Franchisees File Major Lawsuit Against SEI Page 18

September/October 2017 T H E V O ICE OF 7-ELEVEN FRANCHISEES

FLORIDA FRANCHISEES HAND OUT FREE WATER AFTER HURRICANE

Page 21 IRMA

PERMIT No. 85 No. PERMIT Page 30

Philadelphia, PA Philadelphia,

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T H E V O I C E O F 7 -ELEVEN FRANCHISEES September/October 2017 Contents 35 Fixing Some Of Our 45 Protecting The Operational Issues Brand And By Joe Galea, Chairman, NCASEF Franchisees By Pete Gragnano, President, 37 Franchisees Proclaim: Suburban Washington FOA Enough Is Enough! By Eric H. Karp, Esq., General Counsel, NCASEF 58 Let’s Just Listen! 41 A Less Than Smooth By Hari Patel, President, Jay Patel, Vice President, Conversion To Mital Patel, Board Member, Ketan Patel, Board Member, Metro New Jersey FOA ExxonMobil Gas By Rehan Hashmi, Vice Chairman, 53 The Graduated Gross Profit Vice President Alliance of 7-Eleven Franchisees Split Agreement: Where It 51 Overcoming Our Hot Foods Challenges Came From And Why It By Romy Singh, Vice Chairman, NCASEF | President, Eastern Virginia FOA Must Go! Features By John Irvine, Franchisee, Metro Detroit 18 Franchisees File Major Lawsuit Against SEI 22 San Diego FOA At The Del Mar Races Member News ...... 18 San Diego Bits & Pieces...... 20 FOA Vendor DEPARTMENTSLegislative Appreciation Update...... 24 Party 28 Ad Index...... 80 SEI News...... 83 30 Florida Franchisees Hand Out Free Water After Irma Vendor Focus...87

AVANTI is published by the National Coalition of Associations of 7-Eleven Fran- chisees for all independent franchisees, corporate store managers and interested parties. National Coalition offices are located at 740 Front Street, Suite 170, Santa Cruz, CA 95060. For membership information, call 831-426-4711 or e-mail [email protected]. AVANTI Offices are located at 116 Bellevue Ave., Suite 304, Langhorne, Pennsylvania 19047. For advertising information, call Sheldon Smith at 215 750-0178 or fax to 215 750-0399; on-line, send messages to shel- Franchisee Calendars...... 90 [email protected].

AVANTI SEPTEMBER | OCTOBER 2017 15

NATIONAL COALITION OF ASSOCIATIONS OF 7-ELEVEN FRANCHISEES NATIONAL OFFICERS Joseph Galea NATIONAL CHAIRMAN brand through its website. It put about 831-426-4711 • [email protected] Amazon Cuts Whole Foods 2,000 private-label products on the site Jatinder Singh after the deal closed and sold out of al- EXECUTIVE VICE CHAIRMAN Prices & Attracts More most all of them, according to One Click 702-249-3301 • [email protected] Shoppers Retail. The company said web sales of Eric H. Karp, Esq. Whole Foods branded items through GENERAL COUNSEL Amazon totaled $500,000 in the first 617-423-7250 • [email protected] week. The article states that cutting prices Nick Bhullar at the chain with such an entrenched rep- VICE CHAIRMAN 626-255-8555 • [email protected] Amazon spent its first day as the utation for high cost that its nickname is Rehan Hashmi owner of grocery chain Whole Foods Whole Paycheck is a sign that Amazon is VICE CHAIRMAN Market cutting prices as much as 43 per- serious about taking on competitors such 847-845-8477 • [email protected] as Wal-Mart Stores Inc., Kroger Co. and cent, reported Bloomberg. The e-com- Romy Singh Costco Wholesale Corp. merce giant closed its $13.7 billion VICE CHAIRMAN acquisition on August 28, and by Septem- continued on page 20 757-506-5926 • [email protected] ber 11 the strategy helped boost Michael Jorgensen customer traffic in Whole “Web sales of Whole Foods TREASURER Foods stores by 25 percent. 347-251-1828 • [email protected] So far, Amazon has had branded items through Amazon CONVENTION CHAIRPERSON success selling the Whole totaled $500,000 in the first week.” 520-577-8711 [email protected] Foods 365 Everyday Value John Riggio MEETING/TRADE SHOW COORDINATOR 262-275-3086 • [email protected] Franchisees File Major Lawsuit Against SEI Sheldon Smith AVANTI PUBLISHER The National Coalition of Associations of 7-Eleven Franchisees has announced the filing of a ADVERTISING MANAGER lawsuit against its parent company, 7-Eleven, Inc., because the franchisor has not fulfilled its prom- 215-750-0178 • [email protected] ise of treating franchisees as independent contractors and business owners. The suit, filed in U.S. District Court for the Central District of California on October 12, challenges certain provisions of the 7-Eleven Franchise Agreement, and seeks monetary damages, attorney’s fees and costs and other relief for claims relating to unpaid overtime wages and unreimbursed expenses. Franchisees have long complained that the brand has been chipping away at their profits, increasing their costs, and exercising more control over what is supposed to be an independent opera- Sheldon Smith tion. National Coalition Executive Vice Chairman Jay Singh said conditions imposed by the franchisor PUBLISHER&ADVERTISING SALES are threatening these businesses, many of which are family operations. “Many of our members have 215 750-0178 operated 7-Eleven franchises for decades and are gravely concerned not only for their future, but the [email protected] future of the brand they love and have invested so much in.” John Santiago Members point to increasing management control by 7-Eleven, Inc., including, but not limited to: ASSISTANT EDITOR 215 750-0178 • Taking away the opportunity of franchisees to possess and/or control monies generated from [email protected] franchised stores; Tricia Kessler • Directing franchisees to sell any good or service for less than the cost of acquiring and selling GRAPHIC DESIGN the same; KESSLER DIGITAL DESIGN • Requiring franchisees to use equipment 7-Eleven specifies to operate franchise stores; • Imposing a regressive royalty structure that penalizes franchisees for increasing sales; and The Voice of 7-Eleven Franchisees September/October 2017 • Transferring responsibility for paying credit card processing fees directly to franchisees. ©2017 National Coalition of Mr. Singh stated, “We need to hold 7-Eleven accountable. We love this brand and are saddened by Associations of 7-Eleven Franchisees the way they have been treating the people who are the very heart and soul of the company.” Avanti Magazine is the registered trademark of The National Coalition of Associations of 7-Eleven Franchisees.

