A Widening Gap: The Haves And The Have-Nots
When I first came into the 7-Eleven system a little more than a quarter century ago, life was simpler and the majority of franchisees expected to have only one store. Things have changed drastically since then, and today all but the luckiest franchisees find it tough to survive as single store operators.
I know in Chicago many of my fellow franchisees had dreams of becoming small businessmen running convenience stores independently and living comfortably off the proceeds. Some of us are doing well due to the luck of a good volume store, but many of our members are struggling hard to survive in a very changed and challenging convenience store environment.
Multiple-store franchising and partnerships, not even allowed when I got into 7-Eleven, are much more common now, and as a result a franchising system within SEI’s franchising system is flourishing. Franchisees who are struggling have no choice except to join in and become a part of this rat race, but we all find it hard to compete with franchisees of high volume stores.
The financial leverage high volume store franchisees enjoy enables them to easily outspend low volume storeowners to fulfill all of SEI’s requirements for being a multiple owner. This happens in spite of the fact that the franchisee of a low volume store has to work a lot harder, and be a lot more organized just to run a successful low volume store where mistakes are hard to overcome and even ordering decisions become more critical, to say nothing of the difficulty of raising the franchising fee.
The result is that even great franchisees with low volume stores are falling further behind, and the financial gap between the have and the have-not franchisees is widening. Compounding this is the fact that SEI’s help to franchisees of low volume store comes with a set of conditions and demands that are very difficult to fulfill in the time frame required.
Another very devastating factor for low volume stores is the increase in minimum wage, not just because of our tight profit scenario, but because the introduction of the fresh and hot foods program already is adding many hours to our labor costs. Franchisees of high volume stores will survive, even if they have a reduced income, but franchisees of low volume stores will have trouble meeting these new wage scales.
In this, our final stretch to the finish line and a new 2019 contract, franchisees of higher volume stores must try to help fellow franchisees of low volume stores to serve the good of the franchise community. High-volume storeowners moving into leadership positions at the National Coalition, on the NBLC, and the CEO Roundtable must work for co-prosperity and the good of the entire franchisee community.
Low volume storeowners soon will be asked to attend the company’s 7-Eleven Experience, but we have neither the resources to attend, nor the representation to change our status once we get there. We must develop a low volume stores committee at the National Coalition and a parallel committee at the NBLC to give representation to these folks as the 2019 contract approaches. Low volume stores have special problems, and only those who have been there have any real understanding about the hardships and day-to-day challenges involved.