Teamwork On The Multiple Criteria

7-Eleven in March released the newly updated “holistic” review form for the multiple criteria process that qualifies us to acquire more 7-Eleven stores. Of course this process is on the minds of all franchisees who are aggressive towards the business and feel a sense of urgency to grow and develop our 7-Eleven businesses. As the company moves to a multiple-store franchisee model, the multiple criteria process continues to grow and get more detailed about the franchisee’s qualifications needed for approval.

I was surprised to learn that the new multiple-criteria form, which used to be a one-page document, is now a 17-page package, and the questionnaire is eight pages! They say that good things don’t come easy.

Years ago I was qualified for multiple stores based on the previous process, and did become a multiple, and verification several years later again confirmed my qualifications for multiple stores. While I was not interested in acquiring any additional stores at the time, knowing that my operation was considered acceptable was verification that I was a good operator.

Today the multiple process is incredibly detailed, and reviews every aspect of our store operations including financial health, merchandise /inventory, staffing, systems understanding, compliance with the 7-Eleven agreement, and attitude. In addition to the metric evaluations, we also now get a “holistic evaluation” that adds up the sum of all our parts in the final recommendation.

When I was evaluated a few years ago I was happy to go through the process and to confirm that my store operations and management skills qualified me for growth. Today, I am not sure my stores would qualify under the new multiple criteria standards, yet I embrace the 7-Eleven system and have consistently improved sales and profits.

There are many reasons that stores underperform, and may not meet market averages. Some locations are simply not profitable due to competition or changes in traffic flow and may never sell the market average in any category. If you have a store like this, it is likely you may never qualify for a multiple even though you are a great operator, and even when another store really is what you need. I hope that just as much emphasis is placed on helping these franchisees improve existing operations as is applied to the multiple store evaluation process.

I am a bit concerned that the Asset Protection Department now has to approve each franchisee’s application for an additional store. 7-Eleven advises us to evaluate our businesses to “identify opportunities to excel,” but Asset Protection is really looking for “abnormalities,” and this seems at odds with looking for reasons that a franchisee is qualified for another store. Speaking with franchisees at a recent trade show, the general consensus was that we need more transparency from Asset Protection about their decisions, and we need to know about any abnormalities found in the store. These franchisees need more help from field consultants, market managers and whomever else to help them figure out why they were not approved. This attitude certainly has and will continue to add stress to the franchisee and franchisor relationship.

Personally I believe franchisees are extremely hard working and honest store operators. If some of these folks want to grow within the system, then let us help them and coach them. If Asset Protection has information that is adverse to their growth, then let us fix the problems.

SEI has gone through a tremendous growth spurt in the last few years, building new stores and acquiring others. Existing owners franchised a majority of these stores, and I feel we have a very good pool of store operators. If the current trend continues, however, I fear SEI will force some current owners to go outside of 7-Eleven to grow. When this happens we all suffer, because now the franchisee will pay more attention to their new venture and feel they have outgrown the 7-Eleven system.