Avanti November/December 2014

T H E V O I C E O F 7 - E L E V E N F R A N C H I S E E SNovember/December 2014

Is Change In TheAir?SEI Reaching Out To Franchisees

We Are Making ProgressMinimum Wage IncreasesWill Impact Our Businesses

Franchisees Should Be Seen And HeardDawn Of A New Era—Or Is It?

Disconnect With Store-Level Reality?Our Meeting With SEI Upper Management

Our Chicagoland Meeting With SEI ExecutivesAn Image Factor

Fighting For Franchisee RightsThe Franchisee FLW

Rebuild Franchisee Confidence

www.ncasef.comVisit the National Coalition’s

Website at

NCASEF 40th Annual Convention & Trade Show

IN COOPERATION WITH FOA CHICAGOLAND

July 27-31, 2015

AAnnnniivveerrssaarryy

4

27 We Are Making Progress By Joe Galea, Chairman, NCASEF

29 Mimimum Wage Increases Will Impact Our Businesses By Jivtesh Gill, Executive Vice Chairman, NCASEF

33 Franchisees Should Be Seen And HeardBy Eric H. Karp, Esq., General Counsel, NCASEF

37 Dawn Of A New Era—Or Is It? By Jas Dhillon, Vice Chairman, NCASEF

41 A Disconnect With Store-Level Reality?

By Roger St. George, Vice Chairman, NCASEF

43 Our Meeting With SEI UpperManagement

By Paul Lobana, Vice President, Southern California FOA

53 Our Chicagoland Meeting With SEI Executives

By Ken Patel, President, FOA Chicagoland

49 Fresh Opportunity In The Packaged Bakery Set

By Kelly Fulford, General Mills Convenience & Foodservice

67 Healthcare Insurance Open Enrollment Is Happening Now!

Guest Column From Lewer Benefits

T H E V O I C E O F 7 - E L E V E N F R A N C H I S E E S

Contents

Member News...................................................12Apple Pay, ObamaCare, Couche-Tard Buys Pantry, 7-Eleven On Top200, Holyoke Store Banned, Philly Franchisee Sues, First Harlem Loca-

tion, Amazon Via Taxis, More Healthy Products, Banks Can Sue Target,Tighten Debit Card Security, Swisher Acquires Drew, Couche-Tard’s NetEarnings, Disability Lawsuits, Dinner-Time Sales, Digital Driver's License, Holi-day Coat Tradition, Coffee War, NACS Luncheons,Smokers For Dollar-Store Chains, CVS Revenue Rises,Illinois Tax Fraud, POS Malware Infections, NACS Pro-tection Tips, East Coast FOA Files

Legislative Update ...............................................................20Four States Raise Minimum Wage, Chicago Minimum Wage, FDA Calorie La-

bels, Retail Workers Bill of Rights, Massachusetts Paid Sick Time, Florida OnlineLottery Sales, Sugar Tax, Massachusetts Bottle Law, Capping Soda Size, Sunday Al-cohol Sales, Cities Raise Tobacco Age, Virginia Cigarette Retailers

SEI News.....................................................................................................80NY Franchisee Queen Of Coffee, Record Donation To CARRE, OTC Drugs Intro-duced, Local Music Program, U.S. Military Veterans, Free Car Washes, Pay-It-For-ward Pizza, Go Bananas

Bits & Pieces.........................................24Vendor Focus..........................................83Franchisee Calendar......................86

DEPARTMENTS

November/December 2014

AVANTI is published by the National Coalition of Associations of 7-Eleven Franchiseesfor all independent franchisees, corporate store managers, area licensees and interestedparties. National Coalition offices are located at 740 Front Street, Suite 170, Santa Cruz,CA 95060. For membership information, call 831-426-4711, [email protected] or fax to 831-426-4713. AVANTI Editorial and AdvertisingOffices are located at 116 Bellevue Ave., Suite 304, Langhorne, Pennsylvania 19047. Foradvertising information, call Sheldon Smith at 215 750-0178 or fax to 215 750-0399;on-line, send messages to [email protected].

NOVEMBER | DECEMBER 20 14 AVANTI 11

Page 56

SPECIAL FEATURES16 New Stores Vs. Old Stores:An Image FactorBy Ajinder Handa, President, Greater Seattle FOA

18 The Franchisee FinancialLoss WorksheetRay Dhaliwal, President, Greater Bay FOA

46 Fighting For FranchiseeRights In The LegislatureBy Jaspreet Dhillon, President, California 7-Eleven Franchisee PAC

68 Rebuild Franchisee Confidence And Pave A Road To SuccessBy Romy Singh, President, Eastern Virginia FOA


IN COOPERATION WITH FOA CHICAGOLAND

July 27-31, 2015Page 14


NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEESNATIONAL OFFICERS

Joseph GaleaNATIONAL CHAIRMAN

831-426-4711 • [email protected]

Jivtesh GillEXECUTIVE VICE CHAIRMAN


Eric H. Karp, Esq.GENERAL COUNSEL


Roger St. GeorgeVICE CHAIRMAN


Jatinder SinghVICE CHAIRMAN


Jas DhillonVICE CHAIRMAN


Maninder WaliaTREASURER


CONVENTION CHAIRPERSON

[email protected]

John RiggioMEETING/TRADE SHOW COORDINATOR


Sheldon SmithAVANTI PUBLISHER

ADVERTISING MANAGER


The Voice of 7-Eleven FranchiseesNovember/December 2014

©2014 National Coalition of Associations of 7-Eleven Franchisees

Avanti Magazine is the registered trademark of The National Coalition Of Associations Of 7-Eleven Franchisees.

Sheldon SmithPUBLISHER & ADVERTISING SALES

215 750-0178

[email protected]

John SantiagoASSISTANT EDITOR

215 750-0178

[email protected]

Tricia KesslerGRAPHIC DESIGN

KESSLER DIGITAL DESIGN

7-Eleven Shuts Out Apple Pay

7-Eleven is among several heavyweightretailers that have decided not to acceptApple Pay, Apple's mobile payment systemfor the iPhone 6, reported The Verge. That’sbecause SEI, Walmart, Kmart, Rite Aid, BestBuy and a significant number of other mer-chants—though a joint venture formed in2012—are building their own mobile pay-ment app called CurrentC, which is ex-pected to launch next year. In themeantime, these retailers have no intentionto support Apple Pay.

7-Eleven Ranks #2 OnFranchise Times Top 200

7-Eleven hascome in second onthe FranchiseTimes Top 200ranking of the

country’s largest franchise systems,with McDonald’s taking the #1 spot.The rankings measure franchise per-formance based on total worldwidesystem sales. 7-Eleven generated $84.5billion in sales with 45,696 interna-tional units, while McDonald’s made$89.1 billion with 21,151 units. Ontheir own, 7-Eleven and McDonald’srepresent 16.5 percent of all sales inthe Top 200. The top 10 franchises,meanwhile, represent nearly half ofthe total sales for the 200—$292.6 bil-lion overall. There was very little

change among the top franchises on the list.The top seven—McDonald’s, 7-Eleven, KFC,Subway, Burger King, Hertz and Ace Hard-ware—remained unchanged this year. CircleK and Pizza Hut switched spots to No. 8 andNo. 9, respectively, but there were no new-comers to either the Top 10 and the Top 25.

Holyoke Store Banned FromSelling 7-Eleven Items

A U.S. district judge recently ruled thata Holyoke, Massachusetts convenience storebeing sued by SEI cannot sell 7-Eleventrademarked products or "confusingly sim-

ilar" items until the lawsuit is set-tled, reported The Republican. Theruling came five months after SEIterminated the storeowner’s fran-chise agreement, claiming thestore routinely shortchanged thechain by underreporting sales ofcigarettes, soda and other items.The judge also rejected SEI’s asser-

tion that the storeowner and her husbandshould be banned for one year from doingbusiness at the location, and also rejected a

“Other merchants—though a jointventure formed in 2012—arebuilding their own mobile pay-ment app called CurrentC.”

Congratulationsto SergeHaitayan, FresnoFOA, HashimSyed, FOAChicagoland, and Jas Dhillon, FOA of Greater LA, who wereelected vice chairmen of the National Coalition for a two-yearterm beginning Jan. 1. Right: Bob Price, Texas FOA, Jerry Sah-nan, Phoenix FOA, and Bill Huffman, Columbia Pacific FOAserved on the election committee.

continued on page 14

12 AVANTI NOVEMBER | DECEMBER 20 14

continued from page 12


request by the storeowners to reinstate theirfranchise rights.

During a hearing in U.S. District Courtin July, the storeowner denied any financialmisconduct and said she was being pun-ished for refusing to stock blueberry dough-nuts, apple fritters, egg salad sandwiches andother unpopular items. In court filings, shealso cites a California lawsuit alleging that 7-Eleven has participated in a pattern of dis-crimination and intimidation against SouthAsian franchise owners.

Couche-Tard Buys PantryCanadian c-store operator and Circle K

parent company Alimentation Couche-Tardrecently acquired Pantry Inc., which runs anetwork of stores in the southeastern UnitedStates, for about $860 million in cash, re-ported the New York Times.The companiessaid the deal was worth about $1.7 billion,including the assumption of debt. It is ex-pected to close in the first half of next year.Pantry, which is based in Cary, N.C., oper-ates about 1,518 stores in 13 states, primarilyunder the Kangaroo Express name. Couche-Tard has 6,300 convenience stores acrossNorth America versus 8,300 for 7-Eleven.

7-Eleven Promotes ObamaCare

ObamaCare ads are appearing on 7-Eleven receipts at more than 7,000 storesnationwide as government health officialsexpand their outreach in the second year ofhealthcare sign-ups, reported The Hill. In-formation about ObamaCare sign-ups nowappear on the bottom of receipts for anyoneusing mobile payment company PayN-earMe, which allows bank-less customers topay a utility bill, rent, or buy a bus ticket instores like 7-Eleven and Family Dollar.“Putting these reminders at the bottom ofPayNearMe receipts will help get health



website at


IN COOPERATION WITH THE CHICAGOLAND FOA

Sheraton Chicago Hotel and TowersJuly 27-31, 2015

Trade Show: July 30-31, 2015


Chicago,Illinois

Join us in Chicago as we cele-

brate 40 years of franchisee unity!

The NCASEF Convention Com-

mittee is hard at work planning an

extra special convention and

trade show, one you will definitely

not want to miss! Franchisees,

vendors and SEI management are

all invited to this blowout event,

booked at one of the finest hotels

in Chicago—the Sheraton Chicago

Hotel & Towers!



During the past few years, 7-

Eleven, Inc. has achieved unprece-

dented numerical growth. This came

about due to the aggressive policy

adopted by the company for tradi-

tional store development, the Business

Conversion Program (BCP), and acqui-

sitions. SEI currently franchises or li-

censes around 10,000 stores in North

America. Globally, there are more than

51,000 7-Eleven stores in 16 countries.

From 2011 through

the 2013 fiscal

year, the

company

opened

more than

2,000

stores, in-

cluding stores

acquired from

TETCO, CL

Thomas, Fast Track, EZ Energy

USA, Handee Marts, Prima Marketing,

ExxonMobil, Sam’s Mart, Open Pantry,

Strasburger Enterprises and others.

This expansion netted 7-Eleven the No.

1 spot on Convenience Store News’

“Top 20 Growth Chains” list.

7-Eleven’s total store sales in-

creased 14 percent in the 2013 fiscal

year compared to the prior year, rising

to nearly $12.3 billion. The double-digit

increase was due primarily to higher

gasoline sales, which were up 20 per-

cent over the year. Net income, how-

ever, was flat at about $220 million

over the same period. This year, we can

predict that 7-Eleven’s net income will

be around $300 million unaudited.

The 7-Eleven brand

has been getting numerically

and financially bigger and

stronger with the newly ac-

quired stores and increased profit

margins across the board. This growth

has been achieved partly by siphoning

the resources that were usually allotted

for remodeling old stores and replacing

their old equipment. There has been no

high-volume national rollout to replace

the old and outdated fixtures. In fact, at

one point the crunch was so taxing that

normal, day-to-day replacement items

like shelves and glides were not easily

available. The scale for replacement of

the essentials has also been at a mini-

mum, restricted to things like changing

age-old slant backs and adding new

candy racks in front of the sales

counter.

Stores remodel for countless rea-

sons, but the ultimate factor is competi-

tion. When a competitor develops a

fresh new concept, such as introducing

an expanded deli, existing stores often

decide to remodel as a competitive ne-

cessity. If the existing store is aging, the

retailer’s desire to renovate in the face

of new competition is even stronger.

Presently, a majority of old 7-

Eleven stores are extremely behind

their nearby competition. The brand

name 7-Eleven is not being represented

and maintained at a high level among

its competition. There now lies a great

danger that, if old stores are not

brought to the level of new stores and

existing competition, we are likely to

lose the competitive edge gained over

these years. Patchy contractual jobs

carried out in the past must give way to

new, honest remodeling. There is an ur-

gent need to equip old stores with the

same new equipment being provided to

new stores. An aesthetically pleasing

layout and new equipment are compli-

mentary to the excellent customer serv-

ice and good store operation that

7-Eleven is known for.

Old stores, which are the primary

source of 7-Eleven’s growing success,

have been neglected for the past 10

years. Not too long ago, a young cus-

tomer said to me, “I don’t want to shop

in a store where my grandfather and

father used to shop with the same grill

and Slurpee machine. I want some-

thing new.” He also mentioned that

such “museums” are seldom visited. 7-

Eleven, Inc. needs to address the issue

of store image before somebody else

takes our place on the top retailers list

in Forbes magazine. Time is really of

the essence for this issue.

New 7-Eleven Stores Vs. Old 7-Eleven Stores: An Image Factor


website at

By Ajinder Handa President, Greater Seattle FOA

“For several years, the 7-Eleven brand has been getting numerically and financially bigger and stronger with newly acquired stores and increased profit margins across the board.”

“Unfortunately, many old 7-Eleven stores areextremely behind nearbycompetition. The brandname 7-Eleven is not being represented andmaintained at a high levelamong its competition.”

coverage information into the hands of tra-ditionally hard-to-reach consumers,” theU.S. Department of Health and HumanServices wrote in a statement.

7-Eleven Opens FirstHarlem Location

SEI has announced it plans to open itsfirst 7-Eleven store in the Harlem section ofNew York City in either the summer or fallof 2015, reported the New York Daily News.The store will be located at 256 W. 116th St.,formerly home to a restaurant and a fast-food joint. SEI has been rapidly expanding

its presence in the Big Apple. It counted 124stores in the city at the close of 2013, accord-ing to the Center for an Urban Future, whichnoted 7-Eleven was the latest retailer with atleast 100 locations in New York. The com-pany has plans to open additional shops up-town, but said it’s too early to say where.

Philly Franchisee Sues SEIA Bucks County, Pennsylvania man

who had started several 7-Eleven franchisestores in the Northeast Philadelphia areaclaims in a lawsuit that SEI wrongfully ter-minated his contract and seized merchan-

dise assets without properly reimbursinghim, reported The Pennsylvania Record.Harshal Patel, of Langhorne, Pa., said SEI’sactions are part of a strategy to force outlongtime franchise holders and sign newdeals with new owners, a practice that allowsthe company to collect new transfer fees andcreate contracts more beneficial to 7-Eleven.

According to the complaint, Patelopened five stores in 2011 and built up astrong and loyal customer base. After morethan a year of establishing a viable business,Patel claims SEI accused him of violatingprovisions of the franchise agreement andterminated the agreements, seizing the store

At the last National Coalition Board meeting in No-

vember in Hawaii, I presented a plan to bringabout permanent systemic changes that will im-prove fairness and accuracy when it comes toour financial bottom lines. I call it the FranchiseeFinancial Loss Worksheet (FFLW), and I asked thechairman, executive officers and Board of Direc-tors for approval to move this plan forward.

The purpose of the FFLW is to level the finan-cial playing field by helping franchisees recover

monies lost due to accounting errors, erroneouscharges, audit incompetency, demand chain inade-quacy, excessive equipment down time, and gov-ernment regulatory compliance failure. The processinvolves collecting data and documentation fromour ISPs that are readily available, and putting it alltogether with a one page form to present to theappropriate department or authority at SEI in orderto clearly point out the errors and get reimbursed.

When completed and operational, the FFLWworksheet and process will have been sancti-

fied by our accounting people—not SEI’s ac-counting department—and by NationalCoalition General Counsel Eric Karp. As such,when it is presented to SEI with all supportingdocuments it will be fool proof—no ifs, ands, orbuts. The FFLW will allow us to speak in thesame language that SEI speaks to us. We worktoo hard in our stores, only to have moneytaken from us at the end of the month, whetherit’s a few cents, a few dollars, or thousands ofdollars. With the FFLW, there will be a processand logical system in place to correct these er-rors and recover our money.

To get the FFLW system off the ground, we

need to first form a committee, then identifysubject matter experts, define categories and el-ements of each category, develop sources of in-formation, design the final document forsubmission, and finally, populate data and testrun the process for validity and accuracy. Per-haps the most essential step is recruiting thesubject matter experts, people who are savvyand understand the 7-Eleven accounting systeminside and out. They will play a big roll in devel-oping the FFLW process and form. The finalproduct will be a one-page form that will informSEI of the errors committed and the reimburse-ment expected, and attached to it will be all thesupporting documents and data. It will be muchlike the front page of the FIW issued by SEI,which tells us how much we owe.

I think SEI wants to be accurate in its ac-counting, and we can help them be accurate. Thisis not an attack. This is helping SEI and us. Butour franchisor is only going to respect us if we doour homework. If we document what we're say-ing and support it with analysis by independentexperts with credibility, it cannot be challenged.

So far, Chairman Joe Galea and the execu-tive officers have approved the formation of thecommittee. I will keep you updated as recruitthe subject matter experts and move FFLW de-velopment forward.

continued from page 14www.ncasef.com

Visit the National Coalition’swebsite at



The Franchisee Financial Loss WorksheetBy Ray Dhaliwal, President, Greater Bay FOA

“I think SEI wants to be accurate in its accounting,and we can help them be accurate.”

and inventory without properly compensat-ing him for the goods. Patel claims the con-tract termination did not follow the processdescribed in the agreement, including a fullaccount of the reasons for the move and anopportunity for the franchise owner to cor-rect any perceived wrongdoing.