18 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 18

Target To Raise Its Minimum Wage To $11 Per Hour Target said it will start raising its minimum wage in October from $10 Whole Foods just added a new feature to one an hour to $11 for all its U.S. stores, re- of its new stores in New York City—a pro- ported CNBC. The retailer also com- “Pilot Flying J employs 27,000 duce butcher, reported Yahoo News. The mitted to boosting its minimum wage people and is the 15th-largest butcher can chop, dice, and mince any veg- to $15 per hour by 2020. Target said the private company in the etables according to the customer’s prefer- wage increases will also apply to the ence and then package them up so they're 100,000 temporary workers that the re- United States, with annual completely ready for cooking. • 7-Eleven tailer plans to hire ahead of the holi- sales of about $19.6 billion.” Canada hosted its fourth annual Slurpee days. Target has declined to comment Name Your Price Day on September 15, rais- on how many of the roughly 323,000 boost its stake in the company to 80 per- ing funds for WE Charity, an organization that empowers people to make a difference employees at its more than 1,800 stores cent in 2023. The Haslam family led by through domestic and international change. • will be receiving the pay increases. The billionaire Jimmy Haslam, who also con- C-store chain Wawa is currently testing a de- trols the Cleveland Browns football company has emphasized that it wants livery service with GrubHub at four locations team, will keep a 50.1 percent stake and to “recruit and retain strong team in Pennsylvania, reported CSNews Online. The members.” the Maggelet family’s FJ Management service requires a $10 minimum order and a Inc will retain 11.3 percent ownership $1.99 delivery fee. Wawa said the service will until then. be available at more locations in the future. • Berkshire Hathaway Buys Pilot Flying J has more than 750 lo- In its first quarter of fiscal year 2018 report, Into Pilot Flying J cations in 44 U.S. states and Canada Alimentation Couche-Tard announced it plans selling gas, diesel fuel, and convenience to divest 200 stores that do not meet the Warren Buffett’s Berkshire Hath- goods, and offering trucks more than company’s profitability standards. • The U.S. away Inc. recently bought a major 70,000 parking spaces and 5,000 diesel House of Representatives recently passed the stake in Pilot Flying J, the largest U.S. lanes. It employs more than 27,000 peo- SELF DRIVE Act to expedite the introduction truck stop operator, and said it plans ple and is the 15th-largest private com- of autonomous cars, which could help seniors to become majority owner in six years, pany in the United States, with annual and those with disabilities live more inde- reported Reuters. Berkshire acquired pendently as a primary benefit of self-driving sales of about $19.6 billion. a 38.6-percent stake of Pilot Flying J vehicles, reported Yahoo Finance. • With more for an undisclosed price, and plans to continued on page 22 than 130 locations under agreements for new-store construction,Casey’s General Stores expects to open its 2,000th convenience store before the end of the year, re- The National Coalition Office ported CSP Daily News. • McLane Co. The strength of an independent trade association lies celebrated the 25th anniversary of its private label line Consumer Value Products during in its ability to promote, protect and advance the best its annual trade show in September. • A new interests of its members, something no single member 740 Front Street, Suite 170 report by eMarketer estimates the value of or advisory group can achieve. The independent trade Santa Cruz, CA 95060 U.S. mobile payment transactions will total association can create a better understanding between Office 831-426-4711 $49.29 billion in 2017, or up 78.1 percent its members and those with whom it deals. National Fax 831-426-4713 from last year.The growth rate of the online Coalition offices are located in Santa Cruz, California. E-mail: [email protected] payments market is projected to remain in continued on page 38

20 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 20

grocery orders. Construction on the Café, in- Hy-Vee To Test New mini grocery stores could begin this store Star- year, pending city approval. bucks and in-store Pizza Hut locations. C-Store-Grocer Hybrid Under the new agreement, Vixxo will be Hy-Vee is looking to test a new con- responsible for 24/7/365 maintenance cept in Iowa that combines a large-for- Vixxo Expands and repair of food service equipment, mat convenience store and a small- Partnership With Target reverse osmosis water systems and format grocer, reported the Des Moines Facility management company plumbing and electrical components Register. The two proposed Hy-Vee Fast Vixxo recently announced that it has within Target's food prep and service & Fresh stores would include a selection expanded its relationship with Target areas. Vixxo was first introduced to Tar- of groceries and fresh prepared foods, a Corporation to include managing many get through its longstanding partner- Hy-Vee Market Grille Express, a Star- of Target's full food production equip- ship with Starbucks. bucks coffee shop drive-thru, fuel sta- ment. This includes a number of Target continued on page 28 tions, and a place to pick up online

SAN DIEGO FOA AT THE DEL MAR RACES Franchisee members of the San Diego FOA met up on August 25 at the Del Mar Thoroughbred Club in Del Mar, California for a fun-filled day with friends and colleagues.

