Let’s Stay Safe, Stay Healthy, But Don’t Let SEI Off The Hook

By Jay Singh, Chairman, NCASEF, President, San Antonio FOA

The coronavirus has changed the world as we know it. COVID-19, the illness caused by the virus, is wreaking havoc on the lives of franchisees, our families, our employees, our customers, our vendors and SEI. We have all been through some hard times lately, and we are still not at the end of the pandemic. We have hotspots in New York City, Long Island, Seattle, and to a lesser extent, many of the major cities around the country: Chicago, Detroit, Philadelphia, Los Angeles, Miami and others. As of this writing (April 17), one franchisee in New Jersey has succumbed to the virus, and we still have a long way to go, as the virus has not run its course.

            The coronavirus affects each and every one of us indiscriminately. It does not see color, class, socioeconomic level or race. It affects each and every one of us individually, and as a group. It affects franchisees and store associates equally. 7-Eleven has shut down its facilities in Dallas to all visitors, and many people are working from home, while franchisees man the front lines of food distribution as essential businesses. It is our lot as franchisees to serve our customers and we love to do it. We just don’t want to risk our lives any more than is necessary.

            Many franchisees in these troubled areas have to answer the question: Is my loyalty to the brand and my success financially more important than the health of my customers and my employees? When does it get so bad that I close my store? If I do, how can I ever recoup the monies that I have lost? Will 7-Eleven help me? Will their help be enough?

            In some areas some franchisees are still seeing hundreds of customers a day as business increases in some neighborhood stores, and decreases in some inner city business districts, and at stores in industrial areas. Gas business has dropped in most areas by 40-50 percent. Many of our employees have quit out of fear. Whatever our customers bring into our stores we take home to our families, potentially putting them at risk.

            The best advice I can give at this time is, don’t panic. First and foremost, take care of yourselves and your families. Your safety comes first. If you have to shut down your store overnight, do it. If you have to shutter your store for a length of time out of protection for the people in your universe, or because you don’t have the staffing, do it, but give proper notice to 7-Eleven, Inc. At all costs, do not abandon your store. Follow all the safety instructions coming from health agencies and 7-Eleven. Wear masks, wash your hands, keep social distances, and read all of the health department information.

            We of course cancelled the NCASEF Board of Directors meeting scheduled for Long Island in May. We are looking to reschedule, but that may not be possible. We do not want any unnecessary travel, and we’re looking into alternatives like videoconferencing and teleconferencing. We have not yet cancelled our convention, scheduled for the Gaylord Hotel in National Harbor, across the Potomac from Washington DC, August 10-13.

            Earlier this week, it seems that 7-Eleven woke up a little bit. In the worst areas, like NYC, they are permitting franchisees to close stores. This is up to the franchisee. If all of your employees have quit, and you have multiple stores, you have no choice but to look for new employees, or close stores. You will however, need to call 7-Eleven and talk it over if this is your course of action. Throughout the country, if your staff deserts you, you have little choice. Your safety comes first!

            We did get a reassuring letter from Joe DePinto, but how should we react? In the first week of April 7-Eleven made a big announcement in the press about committing $95 million to support franchisees in this crucial time, as they “provide their local customers the food, beverages, household essentials and other critical supplies they need in a clean and safe environment.” They awarded franchisees $5,000 in operational credits (for April only) to stay open 16 hours per day. For a full discussion of NCASEF’s response to this announcement, please take a look at Dispatch, “NCASEF Responds To SEI COVID Support Plan,” on page 10, or at www.NCASEF.com.

            On April 10 NCASEF sent an open letter to SEI (also in Dispatch, page 11) calling for the following actions until December 31, 2020:

  • Reduce the 7-Eleven charge by 30 percent
  • Suspend the advertising fee
  • Defer all loan payments that franchisees have with SEI
  • Reduce maintenance charges by 50 percent
  • Eliminate the credit card fees
  • Eliminate the interest fee
  • Lend funds to franchisees to stay above water, with 1 percent interest for 5 years for any under equity issues.

            As of this writing, we have not heard back from SEI.

            The NCASEF has hired a labor lawyer, Robert Bernstein, who we introduced at our convention last year, to consult with franchisees on how to handle employee issues as they come up. In the last two weeks he has conducted three webinars exclusively for 7-Eleven franchisees, and participation has been great. You can find an article based on his presentation on page 45 of this issue.

            We are working closely with FOA presidents and vice presidents all over the country to help franchisees. Our general counsel Eric Karp has attended telemeetings with insurance companies, to update you, and his article appears on page 35. Our attorneys have already put together a template letter for franchisees who need to shut their stores down.

            There are franchisees who are worried about their safety and employee and customer safety. Some franchisees have boarded their stores out of concern for their workers and customers, or due to staffing issues. Some stores have closed at nighttime, largely to a lack of help. In some situations, where the virus is worst, all of franchisees’ employees have quit, and if a franchisee is a multiple storeowner, he or she has likely boarded stores. As it turns out, 7-Eleven is okay with this, but 7-Eleven wants franchisees to give proper notice 24 hours prior to closing and talk about the impact on their business.

            Bottom line, this brand is near and dear to all of us, but safety should be our first priority, because here we are, on the front lines of consumer service, fighting an invisible foe for franchisee safety, employee safety, and customer safety.

            We urge everyone to follow social distancing in your store, sanitizing the whole store, especially where customers touch the most (front door, counters). Encourage contactless payments. California’s health department has already issued the instructions on fountain, and most of us have already taken out the loose condiments according to the directions given to us by 7-Eleven, Inc.

            We appreciate whatever help is coming from 7-Eleven, but for franchisees already hindered financially, it is a deeper financial situation that has only become more acute as a result of changes made in the 2019 Franchise Agreement. We have weathered storms before, but this one is particularly tough, not only for us, but for everyone.