The Perfect Storm
By Michael Jorgensen, Executive Vice Chairman, NCASEF
We are in the middle of a perfect storm. Or, as Thomas Paine wrote in The Crisis, “These are the times that try men’s souls.” This is certainly a very challenging time for our industry, and for our individual businesses. The environment is changing more than ever before, and the effects of increased competition, low unemployment, wage hikes, shrinking GP and declining customer counts are affecting our bottom lines.
Franchisees are under a tremendous amount of pressure today and are already investing additional resources in order to react to the current business environment. We are all aware that brick and mortar businesses are in a fight for survival with the advent of the digital age, online ordering, on-demand delivery and autonomous devices. As a result, the 7-Eleven brand is challenged every day to transform to meet changing consumer demands and expectations.
Complicating matters, we are not only fighting these outside pressures but we have also been engaged in an internal conflict. Franchisees for the last several years have held out hope that relief would come in the form of adjustments in the upcoming 2019 Franchise Agreement. The NCASEF leadership and Board of Directors, which encompasses all 86 FOA Presidents and Vice Presidents, plus six NCASEF officers, took a brave and difficult stand to support a lawsuit and drive attention to the concerns within the franchise community we felt were not being adequately addressed. (All of the speculation will be put to rest by the time you read this article, when the new franchise agreement is unveiled in early June.)
With the dismissal of this lawsuit, and while the appeal is underway, we are left with a very difficult relationship with corporate. We are all concerned that being cut off from any working relationship with SEI management is affecting our ability to help our franchisee constituents. Of course this is true, but we remain confident that we can continue to represent all franchisees’ best interests for a better tomorrow. We also continue to remain ready and willing to re-engage with SEI and work towards a successful resolution to our current situation.
7-Eleven is not alone in this trying business environment. A number of franchise systems currently are in turmoil. Subway and Tim Horton’s are the two that are garnering the most headlines, and we can learn a lot from the current situations within these iconic brands. We still have hope we can avoid rising to the level of franchisee discontent that exists in those franchise systems, but we must open the lines of communication and begin to rebuild trust.
Franchisee unity and “the Brand” have been the words most frequently used in communications by franchisees and SEI. In order to win we need to combine these words: “7-Eleven Franchisees unified behind the Brand.” We DO share the same goal—profitable stores and a vibrant brand. Regardless of our differences we must find a way to work together. Both parties need to be willing to reengage in an effort to find solutions to our many challenges in order to attain our goals.
In view of our current relationship with corporate all I can say is that franchisee leaders always must do what they believe is best for the system and for franchisees. Let’s hope that now we can rebuild trust, because we have no choice but to work together to succeed.