the framework of 7-Eleven franchises, steering the ship of multiple stores demands not only traditional managerial expertise, but also a refined understanding of multi-unit operations. As we dive into the strategies for managing multiple 7-Eleven stores, it’s crucial to recognize that the success of each store hinges on a harmonized approach, blending individual store needs with overall brand standards and objectives. Here are some tailored approaches:

  1. Set Clear Goals Across All Units: Establishing and communicating clear objectives across your stores ensures a unified direction. This alignment is crucial in a multi-unit environment, where each team should be aware of the common goals.
  2. Prioritize Tasks Across Locations: Understanding which tasks are most critical in each store and allocating resources accordingly is key. This might mean focusing on high-traffic locations during peak hours or ensuring inventory efficiency in stores with higher sales volumes.
  3. Delegate Responsibly: Assign responsibilities based on individual strengths and the specific needs of each store. Effective delegation is critical in a multi-store scenario, allowing you to focus on overarching strategies and decision-making.
  4. Master the Art of Communication: Effective communication is the backbone of managing multiple locations. Regular check-ins, clear directives, and a culture of openness keep everyone on the same page and foster a sense of team unity.
  5. Lead by Example and Establish a Benchmark: Your actions set the tone. Demonstrating punctuality, organization, and professionalism across all interactions instills a standard for your teams to emulate.
  6. Empower Your Teams: Trust your staff to make decisions and manage day-to-day operations. This empowerment not only boosts morale, but also ensures each unit operates smoothly even in your absence.
  7. Embrace Continuous Learning and Adaptability: Stay abreast of industry trends and be open to feedback. The convenience store landscape is always evolving, and so should your management strategies.
  8. Effective Time Management: Implement time management strategies that cater to the unique needs of managing multiple units. Balancing immediate needs with long-term strategies is vital.
  9. Navigate Conflicts and Challenges with Diplomacy: Addressing conflicts and challenges swiftly and fairly is especially important in a multi-unit environment, where issues in one store can have ripple effects on others.
  10. Prioritize Self-Care: Managing multiple stores is demanding. Prioritizing your own well-being is essential to maintain the energy and focus needed for this challenging role.

Managing multiple 7-Eleven stores is an intricate dance of balancing individual store needs with a collective vision. It’s a journey of continuous learning, adaptation, and commitment to excellence. Remember, in the world of multi-unit management, the whole is indeed greater than the sum of its parts.

 

Our Journey So Far

By Sukhi Sandhu, NCASEF Chairman

Over the past two years, leading the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) as its chairman has been an enlightening and transformative experience. When I first stepped into the role of chairman, I was greeted by an organization in need of significant change. My focus was clear: to steer NCASEF away from the political arena it had inadvertently entered and towards a new mission: working with all store’s and NCASEF’s stakeholders to improve the system.

Our first major undertaking was to overhaul our operational framework. We restructured how meetings are conducted—creating a more effective and efficient environment—and transformed the very culture of NCASEF. We moved away from a politically charged atmosphere to one where business discussions are center stage. System issues and concerns are now addressed head-on, and we opened constructive dialogues with our franchisor so we could work together to enhance our brand.

Our interaction with vendors saw a significant shift, as well. We expanded our Affiliate Program membership, embracing companies big and small, and recognized the unique opportunities our 7-Eleven stores could leverage. This expansion was both in numbers and in the quality of relationships we built. Our focus was to create a symbiotic environment where vendors, franchise leaders, and SEI could network and discuss business, cultivating a sense of community and mutual growth.

The increase in engagement wasn’t confined to the national level—local FOAs experienced a newfound vibrancy, as well. Our approach was twofold: firstly, to support the local FOAs more actively than in previous years, and secondly, to ensure our national initiatives resonated at the store level. This effort was evident over the last two years in local FOA trade shows and the national convention, which saw record attendance and participation from both franchisees and vendors. It was a clear indication of the renewed trust and enthusiasm within our brand.

Financially and operationally, we made strides in addressing significant challenges. One of our notable achievements was the resolution of the AR Gap. This issue had been a thorn in the side of our franchisees, distributors, and 7-Eleven corporate, complicating financial management and operational efficiency. Through collaborative efforts and open dialogue with SEI the AR Gap was resolved and Store Check-In Simplification was deployed, thus simplifying the financial aspects of running a 7-Eleven store, and providing peace of mind and stability to our franchisees.