Amazon Testing Deliveries Via Taxis

Amazon.com Inc. this fall tested packagedelivery by licensed cab in San Francisco andLos Angeles using taxi-hailing mobile appFlywheel, reported the Wall Street Journal.Taxis represent Amazon’s latest experimentto speed package shipments to compete moredirectly with brick-and-mortar retailers, andto seek alternatives to United Parcel Service,FedEx and the U.S. Postal Service after ship-ping delays during Christmas 2013. Sincethen, Amazon has tested its own deliveryservice, broadened its use of regional couri-ers, teamed up with the Postal Service to de-liver fresh groceries and is expected to opena Manhattan storefront for returns, pickupsand same-day dispatch. Amazon also is de-veloping aerial drones for package drop-offs.

More Healthy Products Hit Store Shelves

More than 30,000 healthier productchoices have been made available to con-sumers between 2002 and 2013, according tothe 2014 Health & Wellness Survey releasedby the Grocery Manufacturers Association(GMA). The new choices represent an addi-tional 10,000 in just the last four years. Addi-tionally, food and beverage companiesreported that they collectively have:• Eliminated or reduced trans fat in morethan 11,000 product choices• Eliminated or reduced saturated fat in morethan 8,000 product choices• Reduced sugar/carbohydrates in more than


Four States Vote ToRaise Minimum Wage

Voters in four states approvedmeasures on November 4 to raise theminimum wage. According to the New

York Times, Alaska would set its minimum wage the highest, with a gradual rise to$9.75 by 2016. Nebraska would go to $9 in 2016, South Dakota to $8.50 in 2015 andArkansas to $8.50 by 2017. In Alaska and South Dakota, the minimum wage wouldcontinue to rise in line with price inflation in following years, which makes an enor-mous difference in the long term. The wage increase won its biggest margin of victory inAlaska, where it garnered 69 percent of the vote. In Arkansas,it received 65 percent; in Nebraska, 59 percent approved rais-ing the minimum wage, while in South Dakota, the marginwas 53 percent. Currently, 23 states and the District of Co-lumbia have a minimum wage higher than the federallevel of $7.25. That number will jump to 26 inJanuary, when higher minimum wages take ef-fect in Hawaii, Maryland and West Virginia.In Illinois and counties in Wisconsin, voterson November 4 supported hikes throughnonbinding advisory initiatives intended tosend messages to state lawmakers.

City Council Raises Chicago Minimum Wage The Chicago City Council recently approved Mayor Rahm Emanuel’s plan toincrease Chicago’s minimum wage to $13 an hour by mid-2019, reported the ChicagoTribune. Under the new ordinance, Chicago’s minimum-wage workers will see theirfirst increase next July, when the rate jumps to $10 an hour from the current statewidehourly rate of $8.25. It then will increase by 50 cents in July 2016 and another 50cents in July 2017. After that, the minimum wage would go up $1 in July 2018 and$1 in July 2019 to reach $13 an hour. After 2019, yearly increases would be peggedto the local consumer price index, with a limit of 2.5 percent, if the unemploymentrate stays below 8.5 percent.

Minimum Wage Raised In Two California Cities San Francisco voters overwhelmingly elected on November 4 to gradually raisethe minimum wage to $15 an hour by July 2018, reported the San Francisco Chronicle.The city’s Proposition J cruised to victory with more than two-thirds support, andmakes San Francisco the second city in the nation after Seattle to raise its minimumwage to $15. A similar ballot measure in Oakland had even wider support and will raiseOakland’s minimum wage from $9 to $12.25 starting in March. Both measures neededonly a simple majority to pass. Residents of a third California city—Eureka—also votedon a on minimum wage hike, but rejected the measure. In San Francisco, the minimum


continued on page 22continued on page 24

LegislativeUpdate


website at

San Franciscois the second

city in the nation, afterSeattle, to

raise its mini-mum wage

to $15.

wage will increase to $12.25 in May 2015, to $13 in July 2016, $14in July 2017, and $15 in July 2018.

FDA Requires Calorie Labels The FDA recently announced that it has finalized a rule re-quiring that calorie information be listed on menus and menuboards in chain restaurants, similar retail food establishments andvending machines with 20 or more locations to provide con-sumers with more nutritional information about the foods theyeat outside of the home. The agency said smallgrocery stores and convenience storesare covered by the rule if they sellrestaurant-type food and are part of achain with 20 or more locations, doingbusiness under the same name, andoffering for sale the same menu items. According to the FDA, coveredfood establishments will be required toclearly and conspicuously display calo-

rie information for standard items on menus and menu boards,next to the name or price of the item. Additionally, the menu la-beling final rule requires covered establishments to provide, uponconsumer request and as noted on menus and menu boards, writ-ten nutrition information about total calories, total fat, caloriesfrom fat, saturated fat, trans fat, cholesterol, sodium, total carbo-hydrates, fiber, sugars and protein. Covered food establishmentshave one year to comply with the menu labeling requirements.

Retail Workers 'Bill of Rights' Passes In San Francisco The San Francisco Board of Supervisors recently passed afirst-of-its-kind law aimed at securing more stable hours for re-tail workers, reported the Huffington Post. Dubbed "the retailworkers bill of rights," the law requires the city's large chain re-tailers to post workers' schedules at least two weeks ahead oftime. Workers will be owed supplemental pay if unexpectedchanges are made to their schedules, or if they're required to be"on call" and their shifts are suddenly canceled. The law also re-quires that the employers offer any extra hours they have to theircurrent workforces, rather than bringing on more part-time ortemporary workers.

The San Francisco bill already has a federal companion ofsorts in Congress: the Schedules that Work Act. The legislationwould require businesses to compensate workers who show upfor their scheduled shift but are turned away, as well as workerswhose schedules are changed without at least 24 hours' notice.Sponsored by House Democrats, the bill has virtually no chanceof passing the GOP-controlled House or the soon-to-be-GOP-controlled Senate, according to the article.

Florida Bill Would Allow Online Lottery Sales A bill recently filed by a state lawmaker would allow Floridato become the eighth state to sell lottery tickets online, reportedthe Sun Sentinel. Currently, players can only purchase tickets withcash at brick-and-mortar outlets. Sen. Gwen Margolis, who spon-sored the measure, told the newspaper the added revenue fromonline lottery would far outweigh any new revenue the statewould get by bringing a resort casino to South Florida. The LasVegas Sands Corp. has lobbied heavily in Tallahassee to bring a

casino to Florida as part of the upcoming gambling com-pact negotiations with the Seminole tribe.The new bill does not specify how the Florida Lottery

would allow players to purchase tickets online. Aside fromsome boilerplate, the one page measure simply says the

Lottery shall "have the authority to create a program that allowsa person who is 18 years of age or older to make an online pur-chase of a Florida lottery ticket. The department may adopt rulesto administer the program."

Sugar Tax Rejected In San Francisco, But Not Berkeley San Francisco voters rejected a tax on soda and other sugarybeverages on November 4, but voters in Berkeley approved theirown version, making it the first city in the country to adopt acontroversial soda tax, reported the San Francisco Chronicle. Thecities’ measures were crafted differently. San Francisco’s Propo-sition E would have levied a 2-cents-per-ounce tax on sodas andother sugar-sweetened drinks—including some juices, coffeesand flavored waters—and would have raised $35 million to $54million in revenue annually for children’s nutrition and physicaleducation programs. Berkeley’s Measure D will levy a 1-cent-per-ounce tax on sodas and sugary drinks, and the money willgo to the city’s general fund. Because the tax revenues weren’tintended for a specific purpose, the measure needed just a sim-ple majority of voters to approve it.



website atcontinued from page 20


The FDA said c-stores are covered by the new menu-labeling lawif they sell restaurant-type food and have 20 or more locations.

5,500 product choices• Reduced the calorie content of more than5,500 product choices• Reduced sodium in more than 6,500 prod-uct choices

Government Issues Plan ToTighten Debit Card Security

Saying more must be done to stop databreaches affecting consumers, PresidentObama recently announced a governmentplan to tighten security for the debit cardsthat transmit federal benefits like Social Se-curity to millions of Americans, reported theAssociated Press. Cards issued by the federalgovernment will now have an internal chipreplacing magnetic strips to reduce the po-tential for fraud. Concern is growing over thesecurity of Americans' financial data, with anestimated 100 million people having been af-fected by breaches in the past year, includingat big retailers like Target and Home Depot.The White House said the idea of the gov-ernment program is to lead by example, tonudge the broader financial industry and re-tailers toward more secure standards.

Swisher International Acquires Drew Estate

Swisher International Inc. and Drew Es-tate Tobacco Company recently announcedthat they have entered into a definitive pur-chase agreement whereby Swisher Interna-tional will acquire Drew Estate in itsentirety. Drew Estate will continue to oper-ate under its current management team asa subsidiary of Swisher. The transaction isexpected to close during the fourth quarterof 2014. Terms of the transaction have notbeen disclosed.

Dunkin' Donuts & StarbucksTo Boost Dinner-Time Sales

Dunkin' Donuts and rival Starbucks planto increase their share of later-in-the-daysales in 2015, with new menu items aimed atthe dinner crowd, reported the Patriot Ledger.Dunkin’ Donuts has already begun to intro-duce a dinner staple—steak—this fall, re-cently making a steak sandwich and a wrap


Shrink—comprised of shoplifting, employee orsupplier fraud and administrative errors—costthe global retail industry more than $128billion last year, $42 billion in the U.S. alone, ac-cording to the latest Global Retail Theft Barometer.• Nestlé is working on a fat-burning additivethey can drop into foods to replicate the effects ofexercising, reported NewsLedge.com. • Banksare gearing up for a big fightwith retailersover who covers the cost of cyber attacks, reportedthe Financial Times. Banks say they are payingmost of the bill for breaches that they blame onretailers’ own security deficiencies, and areasking for legislation that would force retailers topay for the clean-up themselves. • Coffee chainStarbucks is planning to launch a food andbeverage delivery service in select mar-kets during the second half of next year, reportedCNBC. •McDonald's plans to cut the num-ber of items on its U.S. menus and use feweringredients in food in an effort to speed up service,bolster sales and offer consumers personalizedoptions to compete better with Subway andChipotle Mexican Grill, reported Reuters. • Ten-nessee voters recently elected to allowwine sales in grocery stores and conveniencestores in the state, reported The Daily Herald. All 78cities that voted on the referendum approved it,and wine sales in grocery and c-stores can start asearly as July 2016. • Sales of whisky in theU.S. will surpass those of vodka this year forthe first time since 2007 to become the country’sbiggest selling spirit, reported The Drinks Business.• Pabst Blue Ribbon beer wasn’t sold to a Russianbrewer after all, reported Bloomberg Business-week. An investment group that acquiredPabst Brewing Co. didn’t involve Russia-based Oasis Beverages, despite a press release



website at


The National Coalition would like to welcome the United Franchise Owners of North Florida and Palm Beach tothe group. Pictured are, from left sitting: Mohammad Razin (Secretary), Ed DeNorio (President), Ravi Singh(Vice President Central), and David Singh (Vice President North). From left standing: Peter Hess (Vice PresidentSouth), Narendra Gharia (Board Member), Rocky Singh (Board Member), Ed Jurewic (Board Member), AmanPatel (Board Member), Dhaval Patel (Treasurer), and Parag Veera (Board Member).


A year ago, after I had been electedchairman of the National Coalition and be-fore I officially took office, former NCASEFGeneral Counsel Arnold Hauptman, a verywise man, wrote an article for the Novem-ber/December 2013 issue of Avanti inwhich he offered a list of challenges I wouldhave to resolve in my first year. If I could ac-complish the tasks on the list, he said, Iwould have earned a well-deserved restduring my second year. The challenges on the list includedencroachment, the tiered 7-Eleven split,the franchise fee, the DVR dispute, thegasoline commission, the 85 percent re-quirement, excessive LONs, increasingcosts, gross profit and a few others. Look-ing back at my first year as chairman, theNational Coalition tackled all of these is-sues and more—like maintenance—andalthough we have not resolved all of thechallenges on Mr. Hauptman’s list, wecontinue to work on them diligently. Another key issue we continue towork on is improving our communicationand relationship with SEI. The key to atruly balanced partnership is open andhonest dialogue, which also serves to en-hance the franchisee/franchisor relation-ship. Since my first day in office theNational Coalition has continued to reachout to SEI, extending either an olivebranch or an opportunity for them tomeet us for earnest discussion because wetruly believe that improving the businessfor franchisees can only improve businessfor our franchisor. Most recently, SEI has been activelyreaching out to the franchisee community,thanks to the actions of the National

Coalition and severalFOA groups. The re-lationship with ourfranchisor has trans-formed to the point

where SEI upper man-agement is now meet-ing with us at both localand national levels. In fact,the National Coalition Board,over 40 franchisee leaders, met with SEIexecutives in Dallas on November 19,and our lead speaker at that specialmeeting was President and CEO Joe De-Pinto. He explained he had been busytaking care of SEI’s external challengesthe last few years and delegated all theinternal affairs to other SEI officers andmanagers, including franchisee matters.He said he made some changes in upper-

level personnel (four senior people reas-signed or let go) and that he will now bemore hands-on with franchisee affairs.(See Paul Lobana’s article on page 43 for amore complete account of the meeting.) During that meeting we discussed allmanner of issues affecting franchisees, in-cluding low volume stores, the tieredgross profit split, the term of the newagreement, remodels and reimaging,goodwill, gasoline, maintenance costs,and more. Mr. DePinto said that it is anew era, that he is responsible for rebuild-ing the franchisee relationship, and thatthey will work with us to find solutionsbeneficial to both sides. Although this isa good step to mend the broken fence ofour relationship, the National Coalition is

still being excluded from the decision-making process in SEI-created commit-tees, like the NBLC, which consist ofcompany-selected franchisees, and notthe elected leaders of our local FOAs, whocan report back to their members oncommittee progress, and deliver feedbackfrom to the committees from their mem-bers. Our hope is that this will change inthe near future. In the meantime, we are reaching outto SEI to make them more involved withthe National Coalition by inviting themto our meetings and events. Our next Na-tional Coalition Board meeting is Febru-ary 18-19, in Sandestin, Florida. Ourobjective is to continue to work with SEIin growing our business and enhancingour brand. I thank Joe DePinto for attending ourmeeting in November, and I appreciatethe fact that we're talking with our fran-chisor about continuing talks in 2015. AsI am responsible for the day-to-day oper-ation of the National Coalition, I know fora fact that the CEO of the company issomeone that folks would like to see at ourmeetings. It is essential for the bettermentof the system that we develop a workingrelationship and true partnership withSEI, and it looks like we’re beginning tomove in the right direction.

“Thekey to a

truly balancedpartnership is open

and honest dialogue,which also serves to enhance the

franchisee/franchisor relationship.”


JOE GALEACAN BE REACHED AT

831-426-4711 [email protected]

BY JOE GALEA, EXECUTIVE CHAIRMAN, NCASEF

We Are Making Progress


Over the last few years, franchiseeshave had to deal with many changeswithin the 7-Eleven system that have af-fected our bottom lines. Credit card feesand gasoline commission changes are twothat quickly come to mind. But there isone change on the horizon that will se-verely impact our businesses in the com-ing months and years, and that is the waveof minimum wage increases sweepingacross the country. In January and throughout the firsthalf of 2015, many states and cities willbegin to gradually increase their minimumwages over several years until they reachthe set-upon goal. Some of these increaseswere implemented by local politicians act-ing to appease their constituents, whileother minimum wage hikes were put upfor vote and passed by the local populace. So far, Seattle and San Francisco havethe highest increase of any municipality at$15 per hour by 2018. Voters in Alaska,Nebraska, South Dakota and Arkansaselected in November to raise their mini-mum wage rates to $9.75, $9.00, $8.50 and$8.50, respectively. Chicago is going toraise its minimum wage to $13 per hour bymid-2019, and Oakland is going up to$12.25 starting in March. All of this justhappened in the last two months, and thetrend is going to continue because it's apopular thing for legislators to do. No mat-ter the amount of the increase, these higherminimum wages will have a tremendousadverse affect on our businesses.

An example: sup-pose you have a daywith a couple of dou-ble coverage shiftsand one single cov-erage shift. That’s a

40-hour payroll day. If the minimum wagegoes up a dollar—assuming that you’repaying your employees the minimum,which isn’t the case in most instances—you’re looking at $1,200 to $1,500 permonth in increased payroll. That's $14,000

to $18,000 a year per store, and these arevery conservative numbers. Most storeshave higher payroll hours per day, and thisis just strictly including the day you havedouble coverage during the day and singlecoverage at night. I'm not even countingmanagers or the employees you may be

paying above the minimum, who wouldno doubt also expect a raise to keep themabove the minimum wage. For a store with a net income of$50,000 to $60,000, a payroll increase of$14,000 to $18,000 would mean 25-30percent off their bottom line. That’s a bighit, and will force many of us to makesome choices. The easier choice, or maybethe only choice possible, is to reduce laborhours. However, when you start cuttinglabor hours, that's when you start impact-ing your standards, your image, and yourbusiness as a whole. I don't think that's asmart way to go about running a business,but faced with financial difficulties, some-times you have no other choice. The minimum wage issue has beenraised at local FOA meetings, at NationalCoalition Board meetings, and at a recentmeeting with SEI higher ups in Dallas, in-cluding Joe DePinto. Our CEO said he un-derstands this is a huge issue and heunderstands how this is impacting the sys-tem, and is committed to putting some re-sources behind developing a solution. I'mhoping SEI will be open-minded to helpstores stay functional and continue to dobusiness, especially the lower-volumestores. There is going to be a pinch, andour franchisor will not be immune becauseof its corporate stores and because it mightvery well have to reverse some of its policychanges so franchisees can stay afloat—likethe credit card fee. We can only increase

“Seattle and San Francisco have the highest minimum wage increaseof any municipality at $15 per hour by 2018. This trend is going tocontinue because it is a popular thing for legislators to do.”

Minimum Wage Increases Will Impact Our Businesses


BY JIVTESH GILL, EXECUTIVE VICE CHAIRMAN, NCASEF

“For a store with a netincome of $50,000 to

$60,000, a payroll increaseof $14,000 to $18,000

would mean 25-30 percentoff their bottom line.”

JIVTESH GILL CAN BE REACHED AT


our prices so much to compensate for thehigher minimum wages, so a creative so-lution is definitely needed. The only goodnews is that the minimum wage increasesare also affecting our competitors, sothey’re in the same boat as we are. I would love to pay my employees$18-$20 per hour, but the reality is I can’tafford to do so. Unfortunately, this is anindustry that consists primarily of a min-imum wage workforce. To those fran-chisees in areas where the minimumwage has already been raised, I recom-mend you talk to, and team up with, yourlocal FOA. Together you should begin adialogue with your local SEI manage-ment to work on a solution while the Na-tional Coalition and SEI executives inDallas do the same on the national level.

