7-Eleven franchisees are calling on their franchisor to take another look at its requirement that retail locations begin their round-the-clock operations again starting on May 24, 2021, as they are “faced with a crippling shortage of labor, higher operating costs, lower gross margin and lower net profit,” according to a Monday (May 3) announcement.
The National Coalition of Associations of 7-Eleven Franchisees (NCASEF) is calling for 7-Eleven Inc. (SEI) to adjust the terms of the present franchise agreement.
“As labor and other direct store operating expenses keep increasing, franchisees are earning less and working more,” said NCASEF Executive Vice Chairman Michael Jorgensen. “One possible remedy for franchisees is to raise retail prices, but that creates a competitive disadvantage in the marketplace, which can adversely affect sales and profits.”
While SEI’s fresh foods program “follows a broader emphasis in the convenience store industry,” according to the announcement, the initiative reportedly brings about demand for greater labor.
“7-Eleven wants to be a place that customers think of for fresh food, but our franchise agreement is based on a convenience store model, not a quick-service restaurant model,” Jas Dhillon, NCASEF treasurer and Los Angeles-area franchisee, said in the announcement.
Companies in the service sector are having a difficult time hiring, even with the relaxation of pandemic-related limitations throughout the nation. As a result, some national and sizable quick-service restaurant (QSR) companies have kept dining areas shuttered, and other merchants have reduced their operating hours, according to the announcement.
SEI gave the green light to franchisee requests to close overnight when the pandemic hit. However, franchisees now say that finding labor to work overnight shifts will be very difficult. Moreover, franchisees in a number of markets say that overnight sales barely cover labor expenses. A number of franchisees will have to work the shifts themselves with the dearth of available labor, according to the announcement.
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