Another significant achievement was working with SEI to create a captive insurance program, tailored specifically for our franchisees. In an industry where liability insurance is a significant concern, especially now with many insurance companies opting not to continue BOP insurance for c-store owners, this initiative offers a sustainable and beneficial alternative to conventional insurance options. Our captive insurance program, called National Captive Insurance Solutions (NCIS), is owned by franchisees and administered by insurance firm Marsh. Its purpose is to provide coverage and value for our stores, and not to make a profit. It’s also a statement of NCASEF’s commitment to the welfare and stability of our franchise community.

Understanding the challenges of employee acquisition and retention in the retail sector, we also introduced perks that franchisees can offer to attract new employees and retain current staff. Benefits like comprehensive employee health insurance and special mobile phone service prices via a partnership with T-Mobile has helped to alleviate labor issues for many franchisees, and with the help of SEI we introduced the Paradox talent recruitment platform at a very reasonable price.

Our relationship with SEI underwent a remarkable transformation during my tenure. We focused on building a partnership based on open dialogue and mutual respect. This was not about one party asserting dominance over the other, it was about finding common ground and working towards shared goals. By improving these relationships, we managed to eliminate the previous discomfort and hesitancy surrounding joint initiatives, leading to successful outcomes.

A hallmark of my tenure as chairman has been the establishment of NCASEF committees, a significant accomplishment that has fundamentally reshaped our organization’s approach to problem-solving and strategic planning. These committees, composed of dedicated and knowledgeable Board members, have been instrumental in identifying and addressing critical issues within our system. They function as think tanks, bringing together diverse perspectives and expertise to tackle everything from operational challenges to vendor relations. The success of these committees underscores our commitment to collaborative and inclusive leadership, setting a new standard for how we operate and advance as an organization.

In addition, our focus on retail initiatives has been unwavering. We’ve always been on the lookout for the “next big product,” akin to the success stories of Red Bull and Monster, which started as Non-Recommended Items (NRI) in our stores and serve as perfect examples of retailer initiatives. This mindset has been fundamental in keeping our brand dynamic and ahead of market trends.

Among the other pivotal changes over the last two years was the emphasis on encouraging franchisee participation in key SEI events and committees. For instance, the 7-Eleven Experience (7EE). Recognizing the immense value in this event, we actively encouraged our franchisees to attend. Our view is that the 7EE is not merely a corporate event, but a platform for learning, networking, and gaining insights into the latest 7-Eleven trends and practices. By promoting a greater sense of involvement and ownership, we saw record attendance from the franchise community at last year’s event.

Moreover, we placed significant emphasis on the involvement of franchisee leaders in SEI-led committees, such as the National Business Leadership Council (NBLC). This involvement is crucial as it provides a voice for our franchisees in decision-making processes and allows for a more collaborative approach to addressing challenges and opportunities in our business. By participating in these committees, our leaders could directly contribute to and influence key business strategies, ensuring that the interests of our franchisees are well-represented and aligned with the broader objectives of 7-Eleven. Our FOA leaders are equally encouraged to participate in any of the numerous NCASEF committees that engage regularly with SEI directors and managers to resolve store issues.

This strategy of increased involvement and engagement has been a cornerstone of my tenure. It’s not only about being part of the conversation, it’s about shaping the future of our franchisees and the brand as a whole.

Perhaps one of the most heartfelt changes we implemented was our approach to charity. Before our administration, there was no significant engagement in charitable activities that connected with local FOAs and the stores themselves. We bridged this gap by partnering with Children’s Miracle Hospitals, ensuring that not only 100 percent of our fundraising proceeds go to the cause, but also that the impact of our charitable efforts is felt at the local level with area children’s hospitals benefitting. This initiative is a testament to our belief that a responsible organization must be an active member of its community.

As we stand on the cusp of more changes and advancements, it’s crucial to reflect on the other areas where we’ve made a significant impact. For instance, our efforts in legislative engagement have been substantial. We didn’t shy away from taking a stand on critical issues like swipe fees, credit card charges, and tobacco laws. Our collaboration with government affairs teams and vendors at various levels—local, city, and state—has been pivotal in addressing the legislative challenges that our business faces.

Additionally, the transformation within our national convention has been remarkable. We revolutionized our trade show ordering system, enhancing its accuracy and reliability, which in turn boosted vendor confidence and increased order volumes. It also allowed stores to take advantage of products at discounted costs. This was a tangible improvement that benefited both franchisees and vendors.