22 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 22 Legislative Update Illinois Gov Vetoes Chain convenience stores Minimum Wage Hike and some grocery stores would be required to post calorie information about prepared foods. The rules have techni- Illinois Governor Bruce Rauner recently vetoed a bill cally been in effect in New York City since May, though the that would have raised the state’s minimum wage to $15 an health department has not fined anyone for failing to com- hour by 2022, arguing it would hurt businesses and ulti- ply. The fines would range from $200 to $600. mately reduce jobs, reported the Chicago Tribune. Advo- cates for the wage hike had been anticipating a veto by the Court Blocks San Francisco’s pro-business Republican governor. The veto kept Illinois Soda Health Warnings Law from becoming the third state, after California and New A federal appeals York, to adopt a $15 minimum wage. Illinois' minimum court recently blocked wage has been $8.25 an hour since 2010. Rauner has previ- a San Francisco ordi- ously expressed support for a more modest raise. nance that requires The bill would have increased the minimum wage to $9 advertisers of sugary in January and gradually stepped it up to $15 by 2022. For drinks to post health part-time or seasonal workers under 18 years old, the raise warnings, saying in a would have been to $12 an hour. To give small businesses unanimous decision time to adjust, the law that it likely violates freedom of speech, reported Los Ange- offered employers with “The Governor’s veto kept Illinois les Times. A three-judge panel of the U.S. 9th Circuit Court 50 or fewer workers a from becoming the third state, of Appeals faulted the 2015 ordinance for mandating a large credit toward their in- after California and New York, warning on billboards, structures and vehicles. The San come tax liability that is Francisco law requires the warning to be posted promi- to adopt a $15 minimum wage.” proportional to the nently: “Drinking beverages with added sugar(s) con- wage increase. tributes to obesity, diabetes, and tooth decay.” NYC Won’t Enforce “By focusing on a single product, the warning conveys New Menu Labeling Rules the message that sugar-sweetened beverages are less healthy than other sources of added sugars and calories and are The New York City health department backed off its more likely to contribute to obesity, diabetes, and tooth promise to begin enforcing new menu labeling rules, agree- decay,” wrote Judge Sandra S. Ikuta. “This message” Ikuta ing to postpone implementation until the FDA completes added, “is deceptive in light of the current state of research.” its review of the regulation, reported Politico. The deal, According to the decision, the warning conflicts with state- which preserves the status quo, is a victory for the National ments by the FDA that added sugars are “generally recog- Restaurant Association and the National Association of nized as safe” and “can be a part of a healthy dietary pattern Convenience Stores, which sued the city to stop enforce- when not consumed in excess amounts.” ment of the new rules. The agreement was announced hours before the two sides were scheduled to appear in fed- Overtime Pay Rule Struck Down eral court in Manhattan in late August. A federal judge in Texas recently struck down an The rules at the center of the dispute require chain re- Obama administration rule that would have extended tailers with more than 15 locations to provide upon request mandatory overtime pay to more than 4 million U.S. work- a slew of new nutritional information including calories ers, siding with business groups and 21 states that had chal- from fat, total fat, saturated fat, trans fat, cholesterol, lenged it, reported Fortune. The decision came after the sodium, carbohydrates, dietary fiber, sugar and protein. continued on page 26

24 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website Visit the NCASEF Website www.ncasef.com www.ncasef.com continued from page 24

Legislative Update pay. The Justice Department said it would drop its appeal staff to draft an ordinance with the proposed new regula- sale of flavored tobacco products, including menthol ciga- same judge last year blocked in defense of the Obama-era Labor Department rule. tions. The unanimous decision followed a presentation by rettes and flavored e-cigarette liquid. A coalition later sub- the rule from taking effect “THE RULE WOULD California City Mulls De Anza High students who have spent more than a year mitted a petition with 33,941 signatures that forced the pending his final decision. HAVE DOUBLED TO New Tobacco Laws investigating the impacts of certain tobacco products on supervisors to reconsider the initiative. On September 5 The Trump administration ABOUT $47,000 their peers. they voted to uphold the ban, so a measure to repeal the said it would make changes to THE MAXIMUM The Richmond City Council in California is consid- San Francisco Supervisors ban will now be placed on the city's June 5, 2018, ballot, set- the rule, which riled trade ering raising the minimum age to purchase tobacco prod- SALARY A WORKER Uphold Flavored ting up a showdown between the city and the tobacco in- groups and companies when ucts in the city to 21, along with a citywide ban on the sale dustry that could mirror soda-tax fights that have popped Tobacco Ban it was adopted. The rule, first COULD EARN of menthol cigarettes and flavored tobacco products, re- up in cities across the country. AND STILL BE proposed in 2015, would have ported the Richmond Standard. The council is also con- San Francisco residents will vote next Michigan Lawmakers Vote To Ban doubled to about $47,000 the AUTOMATICALLY sidering prohibiting new retailers within a certain distance year on whether flavored tobacco products Local Soda Taxes maximum salary a worker ELIGIBLE FOR of schools, and banning the sales of “small packs,” which can be sold in the city, reported CNBC. The could earn and still be auto- OVERTIME PAY.” can include cheaply sold packs of mini-cigarettes or cigars. city's Board of Supervisors approved a pro- The Michigan Senate recently voted to prohibit local matically eligible for overtime At its meeting on September 26, the council directed city posal earlier this summer that prohibits the governments from taxing food, drinks or chewing gum, a continued on page 66 Visit the NCASEF Website continued from page 22 www.ncasef.com

