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y w a d li Sho ty 8 o H de ar ber Traand PNovem ay, THE KEY TO YOUR SUCCESSth ! ur s h T d 7-ELEVEN FRANCHISE OWNERS ASSOCIATION OF CHICAGOLAND November 2012 AGAIN! Missed Opportunity – By Hashim Syed, FOAC Board Member Yes, once again, SEI has blown it. What could have been an opportunity for SEI to showcase 7-Eleven in all its glory with the opening of a very prominent store in the city of Chicago; has instead showcased SEI’s repeated pattern of missed opportunities. I was invited to attend the grand opening by my FC, along with fellow FOAC board member Liaqat Ali. While we were both very impressed with the size of Why does SEI continue to make the same mistakes over and over again? Subway, and a Honey Baked Ham restaurant located within the same strip center as this brand new 7-Eleven. What could SEI’s planners and demographic experts be thinking? this new 7-Eleven (probably the largest in the city); I couldn’t help but shake my head in disappointment. Why does SEI continue to make the same mistakes over and over again? What mistakes? Please allow me to explain. www.7-elevenfoac.com Telephone: 312-501-4337 Fax Number: 877-387-FOAC (3622) Email: [email protected] Please call the FOAC Hotline with any problems that require immediate assistance: 312-253-7342 Direct Competition The new 7-Eleven is located in an area surrounded by direct competition that will negatively impact the store’s sales of coffee, fresh food, hot food, and snacks. Not only is there a Jewel grocery store less than a block away, but there is also a McDonald’s on the corner and a Dunkin Donuts a few steps from there. Even worse, there is a Chipotle, a (Continued on page 5) Congratulations Charlene Brandt! Will You Be Joining Us? Please RSVP Today! RSVP email: [email protected] The FOAC’s Annual Holiday Party & Trade Show is November 8th Please join us for the FOAC’s annual holiday party and trade show, which takes place on Thursday, November 8th in the Grand Ballroom of the Holiday Inn North Shore. Last year’s event was so wellattended, that we had to expand our space to accommodate all of our trade show vendors, our franchisees and their guests. Last month our very own Charlene Brandt was recognized by the City of Chicago with a resolution which was presented to her by the 2nd Ward Alderman Robert W. Fioretti. The resolution applauded Charlene for her dedicated commitment to the community, her many hours of volunteer work, and the support she has shown by participating in numerous special events and city-wide initiatives. Charlene, a Certified Business Consultant and Community Events Coordinator for Market #1914, has been with 7-Eleven for the past 6 years. Accompanying Charlene during the presentation were Bill Engen, SVP – East Operations and Brian Trout, Heartland Zone Manager. Alderman Fioretti is on the far right. Congratulations Charlene! We are very proud of you and are grateful for all you’ve done to help our franchisees and promote 7-Eleven. The event begins with the trade show from 2:00 to 5:30 pm in the ballroom, followed by a cocktail hour in the atrium (5:30 to 6:30 pm). An awards ceremony will take place at 6:45 pm, before dinner and entertainment, which starts at 7:15. “I know that this is a very busy time of year for all of us, but our holiday trade show and party should not be missed,” said Joe Rossi, FOAC president. “With even more vendors than last year, franchisees will enjoy some amazing one-day only specials and money-saving deals,” he says. “We’re looking forward to seeing everyone!” Details at a Glance Date: Thursday, November 8th Time: Trade Show – 2:00 to 5:30 pm Cocktail Hour – 5:30 to 6:30 pm Awards Ceremony – 6:45 pm Dinner – 7:15 pm Entertainment – 8 pm Place: Holiday Inn North Shore 5300 W. Touhy Avenue, Skokie, IL Tickets: Each franchisee will receive two tickets at no charge, but RSVPs are required. Additional tickets are available for $70 each. RSVP: Please RVSP for the holiday party and trade show by visiting the FOAC website at www.7-ElevenFOAC.com (click on CALENDAR of EVENTS). If you have questions or need to order extra tickets, please contact Guliz Sonmez, FOAC Executive Secretary at [email protected] FOAC Newsletter Editorial Contacts Planner/Art Director: Hashim Syed 847-293-8551 [email protected] Editor: Alisa Bay 847-266-9053 [email protected] Graphic Designer: Jacquelyn Aven 630-922-8500 [email protected] Executive Secretary: Guliz Sonmez 847-971-9457 [email protected] The FOAC newsletter is printed by Semper Fi Printing, located in Arlington Heights, IL www.7-elevenfoac.com Telephone: 312-501-4337 Fax Number: 877-387-FOAC (3622) Email: [email protected] Please call the FOAC Hotline with any problems that require immediate assistance: 312-253-7342 Rereading and Weeping Once Again, Store Agreement Leans in By Bob Strauss, FOAC Board Member Franchisees never know what the next franchise store