Perhaps one of the most significant shifts under my leadership has been the change in our collective mindset. We’ve embraced a culture of positivity and solution-oriented thinking. We’ve actively combated negativity, choosing instead to see the glass as half full. This attitude has been infectious, permeating every aspect of our operations and significantly impacting our relationships with franchisees, vendors, and SEI.

Looking ahead to the challenges of 2024 and beyond, our mindset remains unwaveringly positive. We understand the complexities of our industry—the inflationary pressures, the changes in consumer spending, and the need for operational efficiency. Yet, our approach is to face these headwinds together, as a unified force. We are committed to working with our vendors to maintain competitive costs, thereby ensuring the best execution of promotional activities and product movements.

The future does hold challenges, but it also holds immense potential. We’ve made it our mission to be at the forefront of industry innovations, whether it’s in product categories, store operations, or customer engagement. Our focus is not only on navigating the present, but also on shaping the future of our brand and taking it to the next level.

 

 

FTC Poised To Issue Sweeping Regulation Of Online Reviews

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

In June 2023 the United States Federal Trade Commission (FTC) issued a proposed rule which would prohibit certain practices regarding what it characterizes as deceptive or unfair consumer reviews and endorsement practices. This closely followed the FTC’s issuance of written guidelines concerning the use of endorsements and testimonials in advertising, which do not have the power of a regulation.

The FTC has broad powers to regulate commerce and in particular to protect consumers from unfair and deceptive acts and practices. This authority led to the issuance of a FTC Franchise Rule, first enacted in 1979, which requires a franchise disclosure document to be delivered to a prospective franchisee before that person signs an agreement or pays any money.

This proposed regulation comes in the context of the ubiquitous nature of online reviews in all businesses, including those that are franchised. Industry research shows that 95 percent of customers using online reviews state that negative reviews have influenced their decisions. More than half of all customers read at least four reviews before making a purchase, and half of all consumers trust online reviews as much as personal recommendations from friends or relatives.

The FTC posited $1.321 trillion in estimated sales of goods or services for which consumers incorporate reviews into their decision-making and that 10 percent of those sales were the product of review manipulation, yielding total consumer damages of more than $1 billion per year.

One commenter to the proposed rule, The Transparency Company, stated that 54 percent of consumers say that they would not buy a product if they suspected it to have fake reviews, and estimated that consumer injury from fake reviews could be as much as $5 billion per year.

This is, of course, quite relevant to all 7-Eleven franchisees because there are a variety of websites which feature reviews of both corporate and franchised locations. One such website that I consulted listed 10 7-Eleven locations in a particular community, which collectively had 330 reviews apparently written by customers with an average score of 3.6 stars out of 5. A review of SEI’s website listing corporate stores for sale yields similar scores.

The FTC website states: “Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”

This proposed regulation has been moving through the rulemaking process at breakneck speed. That is unusual because the principal players in the industry that provide platforms for such views are in favor of regulation. The FTC reports that Trustpilot, Google, TripAdvisor and Amazon alone collectively removed more than 300 million reviews from their websites in a single year because they were fraudulent, fake, or violated their internal policies.

It is important to note that this regulation will govern businesses and not consumers.

The comment period for the proposed rule expired at the end of September 2023 and while there can be no assurance that a final rule will be issued, and if so, when it will be issued, the consensus seems to be that a final rule will be issued sooner rather than later.

While we don’t know what form the final rule will take, it appears quite likely that it will contain most or all of the following prohibitions.

  1. Selling or obtaining fake consumer reviews and testimonials. A business may not sell or create reviews that report to be authored by individuals or entities that do not exist, did not patronize the business, or misrepresent their experience with the product.
  2. Review hijacking. A business cannot take a positive review for a particular product and make it appear that it is a review of a substantially different product.
  3. Buying positive or negative reviews. It would be an unfair and deceptive practice to provide compensation or any other incentive in exchange for the creation of a consumer review that expresses an opinion, whether negative or positive. For example, a business owner cannot pay or otherwise compensate their employees to write positive reviews for their business or negative reviews for a competitor.
  4. Insider reviews and consumer testimonials. An officer or manager of a business must conspicuously disclose his or her relationship to a business for which he or she provides a consumer review. There must also be a similar disclosure of any instance in which an officer or manager solicitates or demands a consumer review from any employee of the business.
  5. Company controlled review websites. If a business chooses to operate its own website, it cannot falsely state or imply that the website is independent of the business.
  6. Illegal review suppression. A business cannot use an unjustified threat of legal action, or make a false accusation to prevent the creation of a consumer review or cause for removal of a review. And a business cannot suggest or imply that the reviews on its website represent all or most of the reviews submitted if reviews are being suppressed based on their ratings or negativity.
  7. Selling fake social media indicators. Businesses cannot sell or purchase fake indicators of social media influence. This includes selling or purchasing followers, likes and reposts.