1. Serve Meals—Overall, foodser- vice sales in U.S. c-stores are $52 bil- C-stores Today Surprising Revelations lion, or 22 percent of all in-store sales. 1. Serve Meals About C-Stores Freshly prepared food and packaged sandwiches are $35 billion of that total. 2. Oﬀer Healthy Options Today’s convenience store offers so Many stores offer hot meals prepared much more than just gas and bever- 3. Care About e Earth to order—such as sandwiches, wraps, ages, reveals the National Association pizza and even gourmet fare. They also 4. Partner With eir of Convenience Stores (NACS). Step offer grab-and-go snacks and meals in Communities inside a convenience store today and a cup, whether yogurt, fruit or veggie 5. Save You Time you will see that this neighborhood re- cups or other portable snacks. tailer offers fresh meals, healthy op- 2. Offer Healthy Options—Most c- 6. Sell Cool Stuﬀ tions and cool new products. Here are stores include an open-air cooler six revelations about how today’s c- stocked chock full of fresh fruits, veg- 3. Care About The Earth—Many stores are redefining convenience, ac- etables, yogurt, cheese and other convenience stores are looking to play cording to NACS: healthy options. a larger role in litter management. NACS recently announced a major partnership with Keep America Beau- SAN DIEGO FOA VENDOR APPRECIATION PARTY tiful to help retailers reduce and ulti- mately eliminate litter in and near their The San Diego FOA showed stores. how much it values its vendor 4. Partner With Their Communi- partners during its annual Ven- ties—NACS member companies col- dor Appreciation Party, held lectively contribute nearly $1 billion a September 7 at the AleSmith year to charities, and 64 percent sup- Brewing Company in San Diego. port five or more nonprofits in their Vendors were treated to a good communities. time filled with great food, 5. Save You Time—Whether it’s music, and entertainment. fuel, food and drinks or access to cash, convenience stores provide speed of service to time-starved consumers. A NACS speed metrics study found that it takes customers, on average, 3 minutes and 33 seconds from the time they leave their cars until the time they get back in their cars with a purchase. 6. Sell Cool Stuff—Convenience stores are a perfect place to try new food and drink items. You don’t need to buy something in bulk—just grab it and try it, and that’s what most Ameri- cans do: 66 percent of all items purchased in a c-store are consumed immediately. continued on page 56

28 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 28

FLORIDA FRANCHISEES HAND OUT FREE WATER AFTER HURRICANE IRMA After Hurricane Irma left a trail of destruction through Florida in early September, franchisees in the four Mar- kets hardest hit by the storm (1501, 1506, 1507, and 1554) joined forces with local SEI market managers and field consultants to hand out free water to area residents. All told, 7-Eleven franchisees gave away 8,000 cases of water, and some stores also gave out ice. Some 7- Elevens in the areas hardest hit by Irma were closed for up to six days while power was restored and repairs were made. Franchisees reported that unlike the previ- ous hurricane, write-offs were shared by storeowners and SEI. This incident once again demonstrated how franchisees and SEI mobilize to serve their communities in times of need.

30 AVANTI SEPTEMBER | OCTOBER 2017 32 AVANTI SEPTEMBER | OCTOBER 2017 AVANTI SEPTEMBER | OCTOBER 2017 33 BY JOE GALEA, EXECUTIVE CHAIRMAN, NCASEF

I continue to hear from fran- eries from our vendors. While we have chisees throughout the country who a delivery window so we know when have many concerns regarding the op- to expect the products to arrive, in a eration of their stores. The biggest con- lot of cases stores have had to hire an cern that 7-Eleven franchisees extra person so that window is cov- currently have is the declining gross ered. This has increased the labor ex- “Our biggest concern is declining Fixingprofit. You can list manySome reasons for Ofpenses Ourof many franchisees because it this decline. You can say it’s because of gross profit. With fresh and hot Operationalcost increases, trying to keep up with Issues foods we have a higher labor line the competition, or SEI’s move into and higher write-offs, which re- fresh foods and especially hot foods. The company has made the invest- sults in lower profitability.” ment in the equipment and the franchisees are trying to profit through this process, but it has increased our labor liveries. In many situations, I hear that line and write-offs, which has resulted it is impossible for stores to receive de- in lower profitability. liveries on a Friday or Saturday I tried to think back when the fi- evening because those are exception- nancial decline actually started for ally busy times. It takes away from franchisees. After giving it some store associates being able to focus on thought, our direction, as we have guests, and trying to do both is some- been told, is that we need to watch out times impossible. Also, a lot of these for the competition. They are becom- deliveries should be made during the ing more aggressive and they want daytime. Some of our deliveries are part of our business, which is ab- “While we have a delivery coming at night and we have incurred solutely true. But our efforts to keep theft, and some of our suppliers have our competitors at bay have come at a window so we know had their trucks broken into while they price. We are currently running a lot when to expect products were making the delivery to the store. more promotions to keep up with the will arrive, in a lot of My recommendation is that we as competition. At a recent meeting with is not an option anymore to run a store 7-Eleven franchisees should be able to SEI, franchisees expressed their con- withcases single stores coverage have when had deliveries to take control of when our deliveries are cern over the number of promotions comehire in. an extra person to made. We should develop a feasible de- we have every month, and as a result it cover Secondly, that we window.” need to take a closer livery system where both SEI and fran- is being scaled back. look at the delivery windows when chisees would be satisfied and we can We now have to stores are actually receiving their de- focus on growing our businesses. JOE GALEA devote more time CAN BE REACHED AT scheduling our em- “Franchisees should be able to take control of when our deliveries 831-426-4711 or [email protected] ployees’ hours in are made so we can focus on growing our businesses.” order receive deliv-

