State Of The Coalition: 2012
The National Coalition has begun its 39th year as an association, and we have just completed our 37th annual convention and trade show. What began with six franchisees in 1973 has continued to grow into a membership of almost 4,000 stores and 40 Franchise Owners’ Associations around the country in the 30 states in which 7-Eleven operates. The National Coalition currently represents about 80 percent of the entire 7-Eleven franchisee community.
As our franchisor grows, so the National Coalition will continue to grow. At the current rate of acquisitions, 7-Eleven will likely reach 10,000 stores in the United States by 2015, opening up tremendous opportunities for franchisees who want to grow in the system, but also raising concerns about encroachment and goodwill value for existing stores.
In 2012 the National Coalition has been active legislatively. We joined in supporting the class action lawsuit by the National Association of Convenience Stores and other groups against the Federal Reserve for ignoring the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173), which restrains the interchange fees banks are allowed to charge retailers. The NACS Board in mid-July rejected a settlement proposed by large banks and credit card companies, because transparency on interchange fees would not have been achieved. The National Coalition supports NACS’ efforts, and we like retailers’ chances in this lawsuit. The next hearing on the suit is scheduled for Wednesday October 3, in Washington, D.C.
The National Coalition in 2012 has also been busy with charitable work, raising over $340,000 for Hire Heroes USA in a cause equity program involving 7-Eleven, franchisees and 12 of our valued vendors, and $70,000 in silent and live auctions at our convention for Susan G. Komen For The Cure. The Coalition over the last three years is approaching $1 million dollars in total charitable donations to Hire Heroes, the Muscular Dystrophy Association and Susan G. Komen For The Cure.
Support from our vendor community has never been better. The National Coalition is healthy financially and continues to grow every year. Over the past three years we have worked hard to expand our Affiliate Member Program, which now totals over 150 vendors. We had over 40 companies sponsor events at our convention, and we thank each of these vendors for their support of our activities.
Legislative issues facing franchisees continue to be a concern. National Coalition representatives made several trips to Washington, D.C. to meet with Representative Benjamin Quail (and others) concerning Roll Your Own legislation to put an end to the business of renting rolling machines to consumers for the purpose of avoiding cigarette excise taxes. Eleven states have since adopted legislation towards this end, and on July 6 President Obama signed Transportation Bill HR 4348, passed by the House and the Senate, which included a provision that defines commercial roll-your-own machine operators as tobacco manufacturers.
Online lotteries continue to threaten the traditional store lottery business. Sugar taxes on soda, energy, and fruit drinks have been proposed (but defeated) in many municipalities, and New York City Mayor Michael Bloomberg has received much publicity for proposing a ban on all sugary drinks over 16 ounces in restaurants and movie theatres. We plan to continue to be involved with all of these issues.
To test the limits of SEI’s control over the new digital video recorders currently being installed in stores throughout the country, five franchisees have filed for mediation in regard to SEI’s intent to have remote access to all stores through the new system. These franchisees will test the parameters of the store agreement with the intent of holding SEI to the terms of the security amendment not just now, but in the future. Protecting franchisees’ rights is a focus of the National Coalition Board.
The National Coalition Board, which is comprised of a president and vice president from each of our 40 FOA members, meets four times per year to talk about issues and opportunities and how we can best share resources and grow in a system like ours, which leads the industry in both technology and innovation, and where changes are numerous and ongoing. I currently have a list of over forty issues affecting franchisees that the Board is working on as part of our efforts to protect franchisee rights and educate our members to system changes. Low volume stores, encroachment, the new contract, gasoline commission, maintenance changes, the CDC flat fee, LONs and breaches, BT, eroding gross profit, credit card fees, goodwill, accounting policies, Project E, gasoline surveys, cleanliness—the list is long and numerous, and always changing.
The National Coalition is willing to step up and fight to protect franchisee rights, but as a group, we need to stay focused on the issues that matter. The system continues to change, and change is hard. We have gone through layoffs and reorganizations of corporate resources more than once, and we have survived because franchisees are resilient. We solve problems. We are hardy, strong, tough, robust, spirited, flexible, durable, feisty and quick to recover. In short, we are survivors. We adapt to system changes, and we make the brand stronger.
In reality, franchisees will continue to adapt and change with the system, but we need to stay united to be productive and grow. I urge everyone to stay engaged and involved with your local FOA. Attend meetings, provide feedback, and serve on committees. Call your friends to find out what is going on in their stores and in their area, and bring them to FOA meetings. Provide feedback to your local FOA, and continue to bring up the issues that should be addressed. It’s the only way we can all win together.