We are following these developments very carefully and once the final rule is issued, we will report on any changes or additional provisions that were not in the proposed rule.

 

This article is a general summary of a proposed new regulation and does not constitute legal advice. Each situation that might involve the subject matter of this article will be necessarily fact intensive and generalizations cannot and should not be made.
 

Strategies To Beat Inflation In The Retail Industry

By Teeto Shirajee, NCASEF Vice Chairman

In the dynamic world of convenience retailing, 7-Eleven franchisees face the ever-present challenge of inflation, which threatens to erode profit margins and disrupt operational efficiency. However, there are robust strategies that can be employed to counteract these challenges and ensure the sustainability and growth of our 7-Eleven franchises.

A critical step in this battle is stringent cost control. Franchisees must diligently scrutinize every expense, identifying avenues for cost reduction or elimination. This can range from renegotiating supplier contracts for better terms, sourcing more affordable alternatives for specific products, to adopting energy-efficient practices to slash utility and maintenance costs. These measures not only reduce outgoings but also enhance overall efficiency.

Inventory management is another vital area. Regular inventory analysis helps identify slow-moving or obsolete items. By minimizing excess inventory and concentrating on high-demand products, franchisees can optimize cash flow and reduce the negative financial impacts of holding unsold stock, particularly important given the interest costs on inventory.

Adopting price optimization techniques is essential. This entails analyzing market trends, competitor pricing, and customer behavior to determine the most effective pricing strategy for each product. Regularly reviewing and adjusting prices ensures franchisees do not miss out on potential profits and effectively mitigate the effects of inflation.

Strategically selecting which vendor promotions and discounts to participate in can also be effective. Attractive deals on popular products can spur sales and sustain customer loyalty, even amid rising prices. However, it’s crucial to strike a balance between enticing promotions and maintaining overall profitability.

Diversification presents a proactive way to spread the risks associated with inflation. This could mean expanding into new product lines or exploring new market segments. By diversifying, franchisees can reduce their dependency on a single product, market, or vendor, thereby cushioning the business against inflationary pressures.

Building and maintaining strong customer relationships is indispensable. Exceptional customer service and personalized shopping experiences foster customer loyalty, helping your store stand out from competitors. Loyal customers are more likely to remain consistent purchasers, even in the face of price increases.

To summarize, effectively managing inflation as a 7-Eleven franchisee involves a multifaceted approach:

  1. Rigorous cost control.
  2. Strategic inventory management.
  3. Intelligent price optimization.
  4. Profit-focused promotions and discounts.
  5. Business diversification for risk spreading.
  6. Cultivating strong customer relationships and service.

By implementing these strategies, 7-Eleven franchisees can navigate the complexities of inflation, turning potential challenges into opportunities for sustained success and growth. This proactive approach not only helps in maintaining profitability, but also ensures a competitive edge in the convenience store sector.

 

The Vital Role Of Our NCASEF Committees

By Sukhi Sandhu, NCASEF Chairman

In the ever-evolving landscape and challenges of running a 7-Eleven store, the role of our NCASEF committees is crucial. They are the engines driving positive change and addressing store-wide issues, forming a vital link between our franchisees and SEI.

When I was first elected NCASEF Chairman, my primary goals were to change the culture of the organization into one of partnership and dialogue, and to create a platform where we as a group could work with our franchisor and vendor partners to improve the system to everyone’s benefit. I realized this could not be achieved by the officers of this organization alone. But I also realized the passion and knowledge within our Board of Directors are immense, and I knew this talent could be utilized.

As such, our committees are composed of franchisee leaders who bring a wealth of experience and insights from their stores. Committee members are selected for their expertise, dedication, and passion for improving the 7-Eleven system. Their chief responsibility is to identify, discuss, and propose solutions for a variety of challenges faced by our stores. Each committee is headed by a chairperson and is championed by one of our NCASEF officers, ensuring a robust support system for addressing issues efficiently.