AVANTI SEPTEMBER | OCTOBER 2017 35 ERIC H. KARP, ESQ., GENERAL COUNSEL TO NCASEF

On October 12, 2017, a 54 page class- are in fact treated as employees. Over time, “The central basis of the com- action complaint was filed in the United SEI has been gradually chipping away at States District Court for the Central Dis- the profits of franchisees, increasing their plaint is that while SEI promises trict of California, Western Division, alleg- costs, exercising more and more control to franchisees and represents to ing that 7-Eleven, Inc. (SEI) is in violation over what is supposed to be an independ- of the Federal Labor Standards Act and ently operated convenience store, where them that they are and will be FranchiseesCalifornia employment laws in connection Proclaim:franchisees control the manner and the independent contractors, they with its administration of this convenience means of the operation of the location. store system. The docket number is 2:17- are in fact treated as employees.” EnoughCV-7454. The designated andIs proposed Enough! class representatives are five courageous California franchisees: Serge Haitayan, and Jaspreet Dhillon, Manjit Purewal, Robert • Transferring responsibility for paying Elkins, and Maninder “Paul” Lobana. The credit card processing fees directly to fran- complaint seeks money damages, restitu- chisees. tion and other relief. The complaint describes in great de- The attorneys handling the case on tail and at great length the many facets of behalf of the franchisees are Marc Culp of control that SEI exercises over the day-to- Denton, Texas, who is no stranger to the day operation of franchised stores. The 7-Eleven system, having been involved in complaint alleges that SEI has been given the so-called OFFF Litigation, originally the powers of an employer and all of the instituted in 1993; Timothy Williams and In a press release issued by the Na- harshest, most overreaching rights of a Stephanie Reynolds, of Pope, Berger, tional Coalition, the following aspects of commercial lender, landlord and personal Williams and Reynolds, LLP in San control by SEI were cited: property lessor. Emblematic of that con- Diego, California, who specialize in class • Taking away the opportunity of fran- trol is SEI’s dominion over every dollar re- action litigation in the employment arena; chisees to possess and/or control monies ceived into or paid out of the proceeds and Mandeep “Bobby” Rupal, an employ- generated from franchised stores; generated from every franchised store. ment lawyer based in Chino Hills, Cali- • Directing franchisees to sell any good or The complaint divides the various el- fornia who presented an excellent seminar service for less than the cost of acquiring ements of the pervasive control exercised on employment law at the National Coali- and selling the same; by SEI into Financial Controls, Work tion convention this past July. • Requiring franchisees to use equip- Controls, and Operational Controls. The central basis of the comment 7-Eleven specifies to oper- • Financial Controls include those over plaint is that while SEI promises ate franchise stores; fees and charges, money, accounting mat- to franchisees and represents to • Imposing a regressive royalty ters and SEI’s role as a discretionary se- them that they are and will be structure that penalizes fran- cured lender. independent contractors, they chisees for increasing sales; • Work Controls include those over work without pay prior to purchasing the franchise, hours of operation, and the amount paid to the franchisees for their work. • Operational Controls include those over products and services sold, sources used continued on page 38

