Elected Not Selected: The Key To Franchisee/Franchisor Relations

BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF

Just two years ago McDonald’s franchisees formed a new National Owner’s Association after not having one for the entire history of the franchise. The vision of the two-year-old group, according to their website, is to “collaborate with other elected operator leadership and McDonald’s to positively impact the System for the benefit of the owners, our employees, customers, the Company and ultimately the shareholders.” Their mission is “to unify owners to ‘lead together again’ and save our culture, while assuring the owners have net cash flow growth, financial viability and are immune from intimidation and retribution.” Their core values are: 1) Honor the 3-Legged Stool; 2) Be Honest,Transparent & Respectful, 3) Be United—You Are Not Alone, 4) Embrace McFamily, and 5) Lead With Integrity.

Sound familiar? Absolutely, because these are much the same visions and goals of your very own National Coalition of Associations of 7-Eleven Franchisees, an organization that has been in existence serving franchisees since 1976.

In February of 2019, McDonald’s held elections for representatives of its internal franchisee leadership group, which is simililar to the NBLC in that it is organized by and works closely with corporate. Unfortunately it does not resemble in any way the NBLC structure for one reason, and one reason only: 7-Eleven’s NBLC is “Selected, Not Elected.”

7-Eleven’s current NBLC, and the CEO Roundtable, the group that selects the topics that the NBLC will engage, are all hand-selected by 7-Eleven and not elected by franchisees generally or by the National Coalition franchisee group. In fact the protocols that were in place for selection are now even more loosely adhered to.

This is a major and very important distinction, because hand-selected franchisees are hardly accountable to anyone but the person or group that selected them. I would never, ever mean to malign anyone on the current NBLC, as I am sure they are all good, reputable, smart people, but they can’t possibly represent the majority of franchisees in the system the same way elected franchisees would. They are not truly beholden to the franchisees the way they would be if they were elected, and they are not truly accountable to franchisees. In fact, their selection mitigates and marginalizes the elected leaders of the National Coalition and the 43 Franchise Owners Associations that do represent franchisees throughout the 31 states in which 7-Eleven operates.

Therefore, I would like to propose a change in the structure of the NBLC and the CEO Roundtable: hold a national franchisee election starting with the members of the CEO roundtable, and then work on a structure for the NBLC, because what is more important than knowing that the folks who represent all the franchisees in the country, and who meet, intimately, with the CEO of the company, are accountable to the franchisees who elected them?

The advantages of such a move would be:

  1. 7-Eleven would have a body of franchisees that they can be sure is representative of all franchisees.
  2. The strength and quality of the feedback given to corporate would improve.
  3. Elected franchisees who are in touch with their constituents can report on potential problems or issues before things get out of control, and obtain a solution instead of engaging in conflicts and litigation.
  4. Franchisees and prospective franchisees will see such an organization as a positive of the franchise company.
  5. Both parties can speak openly at association meetings and address sensitive topics in a productive way.

Who knows, such a relationship might even develop added trust between the franchisee representatives and the franchisor
as they work closely together.

The disadvantages might include:

  1. The new organization might be able to challenge and resist new programs the franchisor wants to implement.
  2. The association could have legal standing to litigate against the franchisor, and tap into the financial resources of its members.
  3. Elected franchisees could be more difficult to deal with than hand picked representatives.
  4. Some members could be militant and seek to battle the franchisor.
  5. If negative franchisees are not weeded out, some could seek to promote their own agendas.

Whatever the case, it is clear that this is one of the most tumultuous times in the history of the 7-Eleven system. Eighteen percent of all 7-Eleven stores are currently up for sale. Franchisees have a new contract we are not happy with, very few stores that are sold have goodwill attached, and quite a few long-term franchisees are leaving the system with no retirement at the end of a lifetime’s worth of work. In spite of our current difficulties, isn’t it worth a try?