Realignment Draws Concerns Among 7-Eleven Franchisees
Business Focus - Jun 23,2011
DALLAS -- Three months into 7-Eleven Inc.'s realignment initiative, the National Coalition of Associations of 7-Eleven Franchisees (NCASEF) is raising some questions.
According to a notice posted on the association's website, everything will be run out of 7-Eleven corporate headquarters in Dallas as part of the company's efforts to streamline operations. Joe Galea, NCASEF executive vice chairman, acknowledged the idea makes sense; however, the move has drawn some concern about the accounting and merchandising sides of the plan.
In March, it was reported that the c-store chain was restructuring. Among other things, the plans call for closing all eight regional divisions in favor of creating 14 geographic zones; overhauling its merchandising and marketing command structure; reducing the number of corporate positions; and standardizing and centralizing merchandising policies.
At the time, Margaret Chabris, of 7-Eleven's public relations department, told CSNews Online that the retailer has been evolving over time. "7-Eleven Inc. has been transforming its business for the past several years to better serve our stores and our stores' guests. We have made significant progress in many areas and now are moving into the next phase that will better position our field operations team to work more closely with our stores. The changes we are making also will centralize support functions to create more effective and efficient programs and processes," she said.
"All of the changes that are taking place over the next few months are made to deliver convenience without compromise, to create a better experience for our store guests and provide them with the products they want and the quality and value they expect. While there will be some loss of positions as we consolidate field offices, we are adding new roles, creating new opportunities and inviting those whose jobs are affected to apply for these new positions."
Recently though, NCASEF gave voice to the concerns of its members. For example, Galea said licenses, which are renewed annually, were previously sent to local market offices and then passed along to franchisees. Under the realignment, the licenses will be sent to Dallas and franchisees are afraid they will be responsible for letting the company know when licenses are due, Galea wrote in his website post. "There is a feeling among store owners that, since [7-Eleven Inc.] headquarters is so far away, there needs to be a policy in place to ensure these licenses are being processed in a timely manner," he said.
The association also recommended that since the company is implementing changes, it should address a concern franchisees have had for years: mail. More specifically, the fact that mail for particular stores currently gets routed through headquarters before it's funneled to the stores. This can lead to problems, especially if the mail is timely in nature, Galea said. It would be more efficient if the reorganization included a plan for mail to go directly to individual stores, he added.
As far as merchandising concerns, Galea stated that consolidating all the buyers in Dallas will limit opportunities for new vendors to approach 7-Eleven corporate. "Merchandising is our key and our backbone, and we have always been very fortunate to have regional vendors that supply us with products we need," he wrote. "This opportunity needs to exist because, geographically, every store is not set up the same and many are out of delivery areas for [combined distribution centers]."
He suggested that franchise owners associations (FOA) contact local vendors, invite them to board meetings and work with them to try and get their items into the FOA member stores. The results of the test launches would then be sent to corporate headquarters, allowing the vendor the chance to become a recommended corporate vendor.