The committees focus on diverse areas such as store operations, finance, technology, logistics, and government affairs. Many of our committees are dedicated to a specific aspect of store management—like Accounting/Finance, Digital/IT/7Now, and Facility Maintenance—while others focus on internal NCASEF matters like bylaws and membership, convention, and charity golf, thereby ensuring targeted solutions.

Working closely with SEI’s upper management, department heads and subject matter experts, our committees serve as vital communication bridges. They bring to light the issues faced at the store level and work with SEI to devise effective solutions. This collaboration is critical. It ensures that the voices of our franchisees are heard and considered in the decision-making processes that affect their businesses. Our committees’ authentic, on-the-ground insights are invaluable to SEI in understanding the practicalities and nuances of running a franchised 7-Eleven store.

Our committees operate on a dynamic and responsive model. Issues raised by members at local FOA meetings are escalated to the NCASEF Board, where they are then assigned to the relevant committee. The committee chairs play a crucial role in addressing these issues, working closely with SEI and other stakeholders to find solutions. These solutions are then communicated back down the chain, from the FOA presidents and vice presidents to the individual franchisees.

The effectiveness of our committees is evident in the progress updates they provide during every NCASEF Board of Directors meeting. These updates are comprehensive reports reflecting the ongoing dialogues and engagements with SEI. Each Board meeting, in turn, is an opportunity to review the progress on existing issues and to introduce new challenges identified by our franchisees. This constant flow of information keeps the NCASEF Board informed and involved in the problem-solving process. Additionally, our committees educate us on best practices—knowledge that our Board members can then take back to their respective FOAs.

It’s important to emphasize the constructive nature of our relationship with SEI. These meetings are not just about presenting problems, but are a platform for collective problem-solving and mutual growth. Over the last two years, we have seen significant positive changes coming from these dialogues, reflecting the effectiveness of our joint approach.

The work of our committees is a testament to the value of teamwork and communication. By working hand-in-hand with SEI, we are not just solving problems; we are strengthening the relationship between our franchisees and corporate. This collaborative spirit is at the heart of what we do at NCASEF. It’s about ensuring that our franchisees have the support, resources, and voice they need to thrive.

Our NCASEF committees are also a testament to our commitment to leveraging the shared talent and passion of our members. Their dedication and volunteerism are invaluable, making a significant impact on the effectiveness and success of our organization. As Chairman, I am immensely grateful for the hard work and contributions of these committee members, who continuously strive to affect positive change within the 7-Eleven system.

As we move forward, the role of our committees will continue to be central to our efforts in advocating for and supporting our franchisees. The challenges in the 7-Eleven system are ever-evolving, and so are the strategies and solutions needed to address them. With our committees at the forefront of these efforts, I am confident that we will continue to overcome challenges and seize new opportunities for the benefit of all 7-Eleven stakeholders.

 

The Power Of Respectful Dialogue

By Joe Rossi, NCASEF Executive Vice Chair

There’s no underestimating the power of open, honest, and respectful communication, especially when it comes to our interactions with representatives from 7-Eleven, Inc. (SEI). In my role as NCASEF Executive Vice Chairman, one of my key responsibilities is to ensure that the voices of our franchisees are heard, their concerns addressed, and their experiences shared. This is especially crucial when we’re in discussions with SEI, where our goal is not just to present our challenges, but to work collaboratively towards solutions that benefit everyone involved in this great system.

It’s important for us, as franchisee leaders, to express the pain points of our members. These are not just individual grievances or operational hurdles; they often represent broader, system-wide issues that can impact the success and sustainability of our stores. When we meet with SEI representatives, whether it’s during FOA meetings, NCASEF gatherings, or SEI-hosted committee meetings, we have a platform to bring these issues to light.

However, it’s crucial that these discussions remain civil and respectful. In any relationship, especially one as intricate and interconnected as ours with SEI, the tone of our conversations can set the stage for the outcomes. By maintaining professionalism and respect, we foster an environment where open communication is not just possible, but productive. This approach has helped us move away from confrontational standoffs and towards constructive dialogues, where both sides can express their perspectives, understand each other’s positions, and work together towards common goals.

In these discussions, it’s more beneficial to focus on global, system-wide issues rather than store-specific problems. While individual store challenges are certainly important, addressing broader issues can lead to changes and improvements that benefit a larger group of franchisees. For instance, discussing topics like inventory efficiencies, accounting system issues, or IT and Digital improvements can have a ripple effect, improving operations across all stores. These conversations can lead to strategic changes that elevate the entire brand, rather than just addressing isolated incidents.