agreement (contract) will look like, but there are a couple of things we can surely bet on; every store agreement will get longer and will give 7-Eleven more. When Dallas introduced the 2004 store agreement, I read it and wrote an article for our newsletter. Many of my Dallas friends told me my comments were reactionary, dark and totally wrong. Several years have passed and it’s a good time to review those words. I titled that 2004 article “Read Some call it corporate It and Weep.” greed. Some call it stealing. I call it abandoning the foundation of our franchise relationship. From the time when I first began my 7-Eleven life back in 1974, there has always been one fundamental guiding light in every version of the store agreement. That was the principle that we, franchisee and 7-Eleven, shared. It was always understood that any financial benefit that a franchisee derived from operating their 7-Eleven store had to be shared with SEI. SEI also had an obligation to share income related to franchise store operations. This was an undeniable given in the 7-Eleven franchise relationship. It’s evident that the new contract throws that principle of ethics and fairness out the window. The very corporation that postured itself as good, fair and honest has just turned things upside down. SEI has exposed itself and dares franchisees to pass judgment. SEI has shattered its illusion of integrity. The new contract rattles off every new franchisee obligation. It lists various additional charges that SEI will hit franchisees with. It manacles franchisee independence. It details clever new ways that SEI can cut another pound of franchisee flesh. In a cruel response to the 7-OFF class action settlement related to SEI receiving rebates, discounts, allowances, equipment and other benefits that weren’t shared with franchisees, the new contract provides gaping backdoor loopholes SEI’s Favor for SEI to receive limitless benefits from vendors that won’t have to be shared with franchisees. In the ultimate act of insult, it details that franchisees can’t be awarded punitive or exemplary damages, even when SEI is proven to be guilty! The new contract rattles off every new franchisee obligation, and lists additional charges that SEI will hit franchisees with. There’s more... SEI will pocket all internet profits. Who is soon going to be paying the credit card fees? What’s about to happen to gas commissions? SEI only has to share base rental income for electronic services. SEI won’t share the massive money it’s already making from the sale of store data to outsiders. SEI even takes full rights and benefits from franchisee suggestions and ideas. God Bless America. If SEI directed their team to craft a mean spirited contract, then the SEI lawyers surely earned their year-end bonuses. The words of the contract tell the franchise world that the game rules have changed. We no longer share. SEI takes and takes whenever and wherever possible. SEI salesmen can smile and say this and that aren’t the intent, but the judges will only read the words, and the meaning of the words could not be any clearer. SEI READ IT AND WEEP! Read it and weep. The Art of Custom Retailing By Bob Strauss, FOAC Board Member It’s no secret that 7-Eleven franchisees have varied backgrounds and customs, but there’s at least one custom shared by all; the custom of going into business to make some money. Making money requires much more than just selling stuff. Good expense control is critical. For many franchisees, the ability to make money from every sales transaction will be the difference between prosperity or a never-ending battle to keep their heads above water. Custom retailing is a method, or mindset that will help most stores make more money. Custom retailing (CR) is a custom we should all share. CR involves determining the cost of products, the consideration of various factors (that will soon be discussed), and selecting an appropriate retail, category by category, item by item. Custom retailing requires time, but as they say, “time is money.” I opened my first store the year that the Vietnam War ended. Back then CR was among many things that were a part of the 7-Eleven system. SEI recognized that CR required several assumptions: 1. Many people are willing to pay a premium for convenience. 2. We sometimes carry an item that no one else in the neighborhood sells or not in that size; we’ll refer to those products as ‘Blind Price Items’. 