The minimum wage increase trendis a serious issue. I can't downplay theimpact. Many other issues we deal withhave some gray area, but this is clearlyblack and white.

“Franchisees in areas where theminimum wage has alreadybeen raised should team up

with their local FOA to begin adialogue with local managementto work on a solution, while the

National Coalition and SEIexecutives in Dallas do thesame on a national level.”

Excessive Minimum Wage Increases in September sayingOasis was part of thetransaction. • Target plans to build five moreof its 20,000 square-foot TargetExpressstores next year—four in California, one in St.Paul, Minn.—expanding a format launched inJuly in its hometown of Minneapolis, reportedFortune Magazine. • C-store chain Wawa contin-ues its expansion into Florida, with plans toopen three locations in the southwest part ofthe state by Spring 2015—two in Fort Myers andone in Cape Coral, reported NBC-2.com. The com-pany hopes to open 12 new stores in SouthwestFlorida by the end of 2015. • While the totalfood and beverage market grew at 1.4percent to reach $530 billion in 2013, totalU.S. retail sales of the private label food and bever-age market increased 2 percent to $102 billion inthe last year, according to a new survey by Pack-aged Facts. • India has released new graphic





My dear grandmother would oftensay that children should be seen andnot heard. Her generation believed thatnothing valuable could be learned fromwhat children thought or would say totheir parents or other adults. Fortu-nately, at least in the child-rearingarena, this theory has been completelydebunked. We now know that our chil-dren thrive when we communicate withthem, and they with us, starting whenthey are just infants. Unfortunately, many franchisorspractice this antiquated theory in deal-ing with their franchisees. They some-times act like the parents of a bygone eraand treat their franchisees like childrenwho do not know anything, have no rel-evant experiences, and whose thoughtsand opinions are of little value. Theytreat franchisees as if they have complete

dominion and control over them—andthat is what is somehow required inorder for the system to be successful. So it is with SEI on many occasionsin the past. The company has changedpolicies and procedures, rolled out newinitiatives and changed required operat-ing procedures without meaningfulinput from franchisees. This includes theDVR System, the GEA Form, BT, Scan

Audits, unan-nounced changes inthe treatment of Op-erating Expenses,Low Volume Stores,

FIW packages, the transfer of the fran-chisor’s maintenance responsibility andcosts to the franchisee through the FMcontract, and many other items. Each ofthese initiatives was rolled out withoutmeaningful input, communication orcollaboration with the franchisee com-munity. This method of implement-ing system change actually is

contrary to the best interests ofSEI, its parent company, its fran-chisees, and the system as a whole. Itis truly counterproductive. In 1996, a franchisee of the Sizzlerrestaurant chain brought suit against thefranchisor complaining about a decisionthe company made to change the mar-keting emphasis from the buffet court tothe grill concept. The franchisee be-lieved that this was a bad idea, that itwould lead to losses of sales and profitand filed suit in an effort to stop thechange. One of the bases of the lawsuitwas that the actions of the franchisor vi-

olated the implied covenant of goodfaith and fair dealing. The court went to some effort topoint out that this decision had indeedbeen made with extensive consultationwith the franchisee community. In fact,

before the decision wasmade, the franchisorbrought the matterto the NationalSizzler Fran-chisee Associa-tion. The mar-keting commit-tee of the Asso-ciation studied

the question andthe evidence support-

ing the reasoning behind theproposed change and came to the con-clusion that the franchisor was correct. Itprovided three separate and very specificreasons why it supported the change. The point of relating to this case isnot that the franchisee lost the case, butwhy the franchisee lost. The court deter-mined that the franchisor could not pos-sibly be acting in bad faith, because it notonly had a good and sufficient reason for

ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

“Participatory, collaborative and cooperative managementleads to the highest likelihood of success in meeting internaland external challenges to the business.”

ERIC H. KARP CAN BE REACHED AT


Franchisees Should Be Seen And Heard


“SEI has recently stated its intent to reset the rela-tionship with its franchisee community in general, and with the National Coalition in particular.”

the system change, but also because ittook the extra step of asking its independ-ent franchisee association to endorse theconcept before it was implemented. My friend and colleague, AndrewSelden (now retired from the practiceof law) wrote an article on this very sub-ject in the ABA Franchise Law Journalin 2000. Citing extensive research on ef-ficient and productive organizations ingeneral, he stated that change in a fran-chise system must stem from active col-laboration between a franchisor and itsfranchisees, not from the franchisor’sunilateral actions. He cited widespreadevidence that participatory, collabora-tive and cooperative management leadsto the highest likelihood of success inmeeting internal and external chal-lenges to the business. This means that when considering asystem change, an enlightened fran-chisor will bring experienced andknowledgeable franchisees—chosen bytheir peers—into the process at the out-set, not when the process is completeand the mandate is announced. Themore involved the franchisees are in theprocess of researching the issue and the

details of the initiative at every stage ofits development, the greater acceptancefrom the wider franchisee communitywhen the process is complete. SEI has recently stated its intent toreset the relationship with its franchiseecommunity in general, and with theNational Coalition in particular. How-ever, as my grandmother also said onmany occasions, “The proof is in thepudding.” We hope this reset will in-clude SEI coming to and acting on the

understanding that there is a great dealof wisdom and operational experiencewithin the franchisee community. Wehave large numbers of franchisees whohave been owners much longer thanmany SEI managers have been on thescene. They have a great deal to con-tribute to making the system morecompetitive and more successful. True collaboration and joint plan-ning of system initiatives and changeswill ensure greater franchisee buy-in,reduced suspicions of bad faith motives,and less resistance. Communication

without con-crete changesin the way thef r a n c h i s o rtreats the fran-chisees will

not create sustained benefits to anystakeholders in the system. If SEI real-izes that its path to greater success istaking advantage of the vast expertiseand experience of its franchisee com-munity, there will be fewer conflicts,lawsuits and angry posts on Unhap-pyFranchisee.com, and happier fran-chisees, increased store development,elevated goodwill sales, as well as en-hanced revenue, profits and value cre-ation for all.



Franchisees Should Be Seen And Heardhealth warnings thatcover 80 percent oftobacco packages on both sides and hasbanned the sale, manufacture and use ofe-cigarettes, reported the Hindustan Times. •Taco Bell recently became the first quick serv-ice restaurant to launch a mobile orderingand payment app for both drive-thru and din-ing room orders. The free Taco Bell mobile orderingapp for iOS and Android also allows customizationof menu options. • Home improvement chainLowe’s plans to open two small-formatstores in Manhattan, NY in late 2015, re-ported Retailing Today. The stores will be about30,000 square feet and offer products and servicesthat are locally relevant to customers. • During theNovember 4 mid-term elections, voters optedto legalize marijuana for recreational usein Alaska, Oregon, and Washington, D.C.,reported ABC News. • More than 80 percent ofshoppers visit three or more channels to carry outtheir consumer packaged goods shopping jour-ney, according to an IRI study. • Toys ‘R’ Us re-cently announced that in 2014 it openedapproximately 90 stores throughout 21 ofthe 37 countries and jurisdictions in which itcurrently operates. • Sweden-based furniture re-tailer IKEA plans to raise minimum hourlywages an average of 17 percent to $10.76 forabout half of its 11,000 U.S. store employees, tiedto the cost of living in each market, reported theAssociated Press. • C-store chain CumberlandFarms announced that it is accepting mo-bile payments via Apple Pay at all of its nearly600 retail locations across the Northeast andFlorida. • Sam’s Club said it is opening a privatehealth insurance exchange for its members, amove that is aimed at providing the small-busi-ness owners that are its core customers with away to offer affordable insurance coverage to theiremployees, reported the Washington Post. • Newmobile apps give grocery shoppers cashback when they buy specific items at participat-ing retailers like Stop & Shop, Target and Wal-Mart, reported the Associated Press. Apps such asCheckout 51, Ibotta, SavingStar and Snap requireusers to scan their receipts as proof of purchase. •



“ Communication without concrete changes in the waythe franchisor treats the franchisees will not createsustained benefits to any stakeholders in the system.”

“There is a great deal ofwisdom and operationalexperience within the 7-Eleven franchisee community. The path togreater success is involv-ing franchisee leadersand taking advantage ofthe vast expertise.”


Vice Chairs’Forum

“Progress is impossible without change, andthose who cannot change their minds cannotchange anything.”

—George Bernard Shaw

Recently, the franchisee communitybecame aware of certain changes takingplace in the top leadership positions at SEIcorporate headquarters in Dallas. I am nota pessimist (perhaps a cynic at heart) buton this topic I am cautiously optimistic. AsI have written in the past, for change to takeplace, “first I must change.” Managementtop to bottom must buy into change in im-plementation and practice. I understandthat 7-Eleven is a big company, and imple-menting change takes time, but I have alsobeen with 7-Eleven for more than 20years, and I understand the legacy inthis company in which not everyonemay be embracing this “Dawn Of ANew Era.” Some folks want to keep thingsas they are, and fear change, just as theydidn't accept "Servant Leadership." Philosopher Aristotle wrote that mosthumans are afraid of change—becausethey fear change brings chaos—but thatchange is a must. I agree. The night is al-ways darkest before dawn. We have all ex-perienced the changes in this company thatbrought chaos to the franchise community.Project "E" is the first example that comesto mind, followed by an unleashing of aself-centered, monomaniacal, egomaniacmanagement team that ran the companyand franchisees without oversight. Of

course there waschaos, but cleanup ef-forts are underway!

I have alwaysfavored the “servantleadership” manage-

ment model. I believe all successful 7-Eleven franchisees practice some version ofit. We honestly take great care of our hard-

working, loyal and devoted staffwho daily take greatcare of the thou-

sands of customers who enter our stores. Tous Servant Leadership is a way of life, butfor some in our franchisor’s managementranks, we believe it seemed like a slogan. A new day seems to be dawning, butit is not a complete about face. To date it ismore like a course correction. At the lastseveral meetings with our CEO and histeam, the question of increasing fran-chisees’ bottom lines was one of the main

concerns. The most critical impact onfranchise financials is the minimum wageincrease blowing across the country. Oursystem cannot absorb this easily. We do nothave time for CSAs, committee meetings,studies, hand wringing or speeches. Rosypredictions will not save some of our col-leagues who are operating mid- to low-vol-ume stores. They will be swept away like aSouthern California mudslide. The timeis now to act and not wait for lobbyingefforts. Nothing is going to stop the min-

imum wage storm. On a different note, here is my humblerequest: the new thinking in Dallas shouldbe that any tattletale side conversationswith the Quisling’s and Toadies in thefranchisee community need to stop. Thesnitches who call into SEI HQ with their“reports” from National Coalition andlocal FOA meetings are only serving theirown agendas for rewards other franchiseeswork hard to get. Frequently, their infor-mation is distorted, dishonest and justplain wrong. Senior, local and all levels of manage-ment at SEI must ask themselves: A) Who inthe franchisee ranks is driven in pursuit ofconstant improvement of the franchise sys-tem for ALL stakeholders, and B) Who inthe franchise ranks only seeks self-aggran-dizement and self-gain? Leadership de-mands that at times unpleasant opinionsneed expression. Anyone that makes the B

DAWN OF A NEW ERA—OR IS IT?BY JAS DHILLONVICE CHAIRMAN, NCASEF

JAS DHILLONCAN BE REACHED AT

818-571-1711 or

[email protected]

“I have always favored the ‘servant leadership’management model. I believe all successful 7-Eleven franchisees practice some version of it.”


“Leadership demandsthat at times unpleas-ant opinions need expression. That is howdynamic organizationsgrow and thrive.”

Vice Chairs’Forum continued from page 37

list ought never to be consulted on anything.That is how dynamic organizations growand thrive. Seeking to hear only the mushymusic of the misinformed keeps an organi-zation captive to unrealistic fantasies. Insteadof listening to those devious and dangerousminds who seek only division and personalgain, let us continue to have passionate,meaningful, transparent and healthy conver-sation with the National Coalition. While this resetting of relations is stillnew, we need to get aggressive and moveforward at a much faster pace. The fran-chise community wants to see solidchanges, not quick fixes and/or cheap talk.Here’s one for you: roll back to the 15-yearagreement without any renewal fees andno operational review. I do not see anynegative financial impact to SEI's bottomline from this move. Stable, prosperous andforward-looking franchisees in the longrun contribute to a stable, prosperous fran-chisor. After all, I keep hearing the com-pany has had a stellar year in 2014, so why

not share some of that stellar wealth withthose who created it? Let us have a real in-crease in franchise net income from salesand gross profit, and not from Enron-stylecreative accounting gimmicks like reject-ing legitimate expenses from the stores. In closing I have to talk about SEI’sNational Business Leadership Council(NBLC). How many of our fellow fran-chisees are better off today than last year,the year before, or the one before that?Why is it that an overwhelming majorityof the current members of the NBLC werechosen to serve again? (Nothing againstthese fine friends of the franchisees.) Hasthe work of the NBLC added money tofranchisees’ bottom line? Keep in mindthat SEI has had stellar years. Did most ofour colleagues on the NBLC fall asleepwhile expenses were being shifted to fran-chisees? Did anyone ask about encroach-ment and how SEI was growing theirbottom line? The National Coalition’schairman has never received an invitation

to attend an NBLC conference call, letalone attend a meeting! Did anyone askwhy the current chairman wasn’t invited?Why not? Was it fear, self-interest and/orjust being naive? You’re bestowed a title ofa leader, are you one? We hope to see morefranchisee leaders on the NBLC soon, toencourage the “Dawn of a New Era." Thanks to everyone who wrote meafter my last article. I received many emails,texts and voicemails with lots complimentsand a few critiques. I thank you all for theinteraction. My best to you and your lovedones for 2015. I hope that we are all part ofthe solution, not the problem!

“Now I encourage you toask yourself, will it bebusiness as usual or isthis really a “Dawn of aNew Era?"


Vice Chairs’Forum

Franchisees dread the “Ivory Tower”syndrome that seems to permeate 7-Eleven, Inc. (SEI). The latest exampleshowing how removed corporate is fromour store-level reality was the Thanks-giving Holiday McLane ordering anddelivery schedule. SEI made the unilat-eral decision to have its franchise storesreceive a single McLane deliveryThanksgiving week. This was commu-nicated via email on 7Hub. It also in-formed franchisees that all categorieswere orderable every order cyclethrough the New Year. What was not communicated wasthat a few select stores would receive two

deliveries the week of Thanksgiving, butthe second delivery would be delayed 24hours. So franchisees had their orderwriters make theirnormally sched-uled orders, notknowing that thesecond cycle orderwindows wouldnever open. As a result, orderwriters were left standingaround while franchisees and

their store managers made frantic phonecalls to field consultants and the HelpDesk to find out why the order cate-gories never populated. TheTransmit/Delivery schedule in the ISPwas printed and double-checked, but itshowed the normal McLane order win-dow and transmit time, as well as thenormal second McLane delivery day. Fi-nally, word came from the field consult-ant that the decision was made in Dallasto have McLane deliver the identicalorder from the second order the previ-ous week! There is not any business in any sec-tor that orders the identical product as-sortment two weeks in a row! Manyitems are only ordered once a month or

less frequently, and when items are over-ordered or under-ordered it’s due toforecasting mistakes. In our case, theorder delivered the prior week included

many Thanksgiving items notneeded to be delivered again, and

will result in excessiveout of date productsin the foreseeable fu-

ture.Additionally, because

there was no order written,the McLane order could not

be checked in using the vaunted normalBusiness Transformation process. In-stead, every single item had to bescanned and the perpetual inventoryhad to be corrected using the Balance onHand adjustment process—a thanklesstask adding many hours for the freightpersonnel to put away the order, costingevery franchisee hundreds of dollars. Butdon’t worry; SEI does not share in fran-chisee payroll expenses. An arbitrary decision to duplicate aprevious order is extremely shortsighted.One has to wonder what real world in-store experience was gleaned to come tothe conclusion that this could ever be agood idea. But don’t worry; it didn’t costSEI a dime!

A DISCONNECT WITH STORE-LEVEL REALITY?BY ROGER ST. GEORGEVICE CHAIRMAN, NCASEF

“The latest example showing how removed corporate isfrom our store-level reality was the Thanksgiving HolidayMcLane ordering and delivery schedule when the decisionwas made in Dallas to have McLane deliver the identicalorder from the second order the previous week!”

MasterCard Canadaannounced it will re-duce interchange

rates to 1.5 percent for consumer credit cardsacross its categories after consultation and discus-sion with key merchant and consumer groups. •Procter & Gamble is splitting off the Duracellbattery business in order to boost its shareprice and to reduce the number of shares out-standing, reported CNNMoney. • Alcohol deliv-ery service Drizly announced that it isexpanding into Indianapolis, making it the8th major metropolitan market it now serves,along with Austin, Boston, Chicago, Denver, LosAngeles, New York and Washington D.C. • Sny-der's-Lance, Inc. recently announced thecreation of a new, "better for you" divisionas well as an increase in its investment in Late JulySnacks—a leader in organic and non-GMOsnacks. • Wal-Mart Stores Inc. has opened 17




On November 19, the National Coalition Board—consistingof FOA leaders from across the country—met with SEI uppermanagement in Dallas to discuss the many issues and concernsaffecting franchisees nationwide. Here’s a recap of that meeting.

Among the SEI executives in attendance was Joe DePinto,who kicked off the meeting by expressing that, in his opinion, iffranchisees are not healthy, 7-Eleven as a corporation cannot behealthy. He also emphasized the need for better communication,better relationships, and collectively working with the fran-chisees. Although Mr. DePinto acknowledged there are disagree-ments between franchisees and SEI, he said it is imperative thatfranchisees not “defame” the brand name because that will harmeveryone involved.

In his address to the National CoalitionBoard, Mr. DePinto pointed outthat SEI faces numerous externaland internal challenges. He saidthe external challenges of latehave consumed a great deal of histime and resources, which hasbeen reflected in the franchiseecommunity’s frustration with his ap-parent inattentiveness to our issues. He went on to ex-plain that some of these external challenges include seriouscompetition from other brands’ aggressive growth. This wouldinclude Walmart seeking to expand its smaller c-store type for-mat, McDonald’s aggressively expanding its coffee business,Dunkin’ Donuts expanding to more states, and Starbucks startinghome/office coffee delivery.

Mr. DePinto also stated that the so called “wage rage”—thepressure in many states to increase the minimum wage—will havea negative impact on the ability of SEI and the franchisees to re-main profitable while still being competitive. Mr. DePintostressed that these external challenges, although time consuming,

would not prevent him from also addressing the internal chal-lenges facing SEI.

