Why Are Franchisees Upset?


Over the past seven years, 7-Eleven franchisees have experienced unprecedented attacks from our franchisor on our income and independent contractor status, so it amazes me when folks from SEI ask me why franchisees are upset. Where should I begin?

Let’s start with the gasoline commission reduction to a ridiculous and unsustainable penny and a half per gallon at a time when 7-Eleven gasoline income was skyrocketing. This action devastated many of our gasoline stores. Then came the credit card fees. I remember SEI telling us back then that the average store will only pay around $450 a month in fees, but in reality we are paying $1,000 a month and climbing.

Next, we were asked to embrace and thank our gods for Project E, which left SEI practically operating with a skeleton crew at the local, regional, and national levels. The infamous Project E ended up causing loss of income because of the uncountable number of frustrating hours we had to spend trying to correct Project E-created mistakes, like inaccurate billing that would take forever to get reversed.

Of course, we cannot forget the tens of millions of dollars that somehow SEI is collecting from vendors in the form of promotion fees/expenses in lieu of lower cost of goods that they could not negotiate somehow. Nor can we forget that franchises have been subsidizing an antiquated CDC model that has not been financially viable since its inception 15 years ago. We are paying millions of dollars a year more in higher cost of goods for items like hot dogs, Taquitos and snuff by going through the CDC instead of McLane, just to keep these CDCs open (a purely SEI responsibility). Last but not least, the elimination of SEI’s maintenance department and the hiring of FM Facility Maintenance with the promise of a decrease in maintenance fees, which actually ended up being a 25 percent increase, instead.

To add insult to injury, we were introduced to a new and improved Asset Protection Department that became—according to their own admission—a revenue-generating department. Guess where the revenues were generated? If you are having difficulty with that question, please email me.

Concurrent to all of this, SEI waged an unprecedented attack on our independent contractor status with programs like BT—which places all sorts of restrictions on how we place orders and receive deliveries—and the all-intrusive DVR security system installed in our stores.

Franchises have complained and have tried very hard to reason with SEI in order to reverse all of these courses, but with no success. So what is next? Where do we proceed from here?

After exhausting all venues, we have found ourselves backed in a corner with only one recourse left to us—fight back. We did not put ourselves in that corner; we were shoved and pushed there by SEI’s actions. I, for one, am not happy in that corner. However, I am here, stuck and not afraid to fight back.

How do we get out of this fighting corner? The answer is very clear: only SEI can take us out from there by stopping and reversing the above-mentioned trends of draining money from our pockets and pouring it into theirs, and by treating us more as independent contractors rather than some un-glorified store managers.

Until such time we will continue to be vocal and vigilant and not let our guards down. None of us enjoy being in this position. We will talk and engage SEI to improve our bottom lines, but we are not removing our eyes from the main objectives mentioned in this article.

This is my opinion and I welcome yours.