This new era of open communication between SEI and franchisee leaders is not just about airing grievances; it’s about collaboration and partnership. It’s about coming together to identify challenges, brainstorm solutions, and implement strategies that propel our stores and the brand forward. We’ve seen positive outcomes from these discussions, including policy adjustments, improved support systems, and even the rollout of new programs that directly address the issues we’ve raised.

One of the key advantages of having these dialogues in formal settings like FOA or NCASEF meetings is the structured environment they provide. These forums allow for organized discussions, where issues can be presented systematically, and responses can be thoughtfully considered. Additionally, having these conversations in the presence of other franchisees and leaders can spark further insights and ideas, enriching the dialogue and leading to more comprehensive solutions.

As franchisee leaders, we have a responsibility to represent our members effectively and constructively. Our discussions with SEI are pivotal in shaping the future of our stores and the brand as a whole. By focusing on system-wide issues, maintaining a respectful and professional tone, and taking advantage of the structured forums provided by FOA and NCASEF meetings, we can ensure that our voices are not just heard, but are instrumental in driving positive change.

 

 

Gasoline In 2023: Are The Prices At The Pump Working For Anyone?

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

For the standing room only crowd that attended my report at the 2023 NCASEF Convention, I gave an overview of a number of subjects regarding the state of the 7-Eleven system, necessarily focusing on gasoline sales, which over the last several years have been an increasing percentage of SEI’s revenue and profit. The acquisition of the Sunoco and Speedway chains have accelerated this phenomenon.

A few highlights for those who were unable to attend:

  • SEI now has more than 8,200 stores with gasoline, up from approximately 3,376 stores at the end of 2017.
  • SEI gross profit on gasoline sales rose more than tenfold from 2011, rising from $533 million in that year to more than $5.7 billion in 2023.
  • In 2022, more than 78 percent of SEI’s revenue came from the sale of gasoline.
  • SEI gross margin from the retail sale of gasoline rose from 24.09 cents in 2019 to 34.85 cents in 2020—the year in which the pandemic began—an increase of nearly 45 percent. It rose again to 35.77 cents in 2021 and 42.14 cents in 2022.
  • In the three years before the pandemic (2017-2019), SEI’s gross margin percentage from the sale of gasoline, from the combination of its retail and wholesale businesses, averaged 8.9 percent; in the three years since the onset of the pandemic (2020-2022) its average gross margin rose to 12.4 percent.
  • These numbers have consequences because in 2022 SEI’s total revenue from gasoline was $13.6 billion and it sold 6.2 billion gallons.

In its Brief Summary FY 2022* on April 6 2023, SEI ‘s parent company reported that merchandise gross profit in calendar year 2022 was 34 percent, down from 34.2 percent the year before. In explaining this development to investors, it stated the following: “A decrease in gross profit on merchandise was outweighed by growth in gross profit on fuel, leading to a year-on-year increase in the overall gross profit margin factor.”

Something even more interesting has been happening in 2023 which every franchisee should take note of. The balance of this article contains a lot of numbers, but I think it’s important to walk through them carefully and analytically.

Same store retail sales started off strong in January with a 6.4 percent year-over-year increase, but then fell to 4.5 percent in February, 3.3 percent in March, and 2 percent in April. It continued its downward trend through August (the most recent month for which these figures are available) when the same store sales increase was just 0.2 percent.

Here are year-to-date same store retail sales by month through August 2023 compared to the monthly rates of inflation as calculated by the U.S. Bureau of Labor Statistics. The same store sales increase and the rate of inflation for January 2023 were identical. In the ensuing seven months, the rate of inflation was materially higher than the increase in sales.

 

2023 Same Store Sales v. Inflation
  Sales Inflation
January 6.4 6.4
February 4.5 6.0
March 3.3 5.0
April 2.0 4.9
May 2.3 4.1
June 1.0 3.0
July 1.4 3.2
August 0.2 3.7

 

The statistics regarding fuel sales are equally concerning. Again, January of 2023 showed a 2.6 percent year-over-year increase in fuel sales dollars. But every month thereafter through August has shown a year-over-year decrease in fuel sales, with the deepest decreases occurring in May, June and July.

 

2023 Fuel Sales
January 2.6
February (0.1)
March (15.8)
April (18.8)
May (25.6)
June (30.2)
July (23.4)
August (6.6)

 

A similar story appears with respect to gasoline gallons sold at retail, which were modestly positive in the first quarter but have been negative from April through August. Notice that the retreat in fuel gallons every month from April through August is substantially less than the reduction in fuel sales year-over-year.