One of these internal challenges is the number of lawsuits filedby franchisees against SEI. Mr. DePinto pointed out that, althoughit is perfectly legitimate to disagree on various issues, franchiseesin their frustration should not disparage the 7-Eleven name in theprocess. Doing so hurts our brand image, he said, which hurtsother franchisees and even themselves in the long run.

He also touched on former SEI Corporate Investigations Su-pervisor Kurt McCord’s testimony about Asset Protection beinga predatory department, saying that he is not a creditable witness.Mr. DePinto stated stores are taken away from a franchisee if it isestablished that some kind of fraud has taken place in the store—there is no racial discrimination of any kind involved.

Mr. DePinto recognized that these issues were discussedin the NBLC meeting, CEO Round Table Commit-tee, and at some local FOA and National CoalitionBoard meetings. He mentioned that the NBLC

was a good vehicle to have these issues resolved.

The following is a non-inclusive list of the most common issues brought up during the meeting:

1. Lower volume stores need a better profit split to remainviable, particularly with upward pressure on the minimum wage.

2. The practice of a progressive split based on store profittiers should be changed to a fixed 50-50 split. Otherwise, there islittle incentive for the franchisee to invest and risk everything togrow his/her business. Presently, when a franchise reaches themaximum at one tier a slight increase in store profit can actuallyresult in a decrease in income, similar to stepped tax bracketscausing a slight increase in income at the top of one tax bracket,to result in actually less take-home pay.

3. The agreement term should be changed from the current

Our Meeting With SEI Upper Management

Franchisee Guest Column

by Paul LobanaVice President,

Southern California FOA



Jaspreet Dhillon, Board Member, FOA of Greater Los Angeles, President, California 7-Eleven Franchisee PAC

Although we as 7-Eleven franchisees entered the fray a bitlate to get the fair franchising bill SB 610 passed, had we notcampaigned for the measure it would not have cleared the As-sembly floor and made it to Governor Jerry Brown’s desk. SB 610 sought to alter the relationship between franchisorsand franchisees by reducing franchisors’ authority to rigidly dic-tate the terms under which storeowners operate. Among otherprovisions, SB 610 would have raised the standard for refusing

to renew a contract from“good cause” to “substantialand material breach of thefranchise agreement.”During the last few months

before the governor’s veto, asmall army of 7-Eleven fran-chisees went to Sacramento

multiple times to talk to Assembly members and state senatorsabout SB 610 and convince them to support it. Although Gover-nor Brown shot it down, that does not mean the fight is over. Thegovernor objected to the “substantial and material breech”part of the language. His argument was that would open aflood of litigation. What I would like to share is that we hada debriefing conference in October with all of the differentfranchisee organizations and associations involved with themovement to get SB 610 passed, and there were five com-mon points everyone agreed on:

1. We shouldn't stop.We need to bring fair franchisinglegislation back during the next session after the election.

2. We need to speak to the governor first and makesure he doesn't pull a fast one saying, “I don't agree with the lan-guage.” Some people were willing to drop the “substantial” fromthe language, but I feel if we do that the bill won't have any teeth.

3. We need to hire a think tank so we can come upwith a better argument to convince the Assembly members andthe senators.

4. We need more franchise systems involved ingetting this legislation passed, not just 7-Eleven storeowners.We were so successful in campaigning for SB 610 that theyidentified it as a 7-Eleven bill. The bill was for all franchisees,not just 7-Eleven franchisees.

5. We need to hire lobbyists. Some people wereblaming the author of the bill, Senator Hannah-Beth Jackson,for the measure’s failure because she is considered to be radicalon the left. But the truth is the franchisee groups were shoppingaround for senators and Assembly members to author the bill,but they couldn't find anyone. Senator Jackson was the onlyone who stepped forward. The good news is that I've been talk-ing to a lot of senators and Assembly members and we haveabout half a dozen who are willing to author and support thebill during the next legislative session. So even though the billfailed to become law, we have managed to create awareness that

there is a problem with the franchise law,not just in California, but throughout thecountry.

I think this is a big win for us. Wewere able to carry SB 610 with the helpof the Democrats and we were less than

2/3 of the majority. That's why the governor was able to vetoit. The 7-Eleven Franchisee PAC has been working with theRepublican caucus. If we can get the Republicans to join handsand get this bill to pass during the next session with a 2/3 ma-jority, then there is nothing the governor could do about it—it would be veto proof. That is what we are working on.

It seems these days everything is an uphill battle for us—it feels like we’re getting hit from all sides. I encourage everyoneto get involved in legislative issues that affect our businesses sowe can thrive as small business owners. n

“SB 610 would have raised thestandard for refusing to renew acontract from ‘good cause’ to

‘substantial and material breachof the franchise agreement.’”



LegislativeUpdate

Fighting For Franchisee Rights In The Legis lature

“Even though the bill failed to become law, we have managed to create awareness that there is a problem with the franchise

law, not just in California, but throughout the country.”

10-year term to a 15-year term, and without the currentrenewal fee when a term expires. 4. There is a strong need for remodeling existingstores in the common interest of “re-imaging,” especiallyin light of the aforementioned strong competition fromother brands. 5. Due to the franchise fees going up considerably andthe reduction in the agreement terms combined with theterm renewal fees, there is a problem with deterioratinggoodwill. A strategy needs to be developed to keep theremaining goodwill intact. In many cases, the value of afranchisee’s store is the only retirement money availableto them, and the value of the business is tied to thisgoodwill. 6. For those stores selling gasoline, the 1.5-cent pergallon commission is considered very low and provideslittle incentive to invest in the necessary facilities to en-gage in this business. 7. The relationship between franchisees and SEI couldbenefit greatly from better communication. Morale is

very low at thispoint, and needsto be improved for thebenefit of all.

8. Maintenance costs are out of controland need to be checked, as it is yet another issue hurtingthe bottom line of many stores, particularly the low vol-ume stores. This could be helped by the remodeling andexpanding issues noted above, and would help moraleand goodwill, as mentioned.

There were many other issues discussed, but thesewere the most common issues brought up by the Na-tional Coalition Board and clearly brought to the atten-tion of Mr. DePinto. It is our hope that the above itemswill be taken seriously and addressed in good faith, asthey have a huge impact on franchisees’ bottom linesand therefore their ability to remain viable as a businessand source of income. Since all agreements after 2004,the shift has been unfairly in favor of SEI and we wouldlike the opportunity to provide input on the 2019 agree-ment so we could bring balance to both sides. n


Our Meeting With SEI Upper Managementcontinued from page 43


As today’s shoppers seek out fresher,better options throughout the conven-ience store, it is time to freshen up thepackaged bakery aisle. Don’t worry, biggrowth drivers such as doughnuts andsnack cakes are not going any-where, but there is an un-tapped opportunity to boostsales even more with pre-mium quality “bakerystyle” options. With breakfast, in par-ticular, it is important to noteconsumers’ preferences areevolving along with their busylifestyles. These on-the-go consumers arelooking for sweet items at breakfast that notonly satisfy their hunger, but also satisfytheir need for convenience with items thatare portable and easy-to-eat. As retailers fol-low consumer trends, it presents a great op-portunity for convenience stores interestedin enhancing their bakery offerings.

A Category Ripe ForInnovation The packaged bakery category is largeand growing, yet hasn’t seen a lot of inno-vation or excitement in recent years.Dominated by only a few big players andflooded by many duplicate products, thecategory’s biggest news in the past decadewas Hostess’ exit and re-entry. Further,while consumers may think the currentproducts are fine, the category is plaguedby a reputation for items considered “junkfood” or “products that look like they havebeen around for months.” Consumers today want more fromtheir convenience stores, with 65 percentreporting they would like fresher food atlocal c-stores1 as opposed to items that

sometimes appear to have been on theshelf for months. Further, as consumer di-versity grows and more women and mil-lennials visit c-stores on a weekly basis,retailers need to adapt to their desire for

fresher, better-for-you options. These changing attitudes

need to be addressed through-out the store, including thepackaged bakery aisle, whereexisting products leave oppor-tunity for higher quality,fresher options.

Satisfy Consumer Cravings For Sweet Breakfast Solutions Overall, the packaged bakery categoryis showing strong growth, up almost 10percent versus last year. Interestingly,breakfast items represent 64 percent of thenearly $2 billion packaged bakery cate-gory, and this segment is also showingstrong growth—up five percent versus last

year (snacks make up the remainder ofthe category).2 Whether it is doughnuts,pastries, danishes or muffins, consumersare most likely to look for a packaged bak-ery item at breakfast to fill them up andsatisfy their sweet craving. Another key decision factor consumersare looking for at breakfast is convenience.Retailers need to cater to this on-the-gocrowd and ensure that they are offering

packaged bakery items that not only de-liver on taste, but are portable—coming insmall portions that are easy to eat in thecar, at a desk, in a line, or anywhere elsealong the way. To meet this need, General Mills Con-venience is rolling out Pillsbury Minis—aline of four varieties of premium bakeryitems designed for breakfast on-the-go witha mini size and less mess. For more informa-tion, see Sweetness On The Go on page 00.

Enhancing In-store Success with PackagedBakery C-stores looking to bolster the successof breakfast and packaged bakery optionscan take advantage of new options andstrategies for marketing while making a

concerted effort to focus on growing thisestablished category. Strategic placement, for instance, can at-tract consumers’ attention. Retailers needto ensure they have the right products rep-resented in their in-line packaged bakeryset and organize their set by day-part,brand, and product type. Consumersspend the majority of their time shopping

Fresh Opportunity In The Packaged Bakery Set

“ Shoppers seeking out fresher, better

options throughout the convenience store

are an untapped opportunity to boost sales

with premium quality ‘bakery style’ options.”

Vendor Guest ColumnGENERAL MILLS

Snack

36%Breakfast

64%

By Kelly Fulford Senior Category Development Manager General Mills Convenience & Foodservice



in-line, and this location also has the high-est level of shopper conversion. C-storesshould also leverage secondary placementopportunities in high-traffic morningareas, such as the coffee bar or at the reg-ister, to highlight new or special packagedbakery items and capture that impulse sale. Likewise, special promotions can alsodraw attention to the packaged bakeryarea and incite new purchases. Socialmedia continues to present inexpensive

opportunities for marketing products andpromotions, allowing c-stores to encour-age their Facebook, Twitter, and otherfans and users to stop by to start theirmorning out right. Stores can highlightindividual products, special deals, holidaytie-ins and other programs to garnermore interest. And, of course, stocking the rightproduct mix can satisfy customers whoare seeking the perfect solution to theircurrent craving. When c-stores meet theircustomers’ needs throughout the day,offer a distinct benefit, and elicit ongoingconsumer trust, the opportunities forsales and growth will naturally follow.n

(1) Meeting Millennial Expectations in C-Stores(2) IRI AllScan C-Store data for latest 52 weeks endingSept. 7, 2014

Source: IRI AllScan C-Store data for latest 52 weeks

ending Sept.7, 2014

“In the packaged bakery aisle, existing products leave

opportunity for higher quality, fresher options.” Walmart Care Clinicsin its retail stores in ruralTexas, South Carolina and Georgia, just eightmonths after it entered the business of providingprimary health care, reported the Wall Street Jour-nal. The company said it plans to expand the clinicsnationwide. • While online and nontraditional gro-cery shopping continue to grow, new Technomicresearch shows that shoppers rate tradi-tional "brick-and-mortar" retailers signifi-cantly higher on a large number of keyattributes, like quality of perishables, conven-ience, and shopping experience. • Although nearlyhalf of surveyed consumers said they were victimsof a data breach, 45 percent said they have notchanged their behavior when using creditand debit cards, and 69 percent admit to usingthe same password for more than one device orwebsite, according to a new study by RSA. • Aus-tralia-based food retailer 100% Genuine is test-ing new facial recognition paymenttechnology at its stores in China. The com-pany's facepay system reportedly stores a memoryof each customers' face and hands and scans themeach time at the register for payment. • There areopportunities to grow the E85 market, butonly if prices remain significantly below those ofregular grade gasoline and the automobile indus-try continues to produce flex-fuel vehicles at his-toric rates, according to a new report by the FuelsInstitute. • A coalition of national and state retailand merchant associations recently sent a letter tocongressional leaders calling for a single na-tional standard for notifying consumerswhen a business suffers a security breachinvolving financial data or other sensitive personalinformation. • The private equity owners of Host-ess Brands—Apollo Global Management and C.Dean Metropoulos—are planning to put themaker of Twinkies and Ding Dongs up forsale in early 2015 after receiving inquiries frompotential buyers about selling the cake business,reported Reuters. • Nationwide, the percentageof workers who commute by car declinedfrom 88 percent in 2000 to 86 percent in2010-2013, according to a new report by the Pew



“Pillsbury Minis, a line of

four varieties of premium

fresh packaged bakery

items, offers breakfast

on-the-go with a mini-

size and less mess.”

Vendor Guest ColumnGENERAL MILLS


The 7-Eleven FOAC held its annual holiday party andtrade show on November 7, and it turned out to be quitespecial because among our guests were many SEI execu-tive officers—including President and CEO Joe De-Pinto—who gladly accepted ourinvitations. We took this unique oppor-tunity to also schedule a meeting be-tween the Dallas dignitaries and ourFOA Board to discuss franchisee issues. Along with Joe DePinto were VicePresident Franchise System GregFranks, Vice President Field OperationsDan Soper, Vice President and Assistant General Coun-sel Art Rubinett, Senior Director of Government AffairsKeith Jones, and Heartland Zone Leader Mike Scales.Many National Coalition officers also attended, specif-ically Executive Vice Chair Jivtesh Gill, Vice Chair JasDhillon, Treasurer Maninder Walia, and Vice Chair-elects Serge Haitayan and Hashim Syed. When we received word that Mr. DePinto was going

to attend, we asked if he would like to sit down with ourFOA Board and he readily accepted. A day before themeeting I sent out an email with all of the issues wewould talk about, and our entire Board was present.

For the first hour Mr. DePinto spoke. He explained thatfor the last couple of years he focused his attention on 7-Eleven’s external challenges, like growing the systemthrough acquisitions and competition from Walmart Ex-press, Uber delivering convenience products, and Dunkin’Donuts getting into our business. He also spoke about allthe lawsuits filed by franchisees lately, and mentioned KurtMcCord and said how untruthful that whole story is. Then he said he takes full responsibility for what's

happened over the past three years,for SEI’s soured relationship withfranchisees, and explained that atthe time he did what a CEO woulddo—he delegated all franchisee-re-lated matters while he concen-trated on the external challenges.Mr. DePinto admitted thisstrategy didn’t work out,and now he's back in com-mand to set everything right.

I then took the floor, andthanked Mr. DePinto and the otherSEI executives for taking the time to

Our Chicagoland MeetingWith SEI Executives

Issues Discussed With CEO Joe DePinto In Chicago, November 7, 20141. Minimum Wage: The gross profit split must be reevaluated based on annual storesales in light of the minimum wage factor. The current gross profit split formula is to-tally unfair for low volume stores and it requires an immediate fix without any con-ditions by SEI.

2. Gasoline Commission: There must be a new reasonably fair gasoline commissionas the current structure is totally unfair. The current contract does not consider thatinflation and minimum wages are increasing.

3. Reduce Credit Card Fees to boost franchisee income across the country. Recon-sider the structure and use of the Advertising Fee to benefit franchisees.

4. Goodwill: No good is left in the goodwill value of the stores for franchisees be-cause of the new increased franchisee fee. Franchisees have almost nothing to fallback once they decide to retire even after being in the system for a long time (evenafter 25 years). Franchisees were promised a safe financial future for old age if theybuilt their business, so what happened to that promise?

5. Contract: Franchisees need a 15-year contract with no renewal fee and the free-dom to buy from whomever we can to get the lowest cost of goods, since SEI hasfailed to deliver on that promise.

“Mr. DePinto said he takes full responsibility for what's

happened over the past three years, for SEI’s soured

relationship with franchisees, and explained that he's

back in command to set everything right.”




By Ken Patel

President, FOA Chicagoland

come out to Chicago to attend our event andlisten to our issues and concerns. It’s beenmany years since this has happened, and forthe last three years Chicago franchisees havefelt like the orphaned kids of 7-Eleven be-cause we haven’t had a relationship with SEImanagement. I then stated that for the last six years,franchisees have lost a lot of income as aresult of all the new policies and the newcontract that have been put into place.The top three policies that have negativelyimpacted franchisees the most are the ad-vertising fees, the credit card fees and thegasoline commission, which has beenstuck at 1.5 cents since 2009. The newcontract, which has a term of 10 years, hasa 20 percent renewal fee. Previously, thecontract had a 15 percent renewal fee witha 15-year term. We then went on to discuss the biggestissues we are facing now: low volumestores, the minimum wage increase andcost of goods. The one thing Mr. DePintosaid in response was that low volumestores is something he is working on withhis team. He said they are working hardto help out low volume stores, and that wewill see something very soon on that. He also said we have to look at every-

thing holistically. He said, “We hear you,but we can't fix everything right away.”When I was in Dallas recently, I asked Mr.DePinto if he had a timeline for when wewill see some positive changes. Again, hejust said we have to look at this holisti-cally. I don't know what that means. Is hebeing optimistic? Cautiously optimistic? Idon’t know. For the last five or six years our rela-tionship with SEI has been one sided, andfairness is overdue. It's about time that 7-Eleven looks at franchisees as partnersand treats us accordingly. We’re happythat Mr. DePinto is out and about talkingto the franchisee community, which has-n't happened in a long while. We’re alsohappy with the changes we’ve seen of late,but unless we see changes that put moremoney in our pockets—especially for ourlow volume stores—it's all just talk.n


“One thing Mr. DePinto

said in response was

that low volume stores

is something he is work-

ing on with his team.“



Jas Dhillon, East Coast, Chicago, Kansas, [email protected]

Roger St. George, [email protected]

Jay Singh, Seattle and [email protected]

National Office [email protected]

Having issues in your area? Have a problem with a vendor or with local management?

The National Coalition has Franchise Owner’s Association

member organizations in all 31 statesin which 7-Eleven operates.

Want to talk?

Want to find the closest FOA to you? Visit www.NCASEF.com to contact one of the 42 local Franchise Owner’s Associations nationwide. Want to talk to someoneat the national level? Call the NCASEF Vice Chairman in your area:

National Coalition offices are located at 740 Front Street, Suite 170, Santa Cruz, CA 95060; 831-426-4711; [email protected].

