Why Did You Become A 7-Eleven Franchisee In The First Place?
BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF
There is an old saying regarding career advice that says, “Find something you love to do and you’ll never have to work a day in your life.” With three of our four boys currently teenagers there is a lot of discussion in our home about what the future might have in store for each of them and our plans to help them on their individual paths. I can safely say that as a young man I didn’t have a goal to become a 7-Eleven franchisee.
A number of things led me to the 7-Eleven business. I was working for the company as a field consultant, I believed in the business model and direction of the company, I valued the recognized brand, and knew I had the skills and knowledge necessary to operate successful stores. The most important considerations in my decision to franchise were financial (how much money could I make) and scheduling (the freedom to make my own hours and be available for my kids). While each franchisee has their own personal reasons for franchising, I think it is safe to assume the majority of us simply wanted to make money.
In their franchising ads, 7-Eleven boasts:
“A gross profit split means we’re invested. Most franchisors take royalties on sales, but 7-Eleven has a different kind of business model. We share profits with ourfranchise owners, so we really are invested! We’ve also built all kinds of tools and resources to help you reduce waste and increase gross profits. When you give your best effort, we’ll match it with ours—because your store’s success is as important to us as it is to you.”
I am extremely proud of my affiliation with the 7-Eleven brand. I have dedicated more than 20 years of my life to 7-Eleven. The leadership of the National Coalition has been accused of trying to harm the brand. This could not be farther from the truth. The difference is in how we perceive the role of the franchisee and the role of the brand, and the value they both hold.
In a previous article, I wrote that franchisees have a symbiotic relationship with the brand. Symbiosis is defined as a mutually beneficial relationship between different people or groups. Both franchisees and the brand benefit from the relationship, but what happens when a particular franchisee or particular set of franchisees no longer benefits from the relationship? Or when the brand no longer benefits from the relationship with an individual franchisee? The simple solution is to just sever the relationship, right? Only it’s not so simple, because there are financial ramifications. The best solution is to ensure balance and harmony remain within the relationship.
7-Eleven defines the brand as, “the mark, name, logo and identity of a company or business, and a franchise system’s most valuable asset.” I will not disagree with this definition, but I will add that franchisees are a close second. I doubt that you will find many people in the 7-Eleven system who would disagree. It is important to note that as a franchisee, the brand’s value to me changes if I cease being a franchisee, although the brand’s value does not change.
Over my 20 years with 7-Eleven I do not recall the use of the word “brand” as much as I have in the last two years. Branding is very important for a successful business. Successful branding will build customer loyalty and drive sales and profits. It is important to build branding with everyone on your team so the external message to customers is understood at all levels of the organization. If I could do a word cloud of all items 7-Eleven has published or presented in the last year or two, “brand” would be front and center and would dwarf all other words.
It is an exciting time at 7-Eleven, because our business is changing and we have new initiatives that can drive our business to new heights and help us win over new, loyal, customers in a highly competitive environment. 7-Rewards and 7-Now are at the forefront of these programs.
Franchisees have many concerns about the new 2019 contract that many have signed, some willingly, and others out of necessity, and the delivery contract (for those still on older contracts but opted in for delivery). These concerns regard the uncertain contractual obligations of these programs both operationally and financially. These programs are part of building the brand, but the future financial reward remains unclear. Currently these programs are being funded, but there is no contractual obligation that they will continue to be funded. As these programs grow in customer acceptance, the financial impact of a shift in the way they are funded could have a significant impact on our financials.
So back to my question. Why did you become a 7-Eleven franchisee in the first place? I bet not one franchisee answered “to build a brand.” The NCASEF was accused of damaging the brand by attempting to call out inequities in the system and asking that these inequities be addressed, but in reality the NCASEF is working on behalf of franchisees and the brand. We value each piece in this relationship. No individual franchisee is more valuable than the brand, but the brand is not more valuable than its franchisees.
In Jerry Maguire, the sports-oriented movie with Cuba Gooding, Jr. and Tom Cruise, Gooding’s character, Rod Tidwell, reiterates over and over, “Show me the money!” What he is really looking for is an agent who truly cares for what matters to him and his family, for an agent to put him first. In the end Jerry eventually does put Ron first, and the money follows. This is what most franchisees wanted when they franchised their 7-Eleven stores. Well, it can happen. Every franchisee needs to make the same declaration. “Show me the money!”