AVANTI SEPTEMBER | OCTOBER 2017 37 “The complaint describes in great detail and at great length the many facets of control that SEI exercises over the day-to-day operation of franchised stores.” continued from page 37 to acquire products and services sold, how in violation of the Federal Fair Labor products and services are sold, advertis- Standards Act continued from page 20 ing, use of store premises, food service 2. Failure to pay overtime compensation standards, information and ideas gener- in violation of California law double digits ated from store operations, maintenance 3. Failure to indemnify for expenses and through the ofFranchisees store premises and equipment, Proclaim: general losses Enough in violation ofIs California Enough! law forecast period of 2021, when it will reach business operations, management of store 4. Failure to provide and maintain uni- $189.97 billion. • Motiva recently announced the grand opening of the newest employees, and oversight to insure com- forms and equipment in violation of Cal- and largest 76 branded gas station in Texas, pliance. ifornia law with a 20,000-square foot convenience The complaint further alleges that SEI 5. Unfair business practices in violation of store, 14 fuel pumps, a large truck fueling franchisees meet the six factor economic the California Business and Professions area and four quick-service restaurants on- realities test for determining an employ- Code site, including Dunkin Donuts, Golden ment relationship. These include (a) the 6. Unlawful business practices in violation Chick, Steak N’ Shake and Texas Best degree of the alleged employer’s right to of the California Business and Professions Smokehouse Barbeque. • New research by control the manner in which the work is Code the Retail Feedback Group found about half to be performed, (b) the alleged employee’s In explaining why this lawsuit had to of online shoppers plan to purchase grocery opportunity for profit or loss depending be filed, Jay Singh, Executive Vice Chair- items more often in the coming year and upon his or her managerial skill, (c) the al- man of the National Coalition stated in rate their overall satisfaction ordering food leged employee’s investment in equipment the press release: “We need to hold 7- and grocery items online highest with or materials required for his or her task, or Eleven accountable. We love this brand Amazon (4.63 on a five-point scale), fol- his or her employment of helpers, (d) and are saddened by the way they have lowed by Walmart (4.41) and Supermar- whether the service rendered requires a been treating the people who are the very kets/Food Stores (4.32). • QuickChek Corp. special skill, (e) the degree of permanence heart and soul of the company”. celebrated its 50 years in the convenience of the working relationship, and (f) The plaintiffs in the case have also of- channel and marked its 150th store with a whether the service rendered is an integral fered to engage in mediation with SEI to new prototype designed for millenials, reported Convenience Store News. New ele- part of the alleged employer’s business. see whether or not the differences of the ments in the Monroe, NJ store include The complaint alleges in 18 separate para- parties can be resolved without engaging cellphone and laptop charging stations in graphs why SEI franchisees meet the eco- in protracted litigation. As of the time that the indoor seating area, a fresh soup bar, nomic realities test for determining an this issue of Avanti went to press, no re- touch screen ordering, no-fee ATMs, and employment relationship. sponse had been received. Wi-Fi. • A new survey by Cardtronics reveals The complaint also alleges that the As your General Counsel it has been that U.S. consumers embrace the freedom franchisees have been misclassified as in- and will continue to be my responsibility to choose cash and pay in multiple ways. dependent contractors under California to assist the litigants and their lawyers, and The 2017 Health of Cash survey finds that Law and that SEI has violated California to keep the franchisees who are the mem- 91 percent of consumers used cash in last Law with respect to overtime for four of bers of the FOAs six months and 89 percent of consumers the named franchisee plaintiffs. that form the Na- like having the ability to use a variety of ERIC H. KARP The complaint seeks a jury trial. tional Coalition CAN BE REACHED AT payment methods. • Panera Bread recently The claims made under the com- fully and timely in- 617-423-7250 announced it is one of the first national plaint include: formed of all devel- [email protected] restaurants to offer customers the ability to 1. Failure to pay overtime compensation opments in the case. order via voice for delivery and Rapid Pick- Up with the Google Assistant on their mobile devices. The option is currently available to My Panera members in St. Louis “The complaint also alleges that the franchisees have been and Silicon Valley, but the company said full misclassified as independent contractors under California rollout and implementation nationwide is anticipated by the end of the year. • Ford Law and that SEI has violated California Law with respect to and Domino’s Pizza have teamed up to test overtime for four of the named franchisee plaintiffs.” continued on page 48

38 AVANTI SEPTEMBER | OCTOBER 2017 Vice ’ ChairsA LESS THAN SMOOTH ForumCONVERSION TO EXXONMOBIL GAS BY REHAN HASHMI VICE CHAIRMAN, NCASEF

For some time SEI has been con- verting its 7-Eleven gas to major “SEI HAS NOT FULLY TAKEN INTO brands, such as ExxonMobil, in stores ACCOUNT HOW THE CONVERSION across the country. SEI said the reason TO EXXONMOBIL GAS AFFECTS behind this conversion is a widely known gas brand will bring more cus- have to use an Exxon FRANCHISEES.” tomers to our pumps and into our controller for gas au- stores. As of this date, 7-Eleven stores thorization, AND our 7-Eleven POS for EOS and EOD at one register. Now we in areas of Texas, Florida and California accepting cash or processing a credit card have to do it on two systems—the 7- have been converted, and currently, a transaction. Many of us, in essence, have Eleven system and the ExxonMobil sys- conversion is being rolled out to about gone from operating an integrated store tem, which is called Passport. It also takes 40-plus Illinois stores in our area to running a non-integrated store. more time to do the Cash Report. around Chicago. Unlike acquisition stores, existing gas Gas variations and chargebacks never As part of conversion, the gas com- franchisees bought a simplified model happened with the integrated system, but now they are becoming more common. pany is paying to install “IT NOW TAKES when they franchised their new gas pumps and digital gas stores. We all paid some For example, with an integrated system, if DOUBLE THE signage in the converted sort of gas fee, and we ex- a customer comes in and buys $20 worth stores. In some cases they TIME TO COM- pect some ROI from the of gas, the store would ring $20 on Pump are also offering to upgrade PLETE A GAS gas side of the operation. 5 and put the $20 in the register. Now, to diesel as part of the con- TRANSACTION, The current gas commis- with a non-integrated system, when a version. That is all well and BECAUSE sion model is barely a customer comes in to purchase $20 worth good, but it appears SEI has THERE ARE breakeven model, and this of gas we take his money and we have to not fully taken into account MORE STEPS most recent change shifts go to the ExxonMobil controller and au- continued on page 43 how this conversion affects INSIDE THE additional burden to the “WE MUST WORK franchisees. The major STORE.” franchisee side. It’s a differ- downside to this conver- ent story if you purchased a TOGETHER TO TAKE sion is fuel becomes non-integrated, and store newly acquired by SEI that already CARE OF THE BUGS stores will have two POS, our standard 7- sells ExxonMobil gas (not that it makes it BEFORE WE ROLL THIS Eleven registers, and an ExxonMobil right), because you know what you’re get- OUT ACROSS MORE “controller” just for gas. The problem is ting yourself into. If you’ve had your store that the non-integrated fuel system (dual converted, you have no choice, and you’ve MARKETS. GAS CONVER- system) is adding multiple extra steps at pretty much been blindsided by the ef- SION SHOULD NOT HAVE the point of sale and on the back end. fects of the change. A NEGATIVE EFFECT Prior to the switch to ExxonMobil Now it takes double the time to com- FINANCIALLY ON FRAN- gas stores used the 7-Eleven POS to plete a gas transaction, because there are CHISEES OR MATERIALLY process gasoline more steps inside the store. End of Shift REHAN HASHMI CHANGE OUR GASOLINE and merchan- (EOS) and End of Day (EOD) are also CAN BE REACHED AT OPERATION AND [email protected] dise transac- more time consuming because now we or 847-845-8477 tions. Now we have multiple steps. Prior to this, we did RELATIONSHIPS.”