Charitable Trusts. • Tar-get is partnering withKaiser Permanente toopen four clinics in Southern California thatwill offer an expanded range of health services—including pediatric primary care, vaccinations, andmanagement of chronic illnesses, reported MedC-ityNews.com • IndiaMART, India's largest on-line marketplace for businesses, revealedit has hired renown actor Irrfan Khan as thenew face for its upcoming mega brand campaign.• The U.S. Department of Labor’s OccupationalSafety and Health Administration sent out a letterto all retail employers in early November encour-aging them to implement safety measures to pre-vent workplace injuries during major sales events,including Black Friday. • Almost 23 percent ofhigh school students currently use a to-bacco product, according to new data publishedby the Centers for Disease Control and Prevention.More than 90 percent of those using a to-bacco product are using combustible to-bacco products such as cigarettes, cigars,hookahs, and pipes. • According to candy makersMars Inc. and Barry Callebaut AG, consumer de-mand for chocolate will exceed cocoa supply by



Our Chicagoland MeetingWith SEI Executives

UFOLI Jack Rugen, Vice President

UFOLI elections were held November18. We have a new President—Jack Rugen,and a new First Vice President—Basit

Khurshid. All the other Board membersremain in place and we have picked uptwo former Board members. We are looking to bring UFOLI to ahigher level of concept-driven reasoningand management. We intend to workclosely with local middle management tomend and renew our relationship. Wepledge to change the dynamic of theBoard by building a Board that representsthe diverse ethnicity of our membership.We promise to help franchisees in anyway possible while building a strongworking relationship with 7-Eleven, Inc.and maintaining a solid relationship withour vendors. Sales are flat to negative in all fourmarkets. New stores should be in doubledigits, but are not. The 50-cent small cof-

fee we promoted in September grew coffeesales an average of 1,000 cups per weekper store with the help of local TV andradio spots. As soon as the promotionended, sales went back to usual. Therehave been no TV or radio spots since. We are enthusiastic about Joe De-Pinto’s renewed engagement with the Na-tional Coalition. We are hopeful it willtrickle down to local management. Re-cently, our Zone Leader held his first-everZone Leadership meeting but, none of ourBoard members were made aware of it.We hope to change this dynamic.

DELAWARE VALLEY FOAAl Haffar, President

Sales are up an average of 5 percent inmany stores. Some stores surrounding thecity of Philadelphia have experienced ahuge spike in cigarettes sales, while somestores within the city of Philadelphia havesuffered as much as a 30 percent drop dueto a city cigarette tax increase of $2. Sales in our area may have had a softincrease, but have remained less than ex-pected due to fierce local competition

Presidents’— R E P O R T S —

NCASEF Vice Chairman Jas Dhillon said franchiseesshould have the freedom to order whatever we want.

Executive Vice Chair Jivtesh Gill noted some opening ofcommunication and approach from 7-Eleven, Inc.

Treasurer Maninder Walia reported on the stateof the National Coalition’s finances.



from Wawa, Dunkin’ Donuts, McDonald’sand Starbucks. Two factors have workedagainst us: outdated stores reflecting anold image, and a lack of advertising. Costof goods and contract renewal have beentroubling to many franchisees. Electionsin our FOA were conducted last August 4for the four positions of officers. Goodluck to all officers elected.

WASHINGTON,D.C. FOAMark Chiochankitmun,President

The Hybrid BusinessTransformation systemhas been implemented inWashington, D.C. over thepast few months. So far weare seeing a lot of greatthings in the “not so nearfuture.” In the meantime,franchisees have beenspending a lot of money toget their employees andthemselves trained andpracticed on the new sys-tem. Franchisees have alsobeen facing some prob-lems, like inconsistencywith McLane, CDC andDSD delivery windows. There have also beenmany glitches in our ISPdue to RISE, which meanswe are spending too muchtime on cycle counts to en-sure the true “I”—especiallyon the holiday deliverywhen McLane could not deliver under ournew Hybrid BT system and had to manu-ally check in McLane under the old sys-tem, then do all the cycle counts again onevery item in the store in order to populatethe true “I.” This is a real pain I do notwant any other franchisee to deal with,and we have asked SEI to fixed all these is-

sues prior to implementing the Hybrid BTin the other areas. Our morale has been at an all-timelow because of the direction taken by alllevels of SEI management to force newsystems and programs upon us. From SSCin Dallas down to the local field consult-ant, we are constantly being threatenedwith LONs and Breaches just to make sureSEI gets full participation from franchiseeswith no questions asked. I met our CEO Joe DePinto twice lastmonth, unexpectedly. Not many of ushave had the opportunity to see and have

a conversationwith him for the

past few years. I told him about our issuesand concerns, including the worse com-munication we have ever had within oursystem, morale at all-time lows, encroach-ment continuing to harm existing fran-chisees, and the cost of goods being toohigh and unacceptable through the CDCand Hybrid BT. Joe DePinto said, "Sorry,

I've been away. I accept full responsibility.I am back. I'll fix it." I believe he was sincere, and this isthe first time in a long while that I amseeing light at the other end of our tun-nel. It's been two weeks since I met ourCEO and things seem to be very quiet inthe best way possible. Washington, D.C.sales are up 5 percent due to additionalcigarettes sales we picked up from one of

our competitors, whochose to stop selling to-bacco products.

CAL-NEVAFOARich Rose,President

As the holiday season isupon us, we as 7-Elevenfranchisees realize that

2014 is coming to anend … and what ayear it has been.This year the North-ern Nevada andLake Tahoe area hasseen many changes,from changeovers,to stores going backto the corporationand then franchised

again, to one store being closed perma-nently. Sales district-wide are up between3 and 4 percent, and franchisees are re-porting that equity contributions arebeing saved up in order to get throughthe winter months. The Cal-Neva FOA held our first ven-dor’s Table Top Showcase this past Sep-tember, and it was well received by both

“THE FM PRICEINCREASE IS ON HOLD.”

—John Pavia, Vice President,FM Facility Maintenance


Attorney John Holland reported via videofeed on the status of the DVR discussions.

NCASEF Chairman Joe Galea reported that SEIagreed to freeze maintenance rate hikes.

General Counsel Eric Karp smmarized 7-Eleven’s position on the DVR for the Board.


franchisees and vendors alike. TheLou Magnotti Gold Classic was verysuccessful, with monies raised goingto the MDA and to fight Batten’s Disease,as well as to the Boys and Girls Club. Oc-tober was our second annual localfundraiser for the fight against breast can-

cer. Money earned in that benefit is stillbeing collected by all of the Cal-Neva 7-Eleven franchise stores.

B u s i n e s sTransformation(BT) had a suc-cessful intro-duction in theR e n o - Ta h o eMarket. How-ever, there is amajor problemwith our twoliquor and wine

distributors. First, 7-Eleven has the wronglowest deliverable unit (LDU) set-up,causing massive corrections by fran-chisees on product. These corrections

often come out two to three timesabove the true retail. This problemhas been reported several times byfranchisees and field consultants.

Another vendor problem is that in-voices that are paid with cash are still beingsubmitted for payment. Even stores that donot pay with cash have problems with thissame vendor. What is happening is thatwhen there is a correction to be made onthe invoice, the driver makes that correc-tion and signs the invoice, but the com-pany does not honor the written credit forthese items. The full non-corrected invoiceis then sent to 7-Eleven and the franchiseemust then report all mistakes that were notcredited, or pay for all the items not re-ceived. The franchisee must then make aninventory adjustment to get the due credit. There are way too many hoops tojump through. This is not proper account-ing procedure and the problem needs tobe solved. The concern of many fran-chisees is why 7-Eleven is not correctingthese problems, and leads some to believethat it is because there are large ramifica-tions for the franchisee with InventoryVariation at the store level if these correc-tions are not made.

EASTERN VIRGINIA FOARomy Singh, President

Our FOA is working beyond bound-aries. There is a saying: “Give a man a fishand you feed him for a day. Teach a manto fish and you feed him for a lifetime.”Our FOA established a committee thatwill help struggling franchisees. We willsend our volunteers to any franchisee whoneeds help, regardless of their member-ship. Our representatives will sit withthese franchisees and share their expertise,to help them to succeed.



Eastern Virginia FOA President Romy Singh urged the Boardto help franchisees having trouble making ends meet.

NCASEF Vice Chairman Roger St. George said franchiseesneed the ability to add items to McLane orders.

Southern California Vice President Paul Lobanasaid the DVR issue needs resolution.

Swedish Match rep Aaron Choate saidWhite Owl and Game are driving growth.

“WE ARE NOT INTERESTED INDIALOGUE FOR DIALOGUE’SSAKE. WE WANT RESULTS.”

—Eric Karp, General Counsel, NCASEF


Suburban Washington FOA President Pete Gragnano said BT’s introduction in the LibertyZone has caused some shortages and overages.

Simply Orange’s Tim Zeigler pre-sented new Fruit Punch andTropical Punch drinks.


Our FOA recently conducted afranchisee satisfaction survey andthe results were shared with ourzone leader directly. There were issueswith field consultants, but we were as-sured by our zone leader that they will besorted out promptly. Our FOA had a franchisee meetingon October 22. We asked Asset Protectionto come and talk about the common mis-takes franchisees were making so we couldlimit the amount of FIWs franchisees re-ceived for unintentional mistakes. TerryDrivas, head of Asset Protection in the Pa-triot Zone, and his team answered all fran-chisee concerns. Three of our four marketmanagers were also present at the meetingand they answered all franchisee concerns.There were questions raised regardingCDC delivery/in stock/merchandisingand several other issues. We assured themthat these mistakes will be fixed by thenext meeting. There are challenges in every busi-ness. I hope that by implementing BT nextyear and with the use of RISE this year, wewill be able to resolve several of our issues.We also hope BT will be launched in atimely manner that will not adversely im-pact our summer sales, particularly in theVirginia Beach area. A smooth transitionis of utmost importance. We try our best to work on franchiseeissues and frustrations and pass them on

to our local opera-tions team to col-lectively find theright solutions.Open communica-tion with local SEIoperations is key toresolving lowerlevel issues andfrustration. Thenew approach SEIhas taken is wel-come and I hope it will boost the moraleof franchisees. At our most recent RImeeting, I was presented an award forleadership and Best Coordination byTerry Drivas. I was truly honored to re-ceive the recognition. I wish everyone a Happy New Yearand success for your business.

GREATER SEATTLE FOAAjinder Handa,President

Because of Mother Nature’s warmgenerosity, we had an excellent summerthis year. Our zone enjoyed a sales increaseof about 3 percent across the board. Mar-ket 2360 enjoyed a net sales increase of 2.67

percent, which is $127 APSD, whereasMarket 2361 had a 4 percent ($202) salesincrease. Moreover, fresh food sales are upcompared to last year, around $51 perstore. However, Mother Nature has notbeen so kind to Western Washington lately,so November has been flat so far. RISE was supposed to be imple-mented in November, but was postponeduntil further notice due to some issues.However, we are looking forward to RISE’simplementation in our area. It has beentested in some pilot stores with some verymixed results, just like BT. We will awaitits arrival to see the results ourselves. There has been a lot of concern withinthe franchisee community about RGIS forour audits. Some franchisees have been very

Central Florida FOA President Fari Ishani urged theBoard to focus on the issue of gas commissions.

Perfetti Van Melle’s Scott Swanson said Extreme isovertaking Mentos as the main business driver.

Central Valley FOA Vice President Sukhi Sandhu saidfranchisees have stepped up and gotten involved.


FM Facility Maintenance execs TrevorFoster and John Pavia said they haveno problem sharing their contractwith franchisees.


continued next page

frustrated, finding numerous mistakes byaudit personnel when audits are finished.The same goes for accounting—more andmore mistakes are being found by fran-chisees as time continues. To address thisissue there is a new way of making a case on7-Hub for accounting, but in reality it is nodifferent than what we had before. It’s timeto have a live person with whom franchiseescan communicate accounting needs. Because fresh food service sales aregetting more intense than ever, our localSEI management has reintroduced theSEAL team, whose motive is to help fran-chisees improve their food service. SEIclaimed that the SEAL team has helpedfranchisees in the Portland area look atfresh foods from a different perspective,and even reintroduced fresh sandwiches,fruit, salad, and bakery products. We willgive our feedback once this program isfully implemented and tested.

SUBURBANWASHINGTONFOAPeter Gragnano, President

Business Transformation was intro-duced in the Liberty Zone in June, withthe last market in the Zone starting theprogram at the end of September. At thispoint all stores have had inventory auditsconducted to “populate the I,” but this hasnot been as smooth as anticipated. Anumber of stores have seen unusually highshortages (some as high as $30,000) whileothers have experienced overages. Once again the ability of RGIS, thecompany used by SEI to perform our au-dits, has come into question. Auditorshave been found to count like items (for

example, different bread SKUs orchicken wings) as a single total,thus defeating one of the primarypurposes of BT. In other instancesthey have been found not to befollowing SEI directions, such as“walking the store” before andafter the audit, or providing a“mid-point” report for store re-view during the audit. On a related matter, storescontinue to have issues withMcLane in regard to delivery pro-cedures outlined by 7-Eleven as

part of the BT process. Not only do we nothave any say as to when we want the de-livery to take place, McLane also will notbring chilled or frozen items into the vault,or stage the delivery at the direction of thestore. A meeting has been scheduled with

McLane Mid-Atlantic, SEI, and the localFOAs to try to reach a mutually acceptablecompromise, and to remind both SEI andMcLane that we are the customer. In September a number of stores re-ceived via McLane the Njoy Vapor display,which they did not order. After numerousphone calls and emails, it was found thatthe items had been ordered by the variousmarket managers in our Zone under pres-sure from Dallas to meet the fill rate forthe promotion. After consulting with theNational Coalition office that this was a vi-olation of our independent contractor sta-tus, the local FOAs met with Liberty ZoneLeader Jim Summers to protest this prac-tice. We have been assured that changeshave been made in Dallas, which will pre-clude the ordering of any pre-book if notdone at the store’s ISP. We will be having a joint holidayparty with the Baltimore FOA on Decem-ber 6 at the Maryland Live Casino. A buf-fet dinner, concert at the Casino’s theater,and gambling on the casino floor will bethe highlights of the evening. Together with the Baltimore andWashington, D.C. FOAs under the um-brella of the TriState FOSE Association, weheld our annual golf tournament to bene-fit Johns Hopkins Children’s Center inSeptember, and will be presenting the


Southern California FOA President Nick Bhullar said BT isworking and most franchisees value the system.

“SEI MUST QUICKLY RESOLVE THE ISSUE OFMINIMUM WAGE HIKES ACROSS THE COUNTRY.”

—Jivtesh Gill, NCASEF Executive Vice Chairman

Chairman Bruce Maples urged the Board to consideradditional developement of the NCASEF bylaws.

General Mills rep Randy Johnson said franchiseeshave a unique opportunity in fresh packaged bakery.


Hospital with the proceeds of theevent before the end of the year. We wish all franchisees a happy,healthy and prosperous 2015.

JOE SARACENO FOA Matt Mattu, President

The Joe Saraceno FOA would like toextend its warmest greetings for the sea-son and best wishes for happiness in thenew year, with holiday blessings toall the 7-Eleven franchiseesthroughout the nation and theirloved ones! At the last Zone Leadership, inattendance were all of our marketmanagers, Zone Leader NormHower, Vice President Field Oper-ations Western Hemisphere DanSoper, along with our NBLC repre-sentatives and local franchiseeleadership. We discussed variousissues affecting franchisees, and it

was declared these meetings will be re-sults-oriented so the issues can be resolvedin a timely manner. Hopefully this trendwill continue so we can progress as a unit. GP is up 0.24, an average of 39.19 per-cent. Inventory turns are 21.5, an increaseof 0.36. Net income is up by 6.83 percent.

The private brandswere discussed due toquality of packagingand freshness issues,with the goal being 7to 8 percent of storecarried items.The McLane reroute

with six-day delivery isa problem for some of

the stores. Local management is helping tosolve issues at the store level. CustomerProfitability Model (CPM) was discussed

and we were informed we would getclear answers.The minimum wage increase is

a big issue with the franchise com-munity, because it may increase to $13.50per hour. We have been arranging and at-tending meetings with the local council-men and senators, but we need help from7-Eleven. Joe DePinto, along with his executiveteam, met with the National CoalitionBoard in Dallas and promised to bridge thegap of involvement and communications.He also committed himself to attend theNational Coalition meetings to hear theconcerns of the franchise community firsthand. As we all know, and acknowledgedby Joe DePinto, there has been a commu-nication gap for the last few years. Hope-fully the outcries of the franchisees will beheard in a timely manner, as a higher levelof SEI involvement leads to a higher qual-ity relationship between the franchisor andthe franchisees. I am hoping that 2015 willbe the year of change for the 7-Eleven sys-tem, to the benefit of us all.

CENTRAL VALLEYFOASukhi Sandhu, Vice President

2014 has been an exciting and chal-lenging year, but we are all excited to seewhat 2015 brings us. In 2014, our area sawan increase of sales over 2.5 percent. Our

leading category was Fresh Foodsat plus 10 percent, with our high-est increase coming from the HotFoods category as we continue toadd more hot food stores in theEast Bay area and Central Valley.We enjoyed our collaborationproducts like Doritos Loaded, andlook forward to the BBQ chickenpizza. The great combo deals withmultiple pizza purchases, wingsand pizza, and pizza, 2-liter soda



Hashim Syed, FOA Chicagoland, Serge Haitayan, Sierra FOA, and Jas Dhillon, FOA of Greater Los Angeles pre-vailed in National Coalition elections for vice chairmen 2015-2016.

Bob Price, Texas FOA, Jerry Sahnan, Phoenix FOA, and Bill Huffman, Co-lumbia Pacific FOA kept track of votes and executed the voting procedure.

McLane Senior Vice President Stuart Clark provided an overview anddiscussion of strategic sales opportunities for franchisees.




and chips have definitely helped ex-pand the hot foods market basket. Fresh Bakery has also helped oursales, with a 16.5 percent sales increase.Our Zone’s "focus donut" and the muffinand coffee promo have been proven suc-cesses. I can't remember a time when our

Zone averaged 24 muffins PSD.Other leading categories were Al-coholic Bevervages (+8.2 percent),Services (+7 percent), and Snacks(+4.4 percent). A really exciting thing we arelooking forward to in 2015, other thanmaking more money, is combining our ef-forts with two other FOAs (Greater Bayand Northern California) to host an amaz-ing trade show. It's become evident that wecan offer our members a more rewardingand beneficial trade show experience bycombining our FOA efforts. Our tradeshow will take place on March 13, 2015 atThunder Valley Casino and Resort, rightbefore our best selling season—summer.

