The Franchisee Independent Contractor


Over the last several months, we have heard a lot of talk regarding changes within the cigarette category in our 7-Eleven stores. These changes have impacted our sales and made us realize that we need to be more competitive with tobacco.

When we were confronted with the Marlboro leadership program recently, 7-Eleven actually stood back as a company and did things we have not done in several years—like take a hard, close look at our competition. In my own geographic area, we were asked to go out and shop the competition to find out where we stood on cigarette pricing. Doing this brought us back to the realization that we are franchisees, and we are independent contractors, and we need to be cognizant of the competition. With the day-to-day demands of running our businesses, we don’t often have this opportunity.

There has been overwhelming support for the direction that 7-Eleven is headed on the tobacco front. Franchisees are overwhelmingly in favor of taking back the cigarette category and having control over how we merchandise it. We don’t want the set dictated to us by someone on the outside. Having complete control of the cigarette category demonstrates our independence, and will ultimately benefit our stores, our sales, and our profits.

All this leads to the fact that we as franchisees want to be known as storeowners and, more importantly, as independent contractors. Our emphasis has always been on communicating the fact that we are the owners of our stores. A lot of this gets lost when a company or manufacturer comes in and says, “I received this letter from my higher-ups and you need to do such-and-such.” When this happens we have to take the time to tell them that we, as franchisees and independent storeowners, have the option to either go along with a product or service, or to decline it. In some cases, this could lead to a misunderstanding, because sometimes these folks believe they can walk into our stores and do whatever they want, but this is not true.

Although most of our field consultants treat us with respect as storeowners and independent contractors, there have been a couple of instances where FCs have gone into a franchisee’s store and, in front of their staff, said, “You have to do XYZ.” The franchisees who have experienced this said they were left with the feeling that they really work for SEI and don’t have independence, and they felt they lost some of the respect of their employees.

Nevertheless, the independent contractor status goes a long way, even with the 85 percent purchase requirement. The 15 percent definitely needs to be managed correctly to maximize sales and profits for your store, and most importantly, to meet the needs of your customers. The best advice I can give any storeowner is to document those occasions when you don’t agree with your FC or a manufacturer, and register your objections with the company. This may help achieve the balance of control we need as independent contractors in charge of our own businesses.

It is very important that we project the fact that we, as franchisees, ARE the business OWNERS. At the last National Coalition convention in 2010, my good friend Dick Newmark received an award for his 48 years as a franchisee. His comment to us at that time was, “We are all franchisees and we are all independent storeowners.” If we remember these words and maintain the independent contractor standard in the face of any opposition, all levels of management will be forced to recognize us as stakeholders and shareholders in the business. Together we can take 7-Eleven to new heights, and keep our independent storeowner status that we are so proud of.