 

2023 Fuel Gallons
January 1.8
February 2.5
March 2.9
April (4.7)
May (4.6)
June (1.1)
July (.07)
August (2.7)

 

At the same time the retail price at the pump has been increasing. In the first quarter retail prices averaged $3.467 per gallon, in the second quarter $3.613, and for July and August averaged $3.74 per gallon.

 

2023 Retail Gas Prices
January 3.46 3.467
February 3.44
March 3.50
April 3.70 3.613
May 3.58
June 3.56
July 3.62 3.740
August 3.86

 

I will leave it to the reader to interpret these numbers, but notice a few things.

  • From March to April, the average retail price was increased by $0.20, but the number of gallons dropped from an increase of 2.9 percent in March to a decrease of 4.7 percent in April, and fuel sales revenue for the month was 18.8 percent lower than the same month the year before.
  • Similarly, the average retail price increased by $0.24 from July to August, and the number of fuel gallons dropped by 2 percent and sales were down 6.6 percent for the month, year-over-year. Are these correlations or simply coincidences?

Thinking about the story that these numbers tell us, raises a number of questions.

  • What would happen if SEI chose to price its gasoline at the pump at reduced levels that would yield gross profit similar to that which it experienced pre-pandemic?
  • Would that not increase the number of gallons sold resulting in elevated revenue to SEI and higher gasoline commissions paid to franchisees, higher transaction counts, and elevated merchandise sales, resulting in additional gross profit split dollars in favor of franchisees and SEI, not to mention the customer goodwill that it would generate?

How about a good faith and transparent dialogue on these questions?

 (* See https://www.7andi.com/en/ir/file/library/kh/pdf/2023_0406khe.pdf)

 

The Unseen Crisis—Employee Turnover In The Retail Industry

By Teeto Shirajee, NCASEF Vice Chairman

The retail industry is no stranger to challenges, from evolving consumer behaviors to increasing competition from e-commerce giants. However, there is an often-overlooked crisis within retail businesses that deserves attention: the high employee turnover rate. This unaddressed crisis is not only detrimental to the profitability and overall success of retail companies, but also poses a significant risk to the industry’s future.

A Vicious Cycle

Employee turnover has become a common issue plaguing retail businesses across the globe. The cycle often starts with employees feeling undervalued, overworked, and under-compensated. This leads to low job satisfaction, reduced motivation, and ultimately, high turnover rates. As a result, retail companies find themselves in a constant cycle of recruiting and training new employees, which is both time-consuming and costly.

Causes of Employee Turnover

  1. Low Wages and Lack of Incentives: Retail employees are frequently paid minimal hourly wages, making it difficult for them to make ends meet. With low pay, limited career growth prospects, and inadequate benefits, employees find it tempting to seek better-paying opportunities elsewhere.
  2. High Workload and Stress: Retail jobs are often demanding, requiring employees to handle numerous responsibilities simultaneously and face demanding customers. The constant pressure and stress affect employee motivation, leading to burnout and an increased desire to leave the job.
  3. Inadequate Training and Development Opportunities: Retail businesses often prioritize cost-cutting measures, including inadequate training programs for employees. This results in a lack of skill development, leaving employees feeling undervalued and unprepared for their roles, prompting them to search for better opportunities.
  4. Limited Career Advancement: Many retail employees perceive a lack of growth potential within their organizations. This absence of clear career paths can discourage individuals from staying long-term, as they feel there is limited room for advancement.

Impacts on Retail Businesses

  1. Increased Costs: Employee turnover can be financially burdensome for retail businesses. Costs associated with recruiting, hiring, onboarding, and training new employees rack up quickly, negatively impacting the bottom line.
  2. Decreased Customer Experience: Frequent turnover means a constant influx of new employees who lack familiarity with products and services, leading to lower customer satisfaction levels. A decline in customer experience can result in decreased sales and brand loyalty.
  3. Poor Employee Morale and Productivity: A constant cycle of hiring and training new employees can act as a demotivator for remaining staff. When colleagues continuously leave, it creates an atmosphere of uncertainty and instability, leading to decreased productivity and employee dissatisfaction.