3. If we can’t get a fair cost on a product, then we should still price it to get a fair profit. If it won’t sell at that retail, then let the supplier know that you won’t carry it. 4. Customers assume that they’ll pay extra in a c-store, so don’t disappoint them. You’ll only be giving money away. As things got more automated, 7-Eleven moved away from encouraging CR. As less stores utilized CR, franchisees began to bring a declining percent of sales to their bottom line. If you can’t make decent money on each transaction, then why are you even carrying that item? If it’s a unique low gross item like newspapers, then you may not have any options, but otherwise there may be little benefit to selling lots of something that makes you little. If it’s a “Blind Price Item” then the retail you assign becomes the recognized retail for it. Nobody in your area carries it, so be sure to make plenty of money from it. Make it one of your focus items too! Here’s an example to help further illustrate how to apply CR. You carry two brands of yogurt. Both brands sell well. Due to cost and SRP, you make 43% on one brand and 31% on the other. That’s a difference of 12 cents profit/sales $. Why not make just as much on both brands? Never say never. Recent increases in SRPs demonstrate that 7-Eleven has begun to again embrace making a fair profit on most transactions. Consider all of the factors and make your CR call. You can use the same method with other items as well. Why not make just as much on both brands? How about candy? You probably make 45% or much more on most candy items. Why should you accept a lower profit on one brand? How about a nutrition bar, soda, juice, water, condom? Apply the CR mindset and before you know it you’ll take back ownership of your store’s bottom line. Does it make sense to CR all items? Absolutely not. So before you go running to your computer to do some custom retailing, please consider the following points. Is it an item that sells well? Making more money on a slow seller won’t contribute much more profit. It’s more critical to focus on strong sellers. Increasing the profit on an item that sells well helps you and 7-Eleven make more money. Does your competition sell or promote that item? Can you afford to be above their retail? How do you think your customers would react? Would they notice? Lucky Winner! If you have questions about Custom Retailing, please email Bob Strauss at [email protected]. Keep Selling Those Tickets... It Could Be YOU! The Illinois Lottery recently presented an oversized bonus check for $10,000 to 7-Eleven store #27070, located at 847 Dodge Avenue in Evanston, Illinois. The lucky store sold a $1 million winning Gold Bullion instant ticket. “I always ask our customers if they want to try their luck with a lottery ticket, and I remind them when the jackpots are high,” said Helen Shamoon, who has owned this 7-Eleven store for 11 years. “A lot of my customers play Gold Bullion,” she adds. “It’s a very popular game and it was exciting to have a winner!” 4 Helen during the check presentation with 7-Eleven Field Consultant Mike Drop. Pabst Teams Up with 7-Eleven for Even Greater Success in 2013 The Pabst Brewing Company is ex- tremely happy with 7-Eleven’s growth of the portfolio in 2012. PBC is now ready to roll out their 2013 Marketing and Promotional Plan to fuel growth at an even higher rate. Pabst Brewing is aligned with 7-Eleven, as “Connecting to the Millennial” is their key strategy to propel growth. Nationally, PBC will be focused on Pabst Blue Ribbon with several exciting events that will engage the consumer through Sports, Art, and Social Media, as well as localization of community supported events. PBR is now in the fourth year of double digit growth, delivering 22% more sales at 7-Eleven in 2013. While Innovation is very important to 7-Eleven, “Re Innovation” of a Brand can add just as much excitement to the store and the category! Regionally, PBC will re-energize the Old Style Brand in 2013. The company will continue to focus on traditional sporting campaigns with the Cubs and Bears. New activities to the Old Style Marketing Plan will include themes on doing things “Chicago Style” as well as product and package innovation. PBC looks forward to continued success with 7-Eleven for both Brands. Thanks again for your continued success, but hold on for a tremendous 2013! FOAC Merchandising Committee Attends NACS FOAC Merchandising Committee members Joe Rossi, Hashim Syed, Bob Strauss and Hetal Patel attended the NACS show in Las Vegas last month. The NACS event (National Association of Convenience Stores) is the largest of its kind, with attendance close to 25,000! “Everybody who was anybody was there,” said Hashim Syed, who along with the other members of the FOAC Merchandising Committee, made many new contacts including vendors who showed an interest in participating in the FOAC’s annual trade show next year. “I highly recommend NACS to my fellow franchisees, as I know they would gain a great deal of knowledge and useful information by attending.” NACS features three days of general sessions, 50+ educational sessions, networking opportunities, and a trade show. The 2013 NACS Show will take place October 12th through the 15th in Atlanta. Highlights from the 2012 NACS Show and information on the 2013 NACS Show can be found at nacsshow.com. Missed Opportunity (continued from page 1) Lack of Design What would have