Emerging From This Crisis Requires Real Corporate Support
As the calendar turns to May, and the global pandemic moves into its third month, it is increasingly clear that SEI wants things to return to normal. But lower customer counts and smaller profits cannot be considered normal. 7-Eleven franchisees are worried about safety and they’re worried about whether they can recover from the hit to their bottom line. Franchisees do not share SEI’s optimism. This is the reality we face as SEI shifts back to overnight deliveries and presses store operators to resume 24-hour operations with barely a hint at future relief from their financial pressure.
“It is hard for franchisees to really get a handle on how resuming overnight staffing will affect the bottom line because we don’t know when customers are going to start coming back and spending money,” said NCASEF Treasurer Jaspreet Dhillon. “This will place another financial burden squarely on the shoulders of franchises, many of whom are already struggling.”
“Corporate needs to provide additional relief to franchisees during this time. It’s going to be a while before we will get back to business as usual, and the future normal is going to be much different than it was” said NCASEF Vice-Chairman Michael Jorgensen. “It is in every one’s best interest to be assured there is financial stability within the 7-Eleven franchisee community. At this time, when the future is so uncertain with many franchisees in danger of going underwater, SEI needs to extend a strong lifeline which clearly defines for all franchisees exactly what this support encompasses.”
NCASEF made it clear that the COVID relief plan SEI released in April wasn’t nearly enough to offer true relief through the duration of the pandemic. SEI has responded by announcing that our maintenance contracts will be credited between $500 and $550 per store for the month of May. It’s a small step – franchisees need more.
Franchisees know it is hard to predict when sales will return to a “normal” mix of products. Currently stores are mostly selling beer, cigarettes and other staples which will cause a significant reduction in gross profit. Franchisees want to resume selling coffee and dispensed beverages, but because of the crisis, self-serve is prohibited in many areas. The only way to offer those products is to make it employee-serve, which means franchisees paying the additional labor and reducing their net profit.
The impact of coronavirus is different across the country. That is why franchisees need flexibility to ramp up their hours and staffing based on the conditions in their local markets. SEI must understand that a one-size fits all approach will not work at this time. Corporate leaders must acknowledge that increasing labor costs now could cripple franchisees financially.
“Franchisees must understand that we are stronger when we are aligned.” said Jorgensen. “The National Coalition believes all franchisees must demonstrate our unity and demand greater support so franchisees and the franchisor can emerge from this crisis healthy and strong.”