AVANTI SEPTEMBER | OCTOBER 2017 41 continued from page 41

ViceVice ’ “WE NOW HAVE GAS lons per day. That’s not a lot of money in will compensateVice you ’ X amount each ChairsExxonMobil Gas Conversion Advantages and Issues BACK END ISSUES ViceVARIATIONS ’ AND commission—about $45. Another point month.” Why shouldChairs we have to ask for Forum Chairs of discontent is that SEI will make adjust- that? SEI knowsForum it is costing us and should ADVANTAGES WITH formed about the transition • Paperwork is more time consuming CHARGEBACKS. HOW ments on the Cash Report without noti- make us whole. GAS CONVERSION • Mobil Speed Pass is not available • If you make one mistake it takes hours DO WE COVER THIS AT to retrace and correct it fying us. If we have a gas variation they just I am suggesting we work together to • More customers will stop to fill up if • Can't redeem points for eligible non- 1.5 CENTS PER GALLON go ahead and make an adjustment. take care of the bugs in the existing we have nationally known gas. fuel purchases on Plenti card • In the cash report summaries we are required to make three additional en- COMMISSION, $15 ON Furthermore, with the dual register stores before we roll this out across more • As part of conversion, the gas com- • Can't use Plenti card key tag because tries in line ID 10, 6-8 additional en- system, the speed of service we provide our markets and also make sure that there is pany is paying to install new gas there is no scanner on the Passport 1,000 GALLONS?” tries in line ID 20, and multiple customers has decreased. It takes more no negative effect financially on the fran- pumps and digital signage. system additional entries in line ID 40 thorize the pump. Then we have to walk time to run two registers, plus the Exxon- chisees and no material change in our • In some cases they are also offering to FRONT END ISSUES • Gas variations and charge backs never to the 7-Eleven register and ring up $20 Mobil SpeedPass doesn’t work, so that’s a gasoline operation and relationships. SEI upgrade to diesel. • Takes double the time to complete a happened in an integrated system; we worth of gas and put the money in. What big hassle for the new ExxonMobil cus- made a unilateral decision to convert our GAS CONVERSION ISSUES gas transaction have more chances for error at POS happens if my clerk decides to put the $20 tomers coming into our stores. SEI is aware gasoline, so they should either compen- CUSTOMER ISSUES • In one transaction alone, a clerk may • We have more fuel credit card varia- in his pocket or if he makes a mistake? In of these issues and is committed to a fix in sate us until they fully integrate us, or • Multiple additional steps required on have to toggle between POS, gas con- tions and charge backs and additional the integrated system, there was a zero 2018, but won’t give us a specific date. delay the rollout until they can integrate the dual POS system are slowing sole, the lottery machine and the hot employee theft issues percent chance of having a variation. In the meantime, this conversion is ExxonMobil’s system with ours. SEI’s job speed of service for both gas and non- food area • For every $15 "error" or employee We don’t make enough money on gas costing us. Our franchisor says the incon- now is really not to go backwards but to gas customers • End Of Shift/End Of Day is more time theft, franchise stores lose 1,000 gal- to compensate for gas variations. We make venience is temporary. SEI should say, go forward. It is to create the kind of • Customers need to come back inside consuming and has multiple steps lons worth of fuel commission 1.5 cents per gallon commission. If I sell “We understand that it’s costing you, but “simplified” store operation that we the store for a credit prepay refund • Additional POP is required • SEI makes Cash Report adjustments 1,000 gallons, I make $15. An average we’ll compensate you.” They should say, know will align with our principles of • Customers are confused and not in- • Refunds are time consuming without any notification store in Chicago will sell about 3,000 gal- “Until you are fully integrated in 2018, we “Servant leadership.” Franchisee Guest Column

