National coalition set to address concerns over corporate’s new franchise agreement.
More than 1,100 7-Eleven Inc. franchisees will convene in Orlando this week for the annual convention of their independent franchisee association, NCASEF (National Coalition of Associations of 7-Eleven Franchisees).
The theme of this year’s convention is, “Franchisees are the Brand.” According to NCASEF, which comprises less than 4,300 store franchisees, 7-Eleven has unveiled a new franchise agreement, which thousands of operators with agreements expiring in 2019 and 2020 must sign.
Jay Singh, chairman of the national coalition, says the agreement reflects the company’s greed and fails to address franchisee concerns as outlined in a 27-point memo delivered to the 7-Eleven.
“We outlined for the company the most important issues facing franchisees issues which are impacting franchisee profitability and quality of life,” Singh said in a prepared statement. “The agreement they are offering will make it increasingly more difficult for our franchisees to realize a profit for their hard work and dedication to the 7-Eleven system.”
Some of the most issues in the new agreement include:
- A $50,000 franchise renewal fee.
- A new Graduated Gross Profit Split that gives 7-Eleven as much as a marginal 59 percent share off the top, even as franchisees must absorb higher operating costs..
- No guarantees that the cost of goods franchisees receive from the 7-Eleven supply chain will be lower than what they could buy at a local big-box retailer.
- Legal provisions where franchisees: pay 7-Eleven’s court fees even if they win their case, give up their right to a jury trial and be subject to the governing laws of the state of Texas regardless of where they operate their stores.
- More franchisees have registered for the 2018 conference than for any previous convention, which, according to Singh, is a result of 7-Eleven operators’ uncertainty and apprehension surrounding the new agreement.
7-Eleven, headquartered in Irving, Texas, released a statement to coincide with ongoing discussions with NCASEF.
“We offer 7-Eleven Franchisees world-class training, and ongoing corporate support to help their independent businesses succeed. 7-Eleven is committed to franchising and proud of the fact that over 90% of the brand’s stores are operated by franchisees as independent contractors. During the past 10 years, the 7-Eleven brand generated over 15 billion dollars in earnings for small, community focused businesses across the country. In fact, last year 7-Eleven franchisees collectively earned more money in a single year than any other year ever before. We enjoy a strong, productive relationship with our independent franchisees, which is one reason why Entrepreneur Magazine selects 7-Eleven as a Top Franchisor of The Year each year,” the statement said.