We are all anticipating the results ofboth the company and National CoalitionFOA survey giving the franchisees a voiceto express their opinion of services pro-vided. The value of any survey is what onedoes with the results. To all, Happy Holidays and let's make2015 a very successful and profitable year!

FOA OF GREATERLOS ANGELESKathy York, President

As we close out 2014, we are still hav-ing bill-back issues. These errors are whywe want the allowances on the invoices. Iunderstand there is an accrual for No-vember so it doesn't distort gross profit,

but bill-back issues have been a con-cern for too long.FOAGLA attorney Craig Ken-

nedy and I are working with SEI toresolve and come to a resolution regardingthe requests for mediation we have for 39stores. Last month, all of the FIWs wererecalculated, as the first ones were calcu-lated incorrectly. We’re looking forward to our annualChristmas party on December 12 and ourannual trade show in January that we dojointly with the San Diego FOA.

KANSAS CITY FOAFaisal Asad, President Franchisees in Kansas Cith and St.Louis are looking forward to changes fromSEI top leadership, which may impactfranchisees’ morale and bottom lines.Franchisees welcomed the news about therecent meetings of SEI top leadership andtheir commitment! We need to be on the forefront of test-ing new concepts or models in Market 1951


Cal Neva FOA President Rich Rose said thatBT has had a successful introduction in theReno-Tahoe market.

California PAC President Jas Dhillon re-ported on the need to continue to supportfair franchising legislation like SB610.


Bon Appetite’s Mike Kawas said the company hasseveral prebooks in the works for 2015.

Monster reps Trusha Patel and Kellen Flores thankedfranchisees for supporting Monster Black.

Anheuser Busch rep Ralph Talamantez said theircompany needs quicker response from franchisees.

Kansas City FOA President Faisal Asad emphasizedthe importance of gas competition.

because QT, On The Run, U Gas, and Kicks66 are all in our backyard. Grocery storeHyVee has been opening up its own gas sta-tions and QT is still in bed with Price Chop-per for gas co-op. We need to adopt quicklyto stop losing guests to the grocery channeland gas co-ops. We must have in-store pro-motions for gas discounts! Gas is importantto guest perception in our area, and doingnothing will erode our gas business. The Kansas City area is on a boom,and if SEI invests right in this market-place, KC will reap a big return on invest-ment in coming years. Lastly, I was toldthat Market 1951 was not a growth Mar-ket. I hope that changes and we open upnew stores in downtown KC and St.Louis, and if possible get branded gaso-line from Conoco Philips like some of thestores in our area. Some YTD facts: Merchandise salesare up 2.04 percent; Merchandise GP is up3.33 percent: Total GP is up 6.54 percent;Inventory Turns are up 8.78 percent (from14.8 to 16.1); T-counts at 99.1 percent,down (0.9) from 876 to 873 APSD.

SAN FRANCISCO/MONTEREY BAYFOAJoe Galea, President

Currently, we are looking at a salesgrowth of 6-7 percent throughout ourFOA area, which includes four differentmarkets. Our customer counts are also up.The main area of concern, however, is thatour gross profit is down—either by pro-motions or other factors—which is alsoreflected in income for the franchisees. Another concern is the RIS programthat is in the process of rolling out. It hasbeen implemented in a couple of markets,but some have put it on hold until the endof January 2015. There have been manyquestions, concerns and confusion aboutthe rollout. Compounded with that, weare hearing more and more about prob-

lems with the 7-Eleven accountingsystem, especially inJuly when therewere numerousmistakes made tomerchandising re-ports. There are alsomany unansweredquestions regardingthe accounting and7-Eleven proce-dures as far as get-ting issues resolved. Business Trans-formation was rol-led out in themiddle of the year,but there are stillmany concerns and

issues, even though there is an under-standing of the concept. Among the trou-ble we’re having with BT is the ability toadd on to our orders. Additionally, our at-tempts to purchase Store Supported Itemskeep being rejected in Dallas, which isconflicting with our independent contrac-tor status and hampers franchisees fromgrowing their business. We look forward to 2015 with opti-mism, especially now that the folks in Dal-las are more receptive to meeting withfranchisees to discuss our concerns. Ourlocal SEI management in the last threemonths has been very supportive of fran-chisees and we are extremely happy thatthey are working with the local FOAgroups. We need to develop a true work-

ing partnership so franchisees, SEI andour vendors can all prosper. Our recent holiday party was well at-tended. We had our membership there,and SEI was very supportive. Our teamdid a great job of putting that event to-gether. In April we are going to participatein the first-ever Northern California tradeshow, which is also going to include thetwo FOA groups in Fresno, one in Bakers-field and Sacramento, and part of the Cal-Neva group. The San Francisco/MontereyBay FOA will host this group trade show,which is going to consolidate our vendorsinto one huge event. The trade show willbe held at the Santa Clara Marriott onApril 11, 2015. Call upon any of the FOApresidents for further information.

Franchisees and affiliate membervendors broke into groups to tackleissues like accessibility to non-rec-ommended products, the value ofDSD vendors, service levels by ven-dors, schematics, and managing in-ventory data in product purchasing.



Since the Affordable Care Act was passedin March 2010, there’s been a lot of confu-sion about this law. For many franchiseesthis confusion has led to uncertainty andstress. However, regardless of whetheryou’re for or against the healthcare mandate,the good news is that the Affordable CareAct is a win-win for the 7-Eleven franchiseecommunity.

HOW CAN THIS BE? Win #1 is for YOU: You now have theability to easily and quickly shop for healthinsurance coverage for you and your familyduring the open enrollment period, whichstarted on November 15, 2014. You may eval-uate and select the plan that best fits you andyour family’s needs. Even better, regardless ofyour health history, you can’t be turned downfor health insurance! Win #2 is for your EMPLOYEES: In thepast it may have been very difficult for youto offer an affordable group health insur-ance plan for your employees. Under theAffordable Care Act, most 7-Eleven fran-chisees are not required to offer medicalcoverage. This actually benefits your hourlyemployees, as many of these employees areeligible to enroll in Medicaid. Further, theirincomes will likely allow them to enroll inthe health insurance plans availablethrough the Exchanges and not only receiveheavily subsidizedpremiums, but alsoreceive heavily sub-sidized coveragefor out of pocketcosts. In short, theExchange plans willlikely offer bettercoverage with pre-

mium and protection subsidies beyondanything you, as an employer, could likelyafford to offer.

HOW DOES THIS HELPMY BUSINESS? If you are an employer with less than 100employees at all commonly owned businessesin 2015 (this is slated to change to less than 50full-time employees in 2016), you have a signif-icant advantage over larger employers because:1. You are under NO obligation to offer ahealth insurance plan.2. The Exchange plans are likely to offer a bet-ter deal for both you and your employees thanif you offered a group health plan.

3. As a small employer, you have the abilityto offer your hourly employees a 40-hourworkweek. On the other hand, larger em-ployers may feel compelled to aggressivelycap the amount of hours their employeeswork to less than 30 hours per week (other-wise, they may be required to offer a grouphealth insurance plan or pay substantialfines). This should help you become the em-ployer of choice, compete with larger em-ployers, and select better employees in thelabor marketplace.

WHAT SHOULD I DO NEXT? You can make this information availableto your employees. Log onto www.7-eleven.lewer.com for free, printable infor-mation you can include as a handout andflyers that you can post in your break room.It’s as easy as that. The Lewer Agency, through the 7-ElevenFranchisee Benefits program, is providingyou and your employees a simple and quickway to shop, compare, and enroll in the Ex-changes. This service is at no cost to yourbusiness. Go online or call today to compareplans and get enrolled. Limited-time open enrollment ends Feb-ruary 15th. Enroll today to secure your 2015benefits. n

For more information visitwww.7-eleven.lewer.com or call 1-866-588-7696. Also see ad opposite page.

“Log onto www.7-eleven.lewer.com

for free, printable information you can

include as a handout and flyers that

you can post in your break room.

It’s as easy as that.”

Healthcare Insurance Open Enrollment Is Happening NOW!Put The Law To Work Helping You And Your Store Employees

Vendor Guest Column

“You now have the ability to easily and quickly shop

for health insurance coverage for you and your fam-

ily during the open enrollment period, which started

on November 15, 2014 and ends February 15th.”




As I look back on my 7-Eleven career, I see the 7-Eleven franchise sys-tem as a great system that allowed storeowners to make a decent livingand comfortably support their families. Franchisees countrywide couldput in an honest day’s work and make an honest buck, and we could ex-pect a reward at the end of our contract. Today things seem to havechanged. Franchisees work harder and I’m wondering how many of usare earning the same income or less. We desperately need to get our sys-tem back on the right course so franchisees can once again feel like weare getting a reasonable return on our investments of time and money.

Franchisees don’t mind putting in the longhours, as long as the extra effort leads to highersales and profits, but the truth of the matter isthat many franchisees seem to be strugglingjust to get by. Some are working 10 to 12 hoursevery day with no vacation, but are barely ableto make ends meet. Others have decided to return their low-volumestores and leave the system entirely because they didn’t see a bright fu-ture for themselves or their families with 7-Eleven.

Our franchisor may claim franchisees are earning "much more," butthe reality is we are dealing with declining incomes and increasing ex-penses. Our maintenance costs have increased by 30 percent in the last10 years, and our labor costs continue to rise every month. I can’t evenpredict what will happen in the next few years when minimum wages

rise and a $15 minimum wage becomes the norm. How many of us willbe left with no other recourse than to return our stores and find a differ-ent way to make a living? It certainly doesn’t help that, after ten years ofbuilding our store sales to a decently profitable level, we are asked topay an additional franchisee fee to renew our own contracts. We fran-chisees should be rewarded for our efforts and accomplishments, insteadof being made to re-qualify and pay a higher fee.

Since the 2009 Agreement, SEI’s portion of our gross profit split hasmade franchisees feel there is no longer a 50-50 partnership with our fran-

chisor. Franchisees feel a store has to generate sales of $1.35 million just tobreak even with expenses. Then, if a franchisee grows sales from $2 millionto $3 million with his or her hard work, SEI starts taking a bigger cut.

Encroachment is another issue affecting our livelihoods. SEI’s storegrowth, some 2,000 stores over the last three years, is a direct challengeto existing 7-Eleven franchisees. SEI should reevaluate its expansion planso it doesn’t open new stores close to existing 7-Elevens and instead ex-pand in areas where growth is needed. It’s been said time and again: wecan compete with any other c-store, but we can’t compete with another7-Eleven, especially when it’s newer.

Developing store sales plans that generate more profits will also helpalleviate some of our pain. Presently, we have too few promos with ade-quate funding from our vendors. SEI also needs to get us better cost ofgoods. I have seen too many instances where vendors are selling atlower cost to our competitors and even to mom and pop c-stores. Thevast majority of franchisees strongly believe that we are not getting thebest price of goods.

SEI needs to work with franchisee leaders in the National Coalitionand at the local FOA level to rebuild confidence within the franchiseecommunity. We need a true 50-50 contract. Nowis the time for SEI to seriously develop a plan andmake changes in our operations that will makefranchisees more profitable.

REBUILD FRANCHISEE CONFIDENCE AND PAVE A ROAD TO SUCCESSBy Romy Singh, President, Eastern Virginia FOA

ROMY SINGH CAN BE REACHED AT

[email protected] 757-506-5926

“It certainly doesn’t help that after ten years ofbuilding our store sales, we are asked to pay an

additional franchisee fee to renew our own contracts.”

“Franchisees don’t mind putting inthe long hours as long as the extra

effort leads to higher sales andprofits.”



2020, creating a gap insupply and demand of 1million metric tons, reported Bloomberg. • Star-bucks recently unveiled Powermat wirelesscharging in approximately 200 of its stores in theSan Francisco Bay Area. This launch is the first stepin Starbucks strategic plan to offer Powermatthroughout its U.S. locations. • While total con-sumer traffic to U.S. restaurants was flat in thequarter ending September 2014, the QSR cate-gories of fast casual, coffee/donut/bagel,and Mexican posted visit gains, according toThe NPD Group’s foodservice market research. •Washington's legal recreational marijuanamarket is bringing in more tax revenue tothe state than originally predicted, reportedthe Associated Press. The industry is expected togenerate more than $694 million through the mid-dle of 2019, up from the previously forecasted$636 million. • A new survey from CashStar revealsthat a majority of consumers would like toreceive gift cards instead of physical gifts,but many feel guilty admitting that theywant to receive them. • Dunkin’ Donuts an-nounced that it has recently achieved two big digi-tal milestones, having reached two million DDPerks Rewards loyalty members and surpassingmore than 10 million downloads of its mobile app.• Allstate helped shoppers find their parked carsthis holiday season by adding a free Parking Re-minder feature to its mobile app. • Black Fri-day weekend retail spending fell about 11.3percent compared to last year, and total shoppingtraffic in stores and online dropped by 5.2 percent,according to a new survey by the National RetailFederation. • A national health survey conductedby the Centers for Disease Control and Preventionfound that 17.8 percent of U.S. adults—or42.1 million people—were “current ciga-rette smokers” in 2013, the lowest percent-age since the annual survey began keeping



Massachusetts VotersApprove Paid Sick Time During the November 4 electionsMassachusetts voters approved Question4, a measure allowing workers at compa-nies with at least 11 em-ployees to earn paid sicktime, reported Boston.com.When the law goes into ef-fect next July, employeeswhose companies do notoffer sick time as a benefitwill be able to earn onehour of paid time off forpersonal illness or medicalappointments, for an illnessin the family, or to dealwith a domestic abuse situ-ation for every 30 hours worked. Em-ployees will not be able to earn more than40 paid hours per year. The new law willalso give workers at companies withfewer than 11 employees the chance toearn unpaid sick time.

Bid To Expand Massachusetts Bottle Law Sunk Massachusetts voters overwhelm-ingly rejected a ballot initiative on ex-panding the state’s bottle deposit lawduring the November elections, reportedthe Boston Globe. Nearly three-quarters ofvoters rejected Question 2, which sought

to include bottled water, sports drinks,and other noncarbonated beveragesamong the bottles subject to a nickel de-posit. The effort to expand the bottle lawwas defeated with the help of a barrage oftelevision advertisements financed with

nearly $9 million by thebeverage industry andlarge supermarket chains.Supporters of the measurecontended that expandingthe law would increase re-cycling, reduce litter, andsave cities and towns mil-lions of dollars by reduc-ing the amount of trashsent to landfills. Oppo-nents argued that the bot-

tle law is an inefficient, antiquatedprogram that raises prices for consumers.

NYC Considers NewWays To Cap Soda Size Mayor Bill de Blasio’s administra-tion is exploring new ways to regulatethe size of large sugary drinks in NewYork City, holding high-level meetingsbehind closed doors with health advo-cates and beverage industry executives,reported the Wall Street Journal. Thesetalks could revive an issue championedby Mayor de Blasio’s predecessor,Michael Bloomberg, who oversaw a sug-ary drink ban in 2012 that was eventu-ally overturned by the courts. Mayor de

LegislativeUpdate

Massachusetts

voters approved a

measure allowing

workers to earn

paid sick time.


website at

Play The Name Game!Look carefully at each page in this issue. Some-where in this magazine a line is hidden that containsthe words $Name Game Winner + person’s name +city$. If you find this line, and it contains your name,call AVANTI’s Offices at 215 750-0178 before the next magazine is published, and win this issue’s total. NCASEF Members only.




track in 1965. • TheHershey Co. plans to re-place the high-fructose corn syrup in someof its candy—like Take 5, PayDay, Almond Joyand York Peppermint Pattie—with sugar, reportedThe Daily Mail. • Discover sued Visa recently,alleging the world's largest cards companyhas been using anti-competitive practicesin its debit card business, reported Reuters. • Balti-more-based c-store chain Royal Farms plans toexpand in the Delaware Valley, a suburb ofPhiladelphia, in which Wawa has long domi-nated, reported the Philadelphia Business Journal. •Wawa Inc. recently announced it will become thefirst national retailer in the convenience store chan-nel to offer the Coca-Cola Freestyle soda foun-tain chain-wide. The touch screen beveragemachine will roll out to all Wawa stores by May2015. • Starbucks recently announced plansto double its U.S. food revenue to over $4billion over the next five years. The companyalso said that by the end of FY2019, 20-25 percentof its stores in the U.S. will offer the StarbucksEvenings experience, adding approximately $1billion in revenue. • The Hershey Company an-nounced that it has completed the purchase of TheAllan Candy Company, a leading North Ameri-can manufacturer of quality confectionery prod-ucts—including Allan, Big Foot, Hot Lips andLaces—based in Ontario, Canada. •Livability.com recently named the 10 Best BeerCities 2014, which offer innovative breweries, resi-dents who consume beer at higher rates, sophisti-cated beer tastes and a high-quality of life for beerlovers: 1. Bend, OR; 2. Denver, CO; 3. SanDiego, CA; 4. Albuquerque, NM; 5. Tampa, FL; 6.Grand Rapids, MI; 7. St. Louis, MO; 8. Bellingham,WA; 9. Hershey, PA; 10. Billings, MT. • McDonald'splans to expand its Create Your Taste test to30 locations in five states right away before rollingit out in 2,000 units next year, reported USA Today.




website at

Blasio has vowed to find a way to limitthe size of drinks—a move public-healthadvocates say would help fight obesity—but has yet to sign off on a new approach.

Indiana Business Coalition Pushes Sunday Alcohol Sales Some prominent Indiana businessgroups have formed a new coalition in aneffort to legalize Sunday alcohol sales atgroceries, drugstores and liquor and con-venience stores, reported the IndianapolisStar. Hoosiers for Sunday Sales—a coali-tion of consumers and retailers fromacross Indiana—kicked off a campaign inearly December in support of legislationto allow expanded alcohol sales on Sun-days. The group already has support fromthe Indiana Chamber of Commerce and

the Indiana RetailCouncil, which repre-sents grocery stores.

The cre-ation of Hoosiers forSunday Sales is justthe latest indicationof renewed momen-tum for those whowant to repeal theProhibition-era ban

on carryout alcohol sales. More than 52percent of Indiana residents support anexpansion of Sunday alcohol sales, whileabout 46 percent of those surveyed op-pose the change, according to a recentWISH-TV/Ball State Hoosier Survey.

More Cities Raise Tobacco Age To 21 A grass roots movement to raise thelegal age for buying cigarettes and othertobacco products to 21 years from 18 isgaining traction, reported the Wall StreetJournal. Most recently, the city council in

Evanston, Illinois banned tobacco salesto anyone under the age of 21. In the pastyear, the list of communities passing lawsbanning tobacco sales to anybody under21 has grown—from New York City toHealdsburg in Sonoma County winecountry. In Massachusetts alone, 30communities have passed or enactedsuch regulations in 2014, inspired by abig drop in teen smoking in the town ofNeedham. Now, states are taking notice.New Jersey’s senate in June approved abill to raise the purchase age to 21; itshouse is expected to vote next year. Col-orado’s legislature defeated a similar pro-posal in March, but is expected to revisitthe issue.

