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Franchise Owners Overwhelmingly Believe Store Profits Will Drop If They Sign New Agreement

October 9, 2018

SAN ANTONIO--(BUSINESS WIRE)--Oct 9, 2018--A new survey of 7-Eleven franchise owners shows the growing divide between the franchisees who operate 7-Eleven stores and their corporate management. Franchise owners are currently facing an impossible decision regarding the future of their businesses and their livelihoods.

7-Eleven is pressuring all franchise owners to sign a new franchise agreement by December 31, 2018, even though less than 25 percent have agreements that expire between now and 2020. Among those questioned in a National Coalition of Associations of 7-Eleven Franchisees ( NCASEF ) survey, less than 5 percent agreed with the statement, “Based on the new 2019 agreement, my stores(s) will be more profitable.”

The Franchisee Satisfaction Survey was sent to over 5,300 franchised stores. The majority of the 767 respondents are long-time franchise owners (77 percent have been franchisees for over 5 years, and 27 percent have been franchisees for more than 15 years). According to the survey, 43 percent believe that 7-Eleven’s 2019 franchise agreement is the No. 1 issue they face today; 37 percent believe franchisee profitability is most important.

Evident in the survey results is an overall sense of mistrust in 7-Eleven corporate management as well as the belief that those in power do not have the best interests of franchise owners at heart.

Among the findings:

Question No. 11: Based on the new 2019 agreement, my store(s) will be more profitable.

85 percent disagree 5 percent agree 10 percent neutral

Question No. 8: If I had it to do it all over again, I would choose to enter the 7-Eleven system as a franchisee.

72 percent disagree 18 percent agree 10 percent neutral

Question No. 15: 7-Eleven gets the lowest cost of goods from vendor partners.

79 percent disagree 12 percent agree 9 percent neutral

Question No. 4: 7-Eleven executives are honest and ethical.

65 percent disagree 14 percent agree 21 percent neutral

Question No. 20: 7-Eleven puts franchisees’ success first.

84 percent disagree 8 percent agree 8 percent neutral

The 2019 franchise agreement includes provisions which directly affect the ability of franchisees to operate their stores independently. It also mandates all stores remain open on Christmas Day.

“Franchise owners are at a crossroads,” said Jay Singh, NCASEF Chairman. “In many parts of the country, more stores are for sale than ever before, and this is a direct result of the unfair franchise agreement which has been put forth. The agreement takes away our ability to remain profitable, operate independently and grow our businesses. It is very telling when 72 percent of owners say they wouldn’t purchase a store again and 80 percent say they don’t believe management has franchisees’ best interests at heart.”

Singh has repeatedly asked 7-Eleven President and CEO Joseph DePinto to sit down to negotiate a new agreement – one which is fair to both sides. To date, those requests have gone unanswered.

Full survey results are available here.

About the NCASEF is the national trade association for 7-Eleven franchise owners. Originally founded in 1973, NCASEF is comprised of 44 Franchise Association members who represent more 4,500 7-Eleven owners in the U.S.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181009005341/en/

CONTACT: Ellis Strategies

Darcie Fisher, 774-281-3506

darcie@ellisstrategies.com

KEYWORD: UNITED STATES NORTH AMERICA TEXAS

INDUSTRY KEYWORD: CONVENIENCE STORE RETAIL FOOD/BEVERAGE

SOURCE: The National Coalition of Associations of 7-Eleven Franchisees

Copyright Business Wire 2018.

PUB: 10/09/2018 09:30 AM/DISC: 10/09/2018 09:30 AM

http://www.businesswire.com/news/home/20181009005341/en

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