made a difference and given this 7-Eleven a fighting chance for survival would have been a modern, updated design – something that would have captured the audience that we know should be ours (the teenagers, the young urban professionals “yuppies” and females). Instead, SEI chose to stick to its old, tired, “cookiecutter” approach to store design. Again, I ask, what are they thinking? Why not consider bringing an expert on board? An interior designer would know exactly what to do to create a look that would be inviting, welcoming, exciting and current. Perhaps SEI should look at Walgreens as an example of good store design. Beautiful new Walgreens stores are being built all over Chicagoland, many of which are close to 7-Eleven stores. If you had a choice between a big, brightly lit, Walgreens or one of our 7-Elevens, which would you choose? Wake-up, SEI! We’re losing customers! Profitability? Wake-up, SEI! We’re losing customers! Thankfully, this store is company owned so a franchisee isn’t faced with an uphill battle trying to make money. With competitive businesses in the immediate area and a design that lacks any sort of excitement or creativity, I can’t imagine this store turning a profit. Also, due to its large size, it will require double the amount of coverage by employees in order to properly maintain it. I only hope that SEI realizes what they’ve done and the mistakes that have been made, and will keep it running under their own management. Save theDATES! FOAC Monthly Board Meetings ✔ Thursday, November 15th* ✔ Thursday, December 13th ✔ Thursday, January 24th ✔ Thursday, February 28th Holiday Inn North Shore 5300 W. Touhy Avenue - Skokie, Illinois 10:00 am – 4:00 pm • Lunch will be served. FOAC Holiday Trade Show and Party ✔ Thursday, November 8th All 7-Eleven franchisees are invited to attend our monthly board meetings and to join us for lunch. As always, a variety of pertinent topics will be discussed and you will have an opportunity to network with top vendors, those from the 7-Eleven corporate office, and other 7-Eleven franchisees. These meetings are very informative and will bring you up to date with the latest 7-Eleven news, so please do your best to attend. FOAC membership is not required in order for you to join us, but you must RSVP to Guliz Sonmez at [email protected]. Please be sure to RSVP! Come see for yourself what the FOAC is all about and learn what we are doing to support each other’s goals and objectives. Board meetings are also a forum where you can express any concerns you may have about your store. We look forward to seeing you! *PLEASE TAKE NOTE: The November 15th board meeting will take place at the Red Bull North America headquarters, located at 181 N. Wacker Drive in Chicago. Details coming soon via E-Alert. New Product Holiday Inn North Shore 5300 W. Touhy Avenue • Skokie, Illinois Festivities begin at 2:00 pm. See details on page 2 of this newsletter. Looking Ahead Upcoming General Meetings Times and Locations to be Announced ✔ Thursday, January 17, 2013 ✔ Thursday, April 4, 2013 ✔ Thursday, June 13, 1013 ✔ Thursday, September 12, 2013 Improves Accuracy in Police Roadside Breath Testing The Breathalyzer Equalizer is a revolutionary product that was professionally formulated by McCoy Moretz, MD FACS, to deal forthrightly with a problem affecting citizens throughout the world, called Residual Mouth Alcohol. Mouth Alcohol has nothing to do with one’s true Blood Alcohol Concentration (BAC) and can produce an elevated false reading on hand held roadside breath testing devices, currently used by police in the field. The Breathalyzer Equalizer is made of all natural food grade ingredients, which absorbs only the Residual Mouth Alcohol that can produce a false positive breath test result on these roadside devices, which could potentially lead to a false DUI arrest or unnecessary detainment. There’s more than one way to flunk a roadside police breathalyzer test. The first way, of course, is to be drunk. But, even if you’re NOT intoxicated after a single alcoholic beverage, the residual alcohol in your mouth can cause you to register over-the-legal limit on a police roadside breath test. Even certain mouthwashes, breath freshening sprays, asthma inhalers or other medications can trigger a false positive, putting you over the legal limit, when you’re NOT intoxicated. That’s why there’s Breathalyzer Equalizer. It WILL NOT sober you up and it WILL NOT help you avoid a DUI if you’re truly intoxicated. But, it will help ensure a more truthful and more accurate breathalyzer reading, if stopped by the police and given a breath test, when sober. The system is not perfect, and until breath testing devices are flawless, our team offers you The Breathalyzer Equalizer. Breathalyzer Equalizer is an EASY-TO-USE, EFFECTIVE powder that helps innocent people avoid being arrested for DUI when sober. 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