Solutions and Best Practices

  1. Competitive Compensation and Benefits: Retail businesses must offer competitive wages and benefits packages to attract and retain talented individuals. Implementing performance-based incentives and recognition programs can incentivize productivity and loyalty.
  2. Ongoing Training and Development: Consistent investment in employee training and development can enhance their skills, job satisfaction, and loyalty. Offering opportunities for skill-building and career advancement within the organization promotes a sense of commitment.
  3. Flexible Scheduling: Retail businesses can provide flexible scheduling options to accommodate the needs of their employees. This can improve work-life balance and, in turn, reduce turnover rates.
  4. Employee Engagement and Support: Encouraging open communication, soliciting employee feedback, and providing support systems can contribute to a positive work environment. Regularly recognizing employee efforts and achievements fosters a sense of belonging and boosts morale.

The employee turnover crisis in the retail industry is a pressing issue that cannot be ignored. By addressing the root causes and implementing strategies to improve employee satisfaction and retention, retail businesses can break the cycle of high turnover rates. Taking proactive measures to invest in their employees will not only lead to a more stable and motivated workforce, but also enhance the overall success and profitability of the retail industry as a whole.

 

 

 

Building Our Future, Together

By Sukhi Sandhu, NCASEF Chairman

What a whirlwind four days we had at the NCASEF 47th Annual Convention and Trade Show held at Caesars Palace in Las Vegas. The theme of the event was “Building the Brand Together,” and I believe we certainly lived up to it. The convention was packed with franchisees from all across the country, and the venue was filled with positive energy. We were also graced with the presence of SEI executives, whose participation added valuable insights to our discussions. Last, but by no means least, our exhibiting and sponsoring vendors dazzled with their amazing trade show offerings and unwavering support.

The importance of unity in strengthening the 7-Eleven brand can’t be overstated. From franchisees to vendors and SEI representatives, each stakeholder  plays a significant role in driving us forward. We gathered from various corners of the country, each with unique experiences, challenges, and perspectives, but with a common goal: To grow and evolve, both as individual business entities and as an integral part of the broader 7-Eleven network.

Our four-day event was a melting pot of collaboration and innovation. The seminars were meticulously planned to deliver insights, tools, and strategies to strengthen our businesses. The objective of these sessions was simple—inform our franchisees and equip them with the best resources to prosper.

There was also plenty of room for relaxation and networking. The charity golf tournament at the TPC Las Vegas Golf Course benefitting Children Miracle Network Hospitals and the High Roller Observation Wheel were not just entertaining, they also served as poignant reminders of the power of community.

The last two evenings of the convention were reserved for moments of celebration and gratitude. The Charity Night Gala and the Grand Banquet were elegantly executed, honoring our unified spirit. The Charity Night Gala in support of CMN Hospitals was an awe-inspiring testament to what we can achieve when we come together for a cause greater than ourselves. Not only did we enjoy silent and live auctions filled with incredible items, but the highlight of the night was the presentation of a $200,000 check to the organization. This charitable act shows that our 7-Eleven community doesn’t just talk about making a difference, we actively participate in bringing about positive change. It was an event that embodied the true essence of unity, and it makes me proud to be a part of this remarkable coalition.

The awards ceremony at the Grand Banquet shined a spotlight on franchisees and vendors who’ve made remarkable contributions to our community. And the mesmerizing performance by renowned Indian recording artist Mika Singh added a special charm to the night that will be etched in our memories for years to come. It was truly the perfect ending to a stellar event.

A pivotal part of our convention was the two-day trade show, where our valued vendors showcased a variety of products and special deals designed to improve our retail offerings and ultimately enhance the customer experience. I want to extend my heartfelt thanks to all vendors who exhibited, as well as those who went above and beyond by sponsoring the convention. Your involvement in our national and local events isn’t just beneficial—it’s essential to our collective prosperity.

To all the franchisees who attended, your active participation added immense value to our convention. The exchange of ideas, the genuine feedback, and the profound commitment to the brand are what make these gatherings worthwhile. Lastly, I want to thank the SEI executives who attended. Your presence underscored the importance of a collaborative relationship between franchisees and the corporate team.

It’s through unity that we’ll continue to build a brand that’s not just profitable, but also impactful and enduring. Each one of us is a building block in the powerhouse that is 7-Eleven. When we come together, whether it’s for a grand event like this convention or in our day-to-day interactions, we fortify our brand.

Let’s carry the message of “Building the Brand Together” into every business decision we make, every customer we serve, and every challenge we overcome. Once again, thank you all for contributing to the overwhelming success of the 47th Annual NCASEF Convention and Trade Show. Here’s to an exciting year ahead, building our brand together, united in purpose and vision