Virginia Endorses Licensing Of CigaretteRetailers The Virginia State Crime Commis-sion recently endorsed the licensing ofcigarette retailers as a way to help curbillegal trafficking to other states, re-ported the Richmond Times-Dispatch.Under the proposed legislation, the Vir-ginia Department of Alcoholic BeverageControl would manage the licensing,which would also cover other tobaccoproducts. Thirty-six other states alreadyrequire similar licenses. At 30 cents per pack, Virginia hasone of the lowest cigarette excise taxes inthe country, which attracts traffickersfrom nearby high-tax states who canmake tens of thousands of dollars inprofit but face penalties less severe thandrug traffickers if caught. The commis-sion said one advantage of licensing isknowing who is retailing cigarettes in thestate. Some fraudulent operators claim tolegally retail cigarettes bought wholesalein Virginia, but instead send them toother states for illegal sale.

Indiana busi-ness groups

have launcheda campaign tolegalize Sundayalcohol sales.

LegislativeUpdate

$Name Game Winner! Mohammad Farooq, Rochester, New York$

with eggs permanent additions to its menu.Only 40 percent of Dunkin's sales come after11 a.m., leaving a lot of room for growth.With hardier menu items typically reservedfor dinner, sales could grow at the more than2,300 Dunkin Donuts in the U.S. that areopen 24 hours, the company said.

Meanwhile, Starbucks is pressing aheadwith its evening menu, which consists ofwines and beer and small plates to beshared, after testing the menu in 32 U.S.stores in seven markets since 2012. The cof-fee chain now offers 10 standard small plateoptions as part of its evening menu, such astruffle macaroni and cheese and doublechocolate brownie bites. There are also fivechoices of red wine, three white wines, asparkling rose and proseco.

Banks Can Sue Target Over2013 Credit Card Hack

A District Court judge in Minnesota re-cently ruled that a group of banks can pro-ceed to sue Target for negligence in theDecember 2013 breach that resulted in thetheft of 40 million consumer credit cardnumbers, reported Ars Technica. The banksalleged that Target had “failed to heed warn-ing signs” that would have prevented thebanks' losses.

The decision could lead to significantchanges in the way the cost of fraud is dis-tributed among parties in the credit cardecosystem. Where once banks and merchant

acquirers would haveto shoulder the burdenof fraud (which is howthey have long justifiedincreasing InterchangeFees), now, potentially,the judge’s order couldpave the way for morecard-issuing banks tosue merchants for notprotecting their POSsystems properly.

Couche-Tard’sNet Earnings Increase

For its second quarter of fis-cal 2015 ended October 12,2014, Canadian c-store retailerAlimentation Couche-Tard an-nounced net earnings of $286.4million, up 24.6 percent over thesecond quarter of fiscal year 2014. Thecompany said its same-store merchandiserevenues increased 2.8 percent in the U.S.,2.1 percent in Europe and 3.0 percent inCanada. Couche-Tard also reported mer-chandise and service gross margin stoodat 32.7 percent in the U.S., at 41.2 percentin Europe and at 33.5 percent in Canada,for a consolidated margin of 34.0 percent,an increase of 0.2 percent. Additionally,same-store road transportation fuel vol-ume increased 2.1 percent in the U.S., 2.2

percent in Europe and dropped 1.1 per-cent in Canada.

Disability Lawsuits Against Small BusinessesOn The Rise

Small-business owners face a growingnumber of disabled-access lawsuits in thewake of a recent appeals-court ruling givingrise to disabled “testers,” as well as the releaseof detailed federal specifications for curbramps, self-opening doors and other stan-dards, reported the Wall Street Journal. Forthe year through June 30, the number of law-suits filed under a section of the federal dis-ability law setting out accessibilityrequirements for businesses and other publicplaces increased nearly 55 percent to 1,939from 1,254 over the year-earlier period.Many of the lawsuits originated in Califor-nia, New York and Florida, and most end inquick settlements, often of less than $10,000.




The National Coalition Office Has Moved!The strength of an independent trade association lies inits ability to promote, protect and advance the best inter-ests of its members, something no single member or ad-visory group can achieve. The independent tradeassociation can create a better understanding betweenits members and those with whom it deals. NationalCoalition offices are located in Santa Cruz, California.

NCASEF Offices740 Front Street, Suite 170Santa Cruz, CA 95060Office 831-426-4711Fax 831-426-4713E-mail: [email protected]

The Columbia Pacific FOA held elections for its officers’ positions in November.Congratulations to the elected Executive Officers: (from left) Stan Singh (VicePresident), Ravinder Waraich (Vice President), Harbhajan Ghotra (President), Ju-naid Akhtar (Treasurer), and Rehan Ashraf (Secretary).

“Couche Tard’s 2014 U.S. second quarter same-store merchandise sales revenue increased 2.8 percent.”


Create Your Taste lets cus-tomers skip the counterand head to tablet-like kioskswhere they cancustomize their burger. • The U.S. Supreme Courtrecently rejected energy giant BP PLC's challengeto a class-action settlement of claimsstemming from the Deepwater Horizonrig explosion in 2010, giving businesses alongthe Gulf Coast six months to file new claimsagainst BP. • A new vending machine createdby Italy-based Rhea Vendors uses facial recog-nition and customers' medical records todetermine if they should be allowed tobuy an unhealthy snack, reported Spring-Wise.com. • Amazon.com now offers one-hour delivery for a range of “dailyessentials” in Manhattan, reported Giz-modo. The company said it plans to introduce theservice, called Prime Now, to additional cities in2015. • A new federal survey the National Insti-tute on Drug Abuse has found that e-cigaretteuse among teenagers has surpassed theuse of traditional cigarettes as smokinghas continued to decline, reported the NewYork Times. • E-cigarettes appear to be lessaddictive than cigarettes for formersmokers and this could help improve under-standing of how various nicotine delivery deviceslead to dependence, according to Penn State Col-lege of Medicine researchers. • The retail in-dustry will lose an estimated $10.9billion to return fraud in 2014, and retailersestimate $3.8 billion will be lost to return fraudthis holiday season, according to the National Re-tail Federation’s 2014 Return Fraud Survey. •Valero’s Boyett Petroleum completed thepurchase of fuel distribution contracts for90 branded 76 and Valero gas stations inCalifornia from MCW Fuels • Lotteries are be-coming a gamble for most states, as data from theNorth American Association of State and Provin-cial Lotteries (NASLP) reveals lottery sales in 2014Q3 remained flat compared to a last year. n




Last year, such lawsuits increased 9 percentto 2,719 from 2,495 in 2012.

Seven-Eleven Japan In Coffee War

Japan's convenience store operators arejostling for eminence in a famously cut-throat industry, and one product in particu-lar has them entangled in a fiercebattle—coffee, according to a Reuters report.Inspired by a popular 100 yen ($0.93) blendlaunched by McDonald's in 2008, Seven-Eleven Japan touched off a boom in c-storecoffee in 2013, lifting Japan's long-stagnantcoffee market and irking rival businesses.

Coffee, more than anything else, attractsboth new and repeat customers, who typi-cally also spend money on other items, con-venience store executives say. C-stores inJapan have been serving machine-made cof-fee for years, but it never caught on due toquality reasons. That all changed in January2013, when Seven-Eleven gave rivals a joltwith black coffee that was not only low-priced but also considered high quality. The100 yen, grind-on-the-spot all-Arabica"Seven Cafe" ignited a coffee war that has in-tensified as FamilyMart and Lawsonmatched the price.

The popularity of "conbini coffee"—Seven-Eleven alone aims to sell 600 millioncups in the year to February—pushed coffeeconsumption in Japan up 4 percent in 2013to a record 446,392 tons, according to the All

Japan Coffee Association. Data so far sug-gests another rise this year.

NACS To Host 16 UpdateLuncheons In 2015

NACS announced that its President andCEO Henry Armour will host 16 industryupdate luncheons in various cities aroundthe country in 2015 to share and discuss in-sights, issues and opportunities that are rel-evant to convenience and fuel industryretailers and suppliers. The NACS IndustryUpdate Luncheons bring together regionalconvenience and fuel retail and supplierleaders for a unique experience to connect,exchange ideas and hear industry perform-ance trends and metrics in a casual setting.Topics to be discussed include NACS Stateof the Industry Report data relevant to thevenue’s region, important legislative andregulatory issues facing the industry andNACS efforts to advocate on your behalf,and Topical Initiatives for retailers—includ-ing nutrition and anti-obesity campaigns,motor fuels, tobacco regulations, card swipefees and mobile commerce. For questionsand more information, contact Carolyn

Members of the Eastern VirginiaFOA recently attended a Zonemeeting that included a fran-chisee training class with Assetprotection. Overall, it was a veryproductive meeting.


Schnare [email protected] or(703) 518-4248.

Iowa To Implement Digital Driver's License

With the rise of services like Apple Payand Google Wallet, smartphones couldsoon replace the traditional wallet. With thatin mind, Iowa is developing a free driver'slicense app that would display an image ofan Iowa citizen's driver's license just like itwould appear on a plastic card, reported theDayton Daily News. It could be used any-time an Iowa resident needs a driver's li-cense, such as for traffic stops, purchasingalcohol or security screenings at Iowa air-ports. Iowa is one of 30 states that allowdrivers to show proof of insurance on theirphones. The app is still in development andis planned for testing sometime in 2015,with the hope of a full rollout in 2016.

Smokers Are Best Shoppers For Dollar-Store Chains

Although dollar-stores chains are rela-tive newcomers to selling cigarettes, they’vequickly discovered that smokers are some oftheir best customers, reported Bloomberg.Dollar General Corp. and Family DollarStores Inc.—the two largest dollar-storechains—began adding cigarettes in 2012 and2013, at a time of increasingly pressure todrop the products. Dollar-store customersare more likely to be smokers than typicalAmericans, making it a hard market to resist.

At Family Dollar, about a quarter ofcustomers smoke and that rises to 35 per-cent among the chain’s most frequent shop-

pers, the company said. That compareswith just 18 percent of all U.S. adults, ac-cording to the Centers for Disease Controland Prevention. After Family Dollar startedselling cigarettes in 2012, Dollar Generalentered the market the following year. LikeFamily Dollar shoppers, Dollar Generalcustomers smoke at higher rates than the

general public. The companies have almost20,000 locations combined, making themtwo of the largest retailers in the country.

CVS Revenue Rises On Pharmacy Strength

CVS Health Corp. posted a stronger-than-expected 9.7 percent increase in rev-enue for the third quarter, as strength in itspharmacy business offset a decline in front-of-the-store sales partly caused by the ab-sence of cigarettes, reported the Wall Street



“Dollar store chains Dollar General and FamilyDollar began adding cigarettes in 2012 and 2013.”



Franchisee Continues Holiday CoatDonation Tradition Sierra FOA President and NCASEF Vice Chair-Elect Serge Haitayan continuedhis holiday tradition of donating coats to disadvantaged children in the neighbor-hoods served by his store. This season, Serge purchased 400 coats and donated themto three schools: Turner Elementary, Bakman Elementary and Fancher Creek Ele-mentary. The kids, their parents and teachers were very appreciative of Serge’s gen-erous gift. Serge said he started the tradition eight years ago when he discovered thatmany children in his area go the entire winter without coats.


Journal. The company changed its name toCVS Health from CVS Caremark in Octo-ber when it stopped selling cigarettes andother tobacco items. CVS said the loss of to-bacco sales weighed on sales in the front ofthe store. Revenue from the retail pharmacybusiness rose 3.1 percent to $16.7 billion.Overall same-store sales rose 2 percent, withpharmacy sales rising 4.8 percent, offsettinga 4.5 percent decline infront-of-the-store sales.

Illinois TaxFraud Operation Nets $100 Million

Illinois Attorney General Lisa Madiganand the Illinois Department of Revenue(IDOR) recently announced that their jointongoing criminal enforcement operation toprosecute gas station owners who evadedsales tax payments has recovered over $100million for the state. The ongoing operationled by Madigan’s Special Prosecutions Bu-reau and IDOR’s Bureau of Criminal Inves-tigation was launched to recoup sales taxlosses from gas stations throughout Illinoisthat underreported revenuesto avoid paying taxesto the state. Of the 50gas station owners thathave been charged to date,40 defendants have been al-ready convicted, many of whomwere imprisoned. Additionally,tens of thousands of tax dollars havebeen recouped through IDOR audits.

POS Malware InfectionsSpiked Before Holiday Season

Going into the holiday season, hackersramped up their efforts to attack retailers and

other businesses with point-of-sale malware,reported CNBC. BackOff, which is one of themost effective strands of POS malware and isundetectable by most anti-virus software, sawa huge spike in the third quarter. BackOff in-fections increased 57 percent in August and27 percent in September, according to a re-port by the security firm Damballa, and is toblame for many of the recent POS breaches—

like Home Depot in September, followed byDairy Queen and Kmart. In fact, more than1,000 businesses have been infected withBackOff, the Department of Homeland Se-curity recently stated.

NACS Offers ProtectionTips On Protests

As the number of staged public demon-strations over employee wages and benefitscontinue to grow, NACS offers a series ofsteps for c-store owners to follow in theevent of a planned protest. The guide, de-

veloped by Fisher & Phillips LLP (anational law firm representingmanagement in labor and employ-ment law matters), indicates that re-

tailers should be prepared to address thefollowing aspects in the event of a plannedprotest nearby:• Identify the activity: The nature of the ac-tivity will typically determine the extent ofyour rights as a neutral employer.• Know the general ground rules: Under-stand what picketers are and are not per-mitted to do, under law.• Protecting your property rights: In most

states, third parties are not permitted to ac-cess your private property to engage inthese activities. While protesters may bepermitted to lawfully air their disputes onpublic property, they generally do not havethe right to use your private property tocarry out their objectives. • Communicate with your customers andemployees: While picketing and related ac-tivity threatens to disrupt virtually any busi-ness, there are steps that can be taken toreassure employees and customers alike. • Respond to the participants themselves: Ifthe protesters do show up, the best adviceis to remain calm. It is important to remem-ber that the protest is ostensibly directedagainst someone else.

East Coast FOA FilesFor Mediation With SEI

The East Coast FOA recently hit SEIwith a demand for mediation pursuant tothe Franchise Agreement over conduct itsays “is unlawful, wrongful, deceptive andconstitutes a breach of contract.” In a letterto SEI attorneys, sent by the group’s lawyers,the FOA claims its members are “subject toexcessive control from 7-Eleven” via itsstrict policies governing products, vendorsand prices. The FOA further claims that SEI“manipulates the terms of the FranchiseAgreement to deprive [East Coast] of eq-uity in its stores” by refusing to “provide anunderstandable accounting,” failing to “re-spond effectively to franchisee inquiries”and failing to “obtain competitive pricing,”among other things. SEI, through its legalrepresentation, responded to the group bystating that it only mediates with individualfranchisees as per the Franchisee Agree-ment. SEI also invited the FOA to identifyany members desiring mediation—and thedisputes that member wishes to mediate—so the company can “make an informed de-cision concerning the request.”

“BackOff, which is one of the most effective strands of POS malware and isundetectable by most anti-virus soware,saw a huge spike in the third quarter.”





website at

NY FRANCHISEE CROWNED'QUEEN OF COFFEE'

Southampton,New York fran-chisee Laurie De-Felice was recentlyhonored by SEI forhaving the busiestfranchise in the8,000-store chain inthe United States,

reported The Southampton Press. To cel-ebrate her store selling roughly 1,400 cupsof coffee and 400 donuts on a daily basis,Ms. DeFelice was crowned the Queen ofCoffee outside her store on County Road39 while surrounded by friends and fam-ily. According to SEI’s vice president ofmarketing, the company decided to namethe first Queen of Coffee this year to cel-ebrate the 50th anniversary of 7-Elevenfirst offering coffee to go.

SEI MAKES RECORD DONATION TO CSP'S CARRE

SEI Presidentand CEO Joe De-Pinto recently pre-sented a recordcontribution of

$50,000 to CARRE—the Charitable Al-liance of Restaurant & Retail Execu-tives—during CSP's 2014 OutlookLeadership conference, reported CSPDaily News. In total, $101,000 was raisedby the CARRE Foundation, with all pro-ceeds benefitting the Folds of HonorFoundation, which supports the spousesand children of soldiers killed or disabledin service to our country. "We applaudthe important work of CARRE and itsmission to support our industry, itsmembers and our community, and wishyou continued success," DePinto said.The annual CSP Outlook Leadership

conference brought together conven-ience store and petroleum retailing exec-utive-level retailers and suppliers, andtook place in Scottsdale, Arizona, fromNovember 16-19.

7-SELECT OTC DRUGS INTRODUCED 7-Eleven has entered the private-label drug business with its own 7-Select-branded, non-prescription medicines, ata savings of up to 85 percent per pill orounce for equal-to-or-better quality, SEIannounced. Participating stores carry 7-Select OTC remedies in five major cate-gories: pain relief, cold-flu-allergy,gastro-intestinal upset, cough/throat, andsleep aids. SEI has partnered with Perrigo,the largest generic medication supplier inthe U.S., to create its assortment. Most 7-Eleven stores will continue to carry pop-ular national brands in single-dose andlarger packages alongside its 7-Select op-tions. Some stores may choose to carryonly the new value-priced, private-brandchildren’s pain, cold and allergy remedies,the company said. 7-Eleven is one of thefirst convenience retailers to carry its ownextensive line of private-brandOTC medicines—up to 34varieties—with moreplanned for the future.

SAN DIEGO STORE OPENING BENEFITS LOCAL MUSIC PROGRAM SEI recently hosted a ribbon-cuttingceremony for its newest El Cajon, Cali-fornia store that included free coffee,donuts and guitars for local schools. Aspart of the event, the local market man-ager presented a $711 check to the SanDiego Music Foundation. The donation,equivalent to the cost of three Taylor gui-tars, will ultimately benefit area El CajonSchools through the foundation’s “Guitarsfor Schools” program, the company saidin a released statement. The Second Street7-Eleven location is the 19th in El Cajonand is available to franchise.

