Franchisees of 7-Eleven are asking the c-store chain to drop its requirement that stores operate around the clock—a signature of the brand—because they can’t find enough workers to staff the overnight shifts.
Complicating the problem, according to the operators, are the brand’s effort to become more like a quick-service restaurant by offering freshly prepared grab-and-go foods. That initiative has increased stores’ need for labor, according to a letter from the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), an umbrella group of 14 local operator organizations.
“7-Eleven wants to be a place that customers think of for fresh food, but our Franchise Agreement is based on a convenience store model, not a quick-service restaurant m"odel,” Jas Dhillon, a Los Angeles area franchisee and treasurer of NCASEF, said in a statement from the group.
The organization is using the 24-hour requirement as a springboard for requesting more leniency overall in 7-Eleven’s contracts with franchisees.
“We are already feeling the squeeze,” NCASEF Executive Vice Chairman Michael Jorgensen said in the group’s statement. “As labor and other direct store operating expenses keep increasing, franchisees are earning less and working more,”
The franchisor, 7-Eleven Inc. (SEI), said in response, “7-Eleven remains focused on supporting and promoting franchisee profitability, safety, and success. Since the start of the pandemic last year, 7-Eleven has provided Franchisees with more than $173.5 million in investment, savings, and support as they own and operate essential businesses on the front lines of their communities."
The requirement to remain open for 24 hours was suspended for franchisees during the pandemic, when many states and local jurisdictions imposed curfews to encourage people to stay home and avoid unnecessary interactions. SEI intends to reimpose the requirement on May 24, according to the NCASEF.
“Because of today’s extremely tight labor market, many franchisees will struggle to safely maintain a 24-hour schedule, and the company needs to acknowledge that,” Jorgensen said.
According to the NCASEF, many franchisees project that their overnight sales will barely cover the higher wages they’ll need to pay to staff the graveyard shifts.
"Going back to March 2020, 7-Eleven has engaged and worked closely with many franchisee leaders to support all Franchisees’ efforts to attract new store employees," SEI countered. "These varied efforts have led to 50,000 new store employees hired by Franchisees or 7-Eleven, Inc. We continue to make this support available to this day."
The requests to waive the overnight service requirement and provide more leeway in the standard franchise contract are the latest indications of friction between the chain and its franchisees. In 2017, franchisee groups threatened to boycott the chain’s annual conference because of conflict with the home office.
7-Eleven is the largest franchise chain within the c-store business. The chain announced last week that it intends to step up a program of including a restaurant operation within its c-stores.