Coalition of Franchisees Says Deaf Ears are Bad for the Brand; Calling for Change

It has been 15 years since Joe DePinto took over as chief executive officer at 7-Eleven. Since then, franchisees have struggled with profitability and working conditions. The National Coalition of Associations of 7-Eleven Franchisees (NCASEF), an elected, independent body representing the interests of more than 7,200 7-Eleven franchised locations in the U.S., is concerned that corporate profit and success are coming at the expense of store operators—a story that is not being told to prospective investors or to the public.

In 2018, the NCASEF Board of Directors voted No Confidence in 7-Eleven’s executive leadership. Today, NCASEF is repeating its call for an overhaul of the 7-Eleven corporate team in Dallas. 7-Eleven in North America is a privately held unit of the Japanese parent company Seven & I Holdings.

“With each passing day it becomes increasingly clear that this team is not putting franchisee interests first, as they claim to,” said Jay Singh, NCASEF Chairman. “They have shut the National Coalition out because some of our members have been critical of their practices. We believe 7-Eleven’s corporate leadership is a liability to the brand we love.”

The story is similar in Japan, where one franchise owner, Mitoshi Matsumoto, has become the face of a movement trying to pressure 7-Eleven to change its ways. After Matsumoto announced he was closing on New Year’s Day because of a chronic labor shortage, 7-Eleven terminated his contract, citing customer complaints and his public criticism of the company.

In a pitch to prospective franchise buyers on its website, 7-Eleven claims, “…your earning potential can be as big as you want to make it.”  But, franchisees say that is not the way things are under present corporate leadership. 7-Eleven exercises pervasive control over many aspects of store operations, include limiting franchisees’ ability to control pricing.

“Our contract grants franchisees control over in-store pricing, but mobile technology has different rules, and promotions like $1 coffee benefit 7-Eleven’s gross sales and app adoption while franchisees’ expenses are growing faster than profits,” said NCASEF Executive Vice-Chairman Michael Jorgensen.

“Conditions for franchisees are worsening and the National Coalition’s requests for open dialogue and collaboration with the company continue to fall on deaf ears,” said Singh.

“Only a small handpicked group of franchise owners are able to provide input for critical decisions that affect our business. One has to ask why 7-Eleven continually ignores and excludes the only elected representative body of its franchisees.”