Making Tomorrow Better Than Today
By Sukhi Sandhu, NCASEF Chairman
When I, along with the other newly elected NCASEF officers, began serving our terms in January of 2022 we set a goal of developing open communication with SEI so we could work together to improve the 7-Eleven business for all stakeholders. Another focus of our administration was to change the culture of our National Coalition to emphasize more collaboration among Board members, and to build stronger relationships with our vendors and supplier partners.
Overall, I believe we are in a better place today than we were on January 1, 2022. On the organization side, we provided a platform via our quarterly meetings for all three stakeholders—FOA leaders, vendors, and SEI management—to share strategies for the 7-Eleven business. SEI now has several of their top people attend our Board meetings to discuss issues, provide updates, answer questions, and take suggestions from Board members.
We also improved our Affiliate Membership Program and turned our focus to working with vendors to grow sales and improve the overall business. Through our Affiliate Member meetings—which we have increased to three per year instead of twice a year—franchisees and vendors get to discuss and work on solutions for things such as supply chain issues, and the meetings provide a platform for introducing new items.
We brought back the charity golf tournament, which besides raising funds for our charity of choice—Children’s Miracle Network Hospitals—also provides a venue for vendors and franchisees to network and socialize. Additionally, we implemented structured NCASEF committees and aligned them with SEI departments to highlight and address systematic issues. The committee members then provide feedback to SEI upper management for solutions. These committee members, in turn, bring that information and updates to the NCASEF Board members.
One of the outcomes of all this—especially our open communication and dialogue with SEI—is the progress made in resolving the AR Gap issue, which has resulted in millions of dollars not being pushed to franchised stores and millions of dollars of AR Gap credits issued to stores. SEI Executive Vice President and Chief Merchandising Officer Jack Stout announced at our last Board meeting that he is devoting all of his attention to tackling and resolving the AR Gap issue once and for all, and has a full-time team dedicated to the task. Another positive outcome is the continuation of the 7Now delivery fee subsidy, which SEI had temporarily suspended but reinstated after NCASEF leadership met several times with corporate to emphasize the importance of the subsidy until the program really takes off and becomes successful.
Something we also worked on and secured was SEI giving a store operational credit of $200 for the last five months of 2022, with an additional $1,500 for the month of November and another $1,500 for the month of December.
More recently, we negotiated a policy change with SEI to reduce the gross profit split (GGPS) charge by 100 basis points for traditional franchised stores, effective January 2023. For franchisees with multiple stores, every traditional store will receive a GGPS reduction of 150 basis points. These changes will remain in effect until further notice and for no less than one year.
Furthermore, we worked with SEI to implement a Gross Income Support (GIS) program for lower volume stores. It was at $200,000 in the beginning of 2022, but I am proud to announce that we negotiated with SEI to increase it to $280,000. This will hopefully provide more stability for lower volume stores and give them enough breathing room to improve and grow their sales. This will kick in with the April 2023 accounting period.
We have also worked with SEI to discount the franchise fee to make it more appealing for franchisees to franchise stores. This can help to increase goodwill because it will allow the potential buyer to invest the saved funds from the franchise fee more towards the goodwill amount.
We will continue to have ongoing conversations with SEI on enhancing our franchise business model and to improve systematic issues such as IT, store safety, fuel profitability, 24/7 hours, etc. I want to assure you all that your NCASEF leadership is fully committed to giving 110 percent to address issues, identify opportunities, and increase the bottom lines of all stakeholders.
I believe that the hard work and dedication of our team is what has brought us to where we are today, and I am confident that we will continue to be successful in the future. Our focus remains on increasing sales and gross profit dollars, driving down costs, and addressing systematic issues. Together, we can continue to make progress and improve the 7-Eleven brand.
I am honored to be a part of this team and I am grateful for all the support we have received in 2022. Let’s make 2023 an even better year!