FM Billing Issues
Facilities and maintenance are an important function of our business, because equipment is directly related to sales. We need to have all of our revenue-generating equipment properly running 24 hours a day. In the recent past we’ve had challenges with facilities and maintenance—like keeping the equipment up, lackluster repair response times, and problems with the maintenance contractors (skill levels and procurement of parts, particularly). After the last franchisee survey, when we realized facilities and maintenance problems were a system-wide issue, we began to focus on the fix, and we’ve made some recent strides to improve.
Years ago, the cost of maintenance was not an issue. Competition in our industry was not as intense, the economy was strong and customer counts were higher. In the current business climate, every aspect of running the store is being scrutinized for updating and cost savings. About 18 months or so ago, when SEI decided to have a new national company, Facility Maintenance (FM), handle the upkeep of our stores, response levels went down and franchisees developed a lot of issues with service and procedures. To be fair, even for a national company like FM, there is a large learning curve at 7-Eleven. Our stores employ a lot of equipment, and perhaps some service technicians were not prepared for all of the different kinds of equipment we use.
Today, FM has come up to speed, and response times—as well as the uptime of our equipment—have improved. Occasionally we still have challenges with the contractors not having parts with them, but I do believe that FM is working hard to have all commonly needed equipment parts kept in stock. However, maintenance is like a garden that needs constant tending, and lately franchisees have had issues with FM on invoicing, coding of work done, and the process by which we can get credit for charges in dispute, especially franchisees being billed for maintenance calls as either non-contract or nuisance calls.
When an FM technician performs maintenance in a store and the franchisee is not present, store associates busy or otherwise occupied with customers often sign off on invoices without knowledge of what work was done, parts ordered, or the time involved in fixing the equipment. The technician makes notes on the work order, and automatic coding at FM takes over and ends up classifying the work as a nuisance call. The franchisee finds out after the fact that his or her open account has been billed for the call.
On April 25, National Coalition officers met with SEI and FM managers in Dallas in an effort to talk through these problems. We pointed out that when a maintenance call is placed to FM and it is auto-coded, the human element we used to have is missing, causing a lot of these auto-coded calls to be billed to franchisees. Even if the franchisee disputes the charge and it is reversed, the credit for the invoice may not be credited back to the franchisee’s open account for many months. The storeowner also will have problems fighting it because the clerk signed off on the job.
The last thing franchisees want to do is take valuable time away from customers and other activities of running a store to retrieve maintenance call credits. It seems like FM has realized the issue and has made a commitment to thoroughly review any invoice that is getting uploaded to franchisee financials. FM officials told us they have instituted a call checking system that involves four layers of people in their accounting department to review the coding and ensure that franchisees are being billed correctly. Since this new procedure has just been implemented, we will monitor the situation carefully to see if it is effective.
We are cautiously optimistic about the future for improving maintenance because franchisees in the past have been promised many things from maintenance that haven’t materialized. We are anxious to see FM deliver on their promises and free franchisees from the frustration of pursuing maintenance charges. We want to focus on selling Slurpees and hot dogs.