FTC Commissioner Gives Keynote Address at NCASEF Annual Conference
The last few years have brought extraordinary challenges to 7-Eleven franchisees—from the 2019 Agreement to the COVID-19 pandemic, our members have faced unprecedented financial and operational issues. All of that has been compounded by the acquisition of 7-Eleven’s $21 billion purchase of 3,900 Speedway gas stations and convenience stores.
We were honored to have Federal Trade Commission (FTC) Commissioner Rohit Chopra speak at our annual convention in Orlando recently. It was clear from his comments that he understands the challenges facing all franchisees and the specific concerns we have about our relationship with 7-Eleven, Inc. (SEI). Chopra has promised to “safeguard operators of franchised businesses from abusive practices by franchisors.”
Following Chopra’s lead, the FTC has been soliciting comments on the Franchise Rule which enforces laws prohibiting unfair business practices. The NCASEF board, acting on your behalf, has been quite vocal over the last few years expressing concerns over the way SEI exerts control over its franchise owners and publicizing the fact that 7-Eleven franchisees are not guaranteed the lowest cost of goods from the franchisor-controlled supply chain because SEI accepts money from vendors.
Because owners of franchised businesses do not have the right to file private legal action against a franchisor for violation of the Franchise Rule, we must rely on the FTC to protect our interests. Aside from Chopra, members of Congress are also stepping up to improve protection for franchisees. Recently, Rep. Jan Schakowsky (D-IL), who chairs the House Consumer Protection and Commerce Subcommittee, called for a Congressional probe of the Franchise Rule.
“It was refreshing to hear Commissioner Chopra’s commitment not only to enforcing the Franchise Rule, but also expanding the rule to include the substance of the relationship after we buy in. Most of the time, bad things happen after franchisees sign their franchise agreement,” said NCASEF National Chairman Jay Singh.
Chopra’s talk was facilitated by Keith Miller, the principal of Franchisee Advocacy Consulting and a Subway franchise owner, who also addressed the convention. Miller is an outspoken advocate for franchisee interests around the country who has watched the situation between 7-Eleven and its franchisees for years.
“The message to franchisees was that greater scrutiny will reign in some of 7-Eleven’s practices, whether they make changes on their own or they are forced to do it,” said Miller.
The FTC’s consent order allowing SEI ownership of Speedway required SEI to divest 293 of its locations. But Chopra told the National Coalition he remains concerned the deal may still be harmful to consumers. He also acknowledged to franchisees that the FTC is closely monitoring investigations by other jurisdictions, both in the US and around the world, into SEI’s parent company.
“Based on what we heard from Commissioner Chopra, 7-Eleven franchisees should be hopeful the playing field could soon be leveling,” said Singh.