‘PAY-IT-FORWARD’ PIZZACAMPAIGN HELPS THE NEEDY 7-Eleven stores in the metropolitanareas of Buffalo and Rochester, New York,Pittsburgh, Detroit, Cleveland andCharleston, West Virginia recently invitedresidents to help put food on the tables oftheir less fortunate neighbors through its“pay-it-forward” with pizza campaign.During the three days leading up toThanksgiving customers were encour-

aged to donate a pizza, or sev-eral, for just $5.55 each. Thepizzas were delivered tonine food banks in the par-ticipating areas: FoodBank WNY in Buffalo;

Foodlink in Rochester;Greater Pittsburgh Community FoodBank in Duquesne, Pennsylvania; theGreater Cleveland Food Bank in Cleve-land; Gleaners in Pontiac, Michigan; For-gotten Harvest in Oak Park, Michigan;Old Man Rivers in Parkersburg; The Sal-vation Army in Clarksburg; and Moun-tain Mission in Charleston, West Virginia.

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Last August, these same 300 7-Eleven stores invited customers to giveaway pizzas to the needy. To say it was asuccess is an understatement. In one day,customers contributed more than 11,600pizzas, with the top-selling 7-Elevenstore, located on 150th Street in Cleve-land, selling 165 pizzas to be donated tothe local food bank. During the Halloween weekend,stores in Portland, Oregon also held a“pay-it-forward” pizza campaign. Morethan 90 7-Eleven stores participated inthe three-day drive, and the pizzas weredelivered to the Oregon Food Bank andBirch Community Services in Portlandand the LINKS food program in Vancou-ver. The Portland stores held their first“pay-it-forward” campaign in December2013, and the idea took off. One store—the 7-Eleven on NE Kane Drive in Gre-sham—sold 45 pizzas in a single day, andthe customers donated more than 1,300pizzas during the holiday campaign.

FREE CAR WASHES ON VETERAN'S DAY U.S. military personnel and veteranswere invited to wash their cars free ofcharge on Veterans Day, November 11, atparticipating 7-Eleven stores that operatecar washes. The free car washes were avail-able from 12:01 a.m. until 11:59 p.m. Thiswas the third year 7-Eleven has offered freecar washes on Veteran’s Day for retired and

active military personnel of any branch ofthe U.S. Armed Services. SEI operates morethan 300 car washes in 16 states—Califor-nia, Colorado, Florida, Illinois, Kansas,Michigan, North Carolina, Nevada, Ohio,Oregon, Pennsylvania, South Carolina,Texas, Utah, Virginia and Wisconsin.

7-ELEVEN URGES CUSTOMERSTO 'GO BANANAS' SEI recently joined the FeedingAmerica network of food banks in a pay-it-forward campaign to buy bananas forfood-insecure individuals and families inthe U.S. To participate, 7-Eleven cus-tomers purchased two Del Monte ba-nanas for $1, which were donated toFeeding America and distributed throughits network of local food banks to familiesin need. For every two bananas donatedby a customer, 7-Eleven contributed anadditional dime for the Feeding Americanetwork, up to$100,000. The campaignran from November 6 through December2. Customers who made a contribution attheir local 7-Eleven store were also invitedto sign a holiday donation recognitioncard that was displayed in the store duringthe campaign.

FRANCHISE GIVEAWAY FORU.S. MILITARY VETERANS SEI started enlisting U.S. militaryveterans on Veteran's Day, November 11for Operation: Take Command, the com-pany's first franchise giveaway contest.The winner will receive a waiver of thefranchise fee, valued at up to $190,000, tofranchise any 7-Eleven store available inthe continental U.S. at the contest's cul-mination. Interested veterans who arefirst-time 7-Eleven franchise applicantscan enter online at www.VeteransFran-chiseGiveaway.com through January 25,2015. The winner will be announced inApril 2015. The Operation: Take Commandfranchise giveaway is a multi-phasedcompetition that includes meeting 7-Eleven's franchising qualifications, in-terviews, a Facebook video contest by10 preliminary finalists, and an inter-view with 7-Eleven President and CEOJoe DePinto for the three finalists. Thecompetition is for first-time prospectivefranchisees, those veterans who do notalready franchise a 7-Eleven store.

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Mars Chocolate North America recently announced a wide rangeof new products that will hit store shelves in the coming months,and two of the items are back by popular demand. Fan favoritesM&M'S Brand Crispy Chocolate Candies and SNICKERS Xtreme Barwill join newcomers 3 MUSKETEERS Mint Bites, COMBOS Baked

Snacks in two sweet and salty flavors, DOVE Whole Fruit Dipped InDark Chocolate, TWIX Creamy Peanut Butter Cookie Bars and fes-tive seasonal shapes. Mars Chocolate unveiled these innovations,along with merchandising tools for the convenience store industry,at the NACS Show in Las Vegas in early October.

New Mars Chocolate Products To Jolt Your Sales

• M&M'S Brand Crispy Chocolate Candies, a limited edition in1998, feature a unique, crispy center covered in creamy milkchocolate, enclosed in a colorful candy shell. Available in January2015 in 1.35 oz. single, 2.83 oz. Sharing Size, 9.9 oz. bag.

• SNICKERS Xtreme Bar lives up to its name, with50 percent more caramel and 14 percent morepeanuts than the original SNICKERS Bar. A limitededition in 2010, the bar offers a single layer ofcrunchy roasted peanuts and smooth caramel,enrobed in milk chocolate. Available in De-cember 2014 in 3.59 oz. 2 To Go Bars.

• 3 MUSKETEERS Mint Bites are bite-sizedtreats featuring refreshing mint-flavored fluffy nougat en-robed in silky dark chocolate. (December 2014, 2.83 oz. Shar-ing Size and 6.0 oz. Stand-Up Pouch)

• COMBOS Baked Snacks Sweet &Salty Caramel Creme Pretzel deliv-ers the nostalgic taste of caramelcreme candy and a salty pretzel crunch. Availablein November 2014, 6.0 oz. bag.

• COMBOS Baked Snacks Sweet & Salty VanillaFrosting Pretzel takes the cake by bringing to-gether the flavors of salty pretzels and vanilla frost-ing. Available in November 2014, 6.0 oz. bag.

• DOVE Whole Fruit Dipped in DarkChocolate is a delicious combinationof real fruit dipped in silky smoothDOVE Dark Chocolate. Available inSeptember 2014: Cranberry and Blue-berry in 6 oz. Stand-Up Pouches; Jan-uary 2015: Cherry in 6.0 oz. SUP andCranberry and Blueberry in 2.83ounce Sharing Size bags.

• TWIX Creamy Peanut Butter Cookie Bars unite alayer of savory peanut butter on a classic TWIXCookie Bar, all coated with delicious milk chocolate.The new recipe includes a traditional crunchy TWIX Cookie Bar in-

stead of a chocolate cookie. Available in January 2015 in 1.68 oz.package of two bars, 2.80 oz. 4 To Go.

• Seasonal Shapes in singles and 2 To Go formats make snackingmore festive. Shapes include TWIX Brand Ghosts, Santas, Hearts and

Eggs, as well as SNICKERS Brand Pumpkins, Nutcrackers,Hearts and Eggs.

Seasonal confectionery sales continue to increaseas consumers celebrate the holidays with their favoritebrands in themed packaging and shapes. The companynotes that holidays are the perfect time to add shippers

and other secondary displays around thestore. In fact, displays help drive salesyear-round, as 83 percent of all chocolatecandy purchases are on impulse, accord-ing to the 2012 Candy Category Reportby Point of Purchase Advertising Interna-

tional.Mars offers retailers several display op-

tions, from traditional counter units and ship-pers to a new Mixed Singles Skinny Towerthat requires minimal floor space. Conven-ience retailers can sign up for the MarsChocolate Everyday Display Program, whichfeatures themes centered on "key moments"that bring family and friends together. Someof the 2015 moments include: Super Bowl,NASCAR, M&M'S Brand Movie Mania andRoad Trip. A Performance Rewards Programis available to c-stores that incorporate cer-tain Mars products and displays.

Mars also offers retailers a ConvenienceStore Brochure that includes advertising

and consumer promotions, new items, a c-storecalendar and monthly highlights. In addition,

Mars24seven.com provides shopper insights, merchandis-ing options, trends and product photos. Buyers can contact theirMars Chocolate representative for details.

New items from Mars Chocolate include:



Pillsbury Minis Offer Little Bites Of Sweetness On-The-Go General Mills Convenience announces Pillsbury Minis, an excitingnew addition for your packaged bakery set with little bites of sweet-ness from the Pillsbury brand consumers know and love. Pills-bury Minis come in four great-tasting flavors: MiniCinnamon Rolls, Mini Blueberry Muffins withStreusel, Mini Cinnamon Crumb Cake and MiniChocolate Chip Muffins. The bite-size, bakery stylegoodies come in packages of four with a sug-gested retail price of $2.29.

Pillsbury Minis are easy to eat on-the-go, mak-ing them a great option for busy consumers, partic-ularly at breakfast when they are most likely to belooking to fulfill a sweet craving with a convenient

and portable so-lution. The minisoffer premium qual-ity and homemade taste withno trans fats.

The new item is sure tostand out in the packaged bak-ery aisle with its clear, re-seal-

able packaging that lets theproduct quality shine. With its long-standing

reputation for great taste and its strong brandawareness, Pillsbury addresses consumer and re-

tailer needs with a fresher breakfast option designed to satisfy sweetcravings on the go.

Bigger Is Better With The New Kayak Man Can

Swisher International proves that over-sized can still be convenient with its newKayak Man Can. The newly designed packag-ing contains 12 regular-sized cans worth ofquality moist snuff tobacco and fits perfectly ina cup holder, so adult consumers can conve-niently take it in the car, truck or boat.

The Kayak Man Can includes a refillable1.2-ounce can, providing customers with theequivalent of 12 cans for the price of 11. It isavailable in Long-Cut Wintergreen, Long-Cut

Straight, and Fine-Cut Natural blends. This is one“oversize load” that’s perfect on the go!

For retailers, eight Kayak Man Cans come in each case. Orderthrough McLane today or for more information, contact your Swisherrepresentative at 1-800-874-9720.

Germwarrior Offers Germ Protection In One Easy Sniff Boca Health Remedies, Inc. introducesGermWarrior, a homeopathic nasal inhaler thatharnesses the power of lemon balm and essential

oils to effectively fight airborne germs, boostimmune defenses and temporarily relievesymptoms of the common cold. In vitro labo-ratory testing has shown that this propri-etary blend of all-natural ingredients iseffective in inhibiting commonly encoun-tered airborne germs with just a quicksniff instead of the hassle associatedwith other germ-fighting remedies thatrequire mixing or taking with water.

Portable, affordable and fast acting, GermWarrior is perfectfor use anytime, anywhere, whether the user is on the go or incrowded public spaces like planes, trains, schools, offices and hos-pitals. The inhalant can be used up to six times per day, and eachGermWarrior inhaler contains a minimum of 40 applications.GermWarrior has a suggested retail price of $6.99. For more in-formation, visit www.germwarrior.com or call 888-944-GERM.


ROCKIN’ REFUELSALTED CARAMEL HASTHE MUSCLE TO SELL Shamrock Farms has unveiled a new Rockin’ RefuelMuscle Builder flavor: Salted Caramel. The new flavor ismade with real milk, is lactose free, is low in carbs andsugar, contains 30 grams of high quality protein andonly 190 calories, and has up to 100 days refrigeratedcode life. The salted caramel trend is not a fad—sincegaining popularity in 2008, it has become a main-stream flavor. Order through McLane or call 1-800-456-3247 for more information.

Swisher’s Kayak Man Can fits in automobile cup holders.

Pillsbury Minis are aneasy-to-eat on-the-go

breakfast option.

GermWarrior fights airbornegerms and helps boost the

immune defenses.


Kellogg Unveils Special K ProteinInspired Café Shakes Special K Protein Café-Inspired Shakes combine everything c-store customers love about coffee, plus 10 grams protein, 5 gramsfiber and 5 grams fat per serving to keep them full in the morning.With as much caffeine as a cup of coffee (a 5.5 oz. cup of drip-brewed coffee and Special K Protein Cafe-Inspired Shakes bothhave 65 mg of caffeine), these portable shakes are available in twocreamy flavors: Dark Chocolate Mocha and Vanilla Cappuccino.The product is packed four 10 oz. bottles to a carton, with 6 car-tons per case, for a total of 24 bottles per case. For more informa-tion, call 877-511-5777 or visit www.kelloggsconvenience.com.

Tecate Diablo LandsIn U.S. StoresTecate—the one and only authentic Cerveza

“con Caracter”—announced the introductionof Tecate Diablo, a bold Mexican beer mixbased on the authentic Michelada recipe ofbeer, tomato juice, lime, salt, chili pepper,and other spices. Diablo leverages the grow-ing popularity of tomato-based beer mixesand Tecate’s position as the authentic Mexi-can beer brand that offers a bolder, moreauthentic taste verses the competition.

Tecate Diabloleverages the growingpopularity of tomato-based beer mixes.

Special K ProteinCafé Shakes—

drinkable nutritionfor coffee lovers.

Rocky Mountain FOA

Charity Golf TournamentColorado Country ClubCheyenne Mountain ResortColorado Springs, ColoradoAugust 5, 2015Phone 710-233-9758

Rocky Mountain FOA Trade ShowHotel EleganteColorado Springs, ColoradoAugust 6, 2015Phone 710-233-9758


Golf TournamentTPC ValenciaValencia, CaliforniaSeptember 14, 2015Phone: 626-256-1264

FOA Chicagoland

Holiday Party & Trade ShowNovember 6, 2015Phone: 847-971-9457

FOA Greater LA Holiday PartyDecember, 2015Phone: 619-726-9016

Central Fla FOA Holiday PartyDecember, 2015Phone: 407-683-2692

foa events

7-Eleven FOACPhone: 312-944-5392 January 22, 2015February 19, 2015March 19, 2015—General MeetingApril 23, 2015May 14, 2015June 18, 2015August 20, 2015September 17, 2015October 22, 2015—General MeetingNovember 19, 2015December 17, 2015

FOA Of Greater LAPhone: 951-766-7490 January 13, 2015February 17, 2015March 17, 2015April 21, 2015—w/Mini Trade Show

May 19, 2015June 16, 2015August 18, 2015—w/Mini Trade ShowSeptember 15, 2015October 20, 2015November 17, 2015—w/Mini Trade ShowDecember 2015—No Meeting

Central Florida FOAPhone: 407-683-2692January 15, 2015—Board Meeting OrlandoFebruary 5, 2015—General Meeting LakelandApril 23, 2015—Board Meeting LakelandMay 21, 2015—General Meeting OrlandoJuly 16, 2015—Board Meeting OrlandoAugust 20, 2015—General Meeting LakelandOctober 22, 2015—Board Meeting LakelandNovember 19, 2015—General Meeting Orlando

FOA Board Meeti ng Dates

7-Eleven Inc.....................78-79Anheuser Busch....................19Aon Risk Services ..................38Coca-Cola.......................cover 2Don Miguel ...........................48Dr Pepper Snapple Group .....32Duracell.................................51Ferrero...................................17General Mills.........................82Green Dot..............................75Heineken...............................10Hershey.................................23Hot 'N Spicy...........................35Insight Beverages .................36Just Born...............................63Kellogg's .................................6Kretek Int’l ...............59, cover 4Lewer Insurance....................66Logic Ecig.........................44-45

Mars Chocolate....................8-9Mars Ice Cream .....................21Maruchan..............................31McLane .................................39Mondelez................................5National Tobacco...................42Nestle Confections ................52Nestle Waters........................26Perfetti Van Mele ..................25Shamrock..............................30Sprint ....................................47Sunny-D................................28Swedish Match ..................7,69Swisher International ......15,71Unilever Good Humor/Breyers..........................................3,4,55Whitewave Foods .................13Wrigley ..........................cover 3Windsor ................................40

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Want your event listed here? Sendemail with event name, location,dates and contact phone and emailto [email protected]

FOAGLA & San Diego FOA

Trade Show VendorAppreciation ReceptionPechanga Resort and CasinoTemecula, CaliforniaJanuary 20, 2015Phone: 619-726-9016

FOA Of Greater Los

Angeles & San Diego FOA

Trade ShowPechanga Resort and CasinoTemecula, CaliforniaJanuary 21, 2015Phone: 619-726-9016

Central Florida FOA

Golf TournamentOrange County National Golf CenterWinter Garden, FloridaMarch 4, 2015Phone: 407-683-2692

Central Florida FOA

Trade ShowOrlando World Center MarriottOrlando, FloridaMarch 5, 2015Phone: 407-683-2692

Tristate FOSE

Trade Show Martin’s WestBaltimore, MarylandMarch 25, 2015Phone: 301-572-6811

Virginia FOA

Trade ShowHilton SpringfieldSpringfield, VirginiaMarch 26, 2015Phone: 540-270-7934

Metro New Jersey FOA

Trade ShowTropicana HotelAtlantic City, New JerseyApril 9, 2015Phone: 908-232-1336

San Francisco/Monterey BayFOA

The Guardian Trade ShowSanta Clara MarriottSanta Clara, CaliforniaApril 11, 2015Phone: 510-754-1113

Eastern Virginia FOA

Patriot Zone Trade ShowHilton Garden InnSuffolk, VirginiaApril 20, 2015Phone: 757-506-5926

Southern Nevada/Las Vegas FOA Trade Show & Charity Golf Tournament(location to be announced)April 22-23, 2015Phone: 702-249-3301

Columbia Pacific FOA

Annual Trade ShowDoubletree Lloyd CenterPortland, OregonApril 24, 2015Phone: 503-984-1398

Chesapeake Bay FOA

Trade Show(location to be announced)April 30, 2015Phone: 757-650-2929


Trade ShowPasadena Convention CenterPasadena, CaliforniaMay 21, 2015Phone: 626-256-1264

FOA Of Greater LA

Golf Tournament(date & location to be announced)June, 2015Phone: 619-726-9016

7-Eleven FOAC

Family Picnic(location to be announced)June 13, 2015Phone: 847-971-9457

7-Eleven FOAC

Charity Golf Tournament(date & location to be announced)July, 2015Phone: 847-971-9457

foa events

National Coalition

Affiliate MeetingHilton SandestinSandestin, FloridaFebruary 16-17, 2015

National Coalition

Board of Directors MeetingHilton SandestinSandestin, FloridaFebruary 18-19, 2015

NCASEF 40th Annual Convention & Trade Show In Cooperation With The Chicago FOASheraton Chicago Hotel and TowersChicago, IllinoisJuly 27-31, 2015Trade Show: July 30-31, 2015

NCASEFboardmeetings



Avanti November/December 2014

Documents

Transcript of Avanti November/December 2014