Fixing Some Of Our Operational Issues

I continue to hear from franchisees throughout the country who have many concerns regarding the operation of their stores. The biggest concern that 7-Eleven franchisees currently have is the declining gross profit. You can list many reasons for this decline. You can say it’s because of cost increases, trying to keep up with the competition, or SEI’s move into fresh foods and especially hot foods. The company has made the investment in the equipment and the franchisees are trying to profit through this process, but it has increased our labor line and write-offs, which has resulted in lower profitability.

I tried to think back when the financial decline actually started for franchisees. After giving it some thought, our direction, as we have been told, is that we need to watch out for the competition. They are becoming more aggressive and they want part of our business, which is absolutely true. But our efforts to keep our competitors at bay have come at a price. We are currently running a lot more promotions to keep up with the competition. At a recent meeting with SEI, franchisees expressed their concern over the number of promotions we have every month, and as a result it is being scaled back.

We now have to devote more time scheduling our employees’ hours in order receive deliveries from our vendors. While we have a delivery window so we know when to expect the products to arrive, in a lot of cases stores have had to hire an extra person so that window is covered. This has increased the labor expenses of many franchisees because it is not an option anymore to run a store with single coverage when deliveries come in.

Secondly, we need to take a closer look at the delivery windows when stores are actually receiving their deliveries. In many situations, I hear that it is impossible for stores to receive deliveries on a Friday or Saturday evening because those are exceptionally busy times. It takes away from store associates being able to focus on guests, and trying to do both is sometimes impossible. Also, a lot of these deliveries should be made during the daytime. Some of our deliveries are coming at night and we have incurred theft, and some of our suppliers have had their trucks broken into while they were making the delivery to the store.

My recommendation is that we as 7-Eleven franchisees should be able to take control of when our deliveries are made. We should develop a feasible delivery system where both SEI and franchisees would be satisfied and we can focus on growing our businesses.