Protecting The Brand And Franchisees

By Pete Gragnano, President, Suburban Washington FOA

In laying the groundwork for the 2019 functions. Since “Franchising Agreement, SEI has stated that there are we bought a four guiding principles in its development: franchise as relieves the Balanced Economics, Brand Protection, opposed to an company of Maintaining Independent Contractor Sta- independent employee tus, and Marketable Agreement. business, we for- compensation In the last issue of Avanti I spoke about sake some discre- Balanced Economics. This article deals tionary decision-making and benefits, as with Brand Protection. as a trade off for uniformity. That well as inventory According to the American Heritage being said, we rely on our franchisor to variation, and shifts some New Dictionary of Cultural Literacy, provide us with the proper tools, market- Franchising is defined as: “In business, a ing, and other assistance to support us ver- of its costs, like maintenance relationship between a manufacturer and sus our competition. and credit card fees, to the a retailer in which the manufacturer pro- As with many other franchisors, 7- franchisees.” vides the product, sales techniques, and Eleven has elected to expand through fran- other kinds of managerial assistance, and chising rather than via the operation of it is the local franchisee who becomes the the retailer promises to market the man- corporately owned stores. Since franchis- “face of the brand.” To our daily cus- ufacturer's product rather than that of ing relieves the company of two of its tomers, “WE” are brand 7-Eleven, not the competitors. For example, most automo- major costs (employee compensation and entity that resides in Dallas. This was ac- bile dealerships are franchises. The vast benefits, as well as inventory variation), knowledged by SEI CEO Joe DePinto in majority of fast food chains are also run shifts some of its costs to the franchisees a speech to the National Coalition in July 2016, and reiterated recently in a video on “Franchising provides a significant source of revenue to the 7-Hub by SEI COO Chris Tanco, who company through franchise fees. To our daily customers, stated that “franchisees have built the system into an iconic brand” and that “the ‘WE’ are brand 7-Eleven, not the entity that resides in Dallas.” brand and trademark must always be seen in the most favorable light.” on the franchise principle, with the re- (for example, maintenance and credit card Contrast this with the company's ac- tailer paying to use the brand name.” fees), and concurrently provides a signifi- tions over the past years (institution of the As 7-Eleven franchisees, we are part of cant source of revenue through franchise Graduated Gross Profit Split, reduction in an iconic brand that essentially created the fees, it's a no brainer. Combine this with gasoline commissions, the introduction convenience store industry and has been the fact that franchise stores have a gross of credit card fee payments, etc.) and you franchising stores since the early 1960s. As profit margin that exceeds its corporate have to shake your head in amazement at with any fran- counterparts on average by 2 percent, and the hypocrisy. Further, as stores become PETE GRAGNANO chisor, protect- it's no wonder that approximately 87 per- unprofitable due to outside forces like the CAN BE REACHED AT ing the “brand” cent of 7-Eleven stores are franchised. increases in the minimum wage, it's not a 443-472-2327 or [email protected] is one of its Since franchisees own the dispropor- question of if, but when, the brand's most important tionate share of the stores in the system, continued on page 48

AVANTI SEPTEMBER | OCTOBER 2017 45

Franchisee Guest Column

continued from page 45

image will be tarnished as franchisees re- continued from page 38 duce labor in an effort to survive and “AS STORES BECOME UNPROF- negatively impact customer service or self-driving pizza deliv- ITABLE DUE TO OUTSIDE FORCES ery cars in Michigan, as cleanliness. With 35 percent of the stores LIKE THE INCREASES IN THE part of an effort to better understand how below equity last January, and with the MINIMUM WAGE, THE BRAND'S customers respond to and interact with au- number likely to rise as higher minimum IMAGE WILL BE TARNISHED AS tonomous vehicles, reported The Verge. • CVS wages become effective, the lyrics of the Pharmacy recently introduced automated re- 1960s Creedence Clearwater Revival FRANCHISEES REDUCE LABOR IN tail vending machines stocked with conven- song come to mind—“I see the bad AN EFFORT TO SURVIVE AND ient, on-the-go necessities including moon rising; I see trouble on the way....” NEGATIVELY IMPACT CUSTOMER over-the-counter health products, “better-for- Furthermore, as an add-on to SERVICE OR CLEANLINESS.” you” snacks and popular personal care prod- NCASEF General Counsel Eric Karp's ucts. • Non-alcohol hot and cold beverages article in the last issue of Avanti, com- our stores as being the norm at all others. accounted for over $181 billion in annual sales pare our worn and outdated stores with Therefore, the onus is on our franchisor and totaled over 113 billion servings in 2016, the new and sleek look of our competi- to help the franchise community during according to research firm Technomic. Al- tors. Dallas should be embarrassed by these difficult times and to bring our though soda and regular coffee continue to drive beverage volume overall, formats like the conditions of many of our stores, stores up to the standards of 2017, not specialty coffee, bottled water and energy which certainly do not put the brand and 1970. The future of the brand and trade- drinks are expected to continue their already trademark in a “favorable light.” mark hangs in the balance. rapid growth in the next three to five years. • The general public paints with a broad This is my opinion and I welcome continued on page 54 brush; it equates an experience at one of yours.

48 AVANTI SEPTEMBER | OCTOBER 2017 Vice ’ Chairs ForumOVERCOMING OUR HOT FOODS CHALLENGES BY ROMY SINGH VICE CHAIRMAN, NCASEF | PRESIDENT, EASTERN VIRGINIA FOA

When it comes to hot foods, our I understand that the complexity of “WE SHOULD FOCUS ON guests today are looking beyond cheesy, seasonality in dealing with the birds, but A FEW ITEMS THAT ARE greasy and fried temptations. No doubt we must still have a very high standard our products are within our guests' every- from our vendors to provide us with a HIGH QUALITY, EASY TO day budget, but there are several challenges consistent size for these items year- EXECUTE, AND ARE to our hot foods program we must over- around. We must implement some qual- TESTED THOROUGHLY come before we can reach SEI’s goal of 20 ity assurance over these products on an IN DIFFERENT REGIONS percent of the total merchandise sales. on-going basis. Additionally, we must test First and foremost, for years we have and verify the items in one market for at BEFORE INTRODUCING been working to improve the quality of least a year before introducing it to the THEM TO THE ENTIRE hot foods such as mini tacos, chicken entire country. COUNTRY.” tenders, and chicken nuggets/dippers. The second issue with our program is We continue to push and try different too many items to execute, cook, and hold played and visible to things with no positive outcomes. From the hot foods case. We already have three today’s health conscious the consumer’s point of view and previ- kinds of pizza (cheese, meat and pepper- guests. To fix this issue, ous experience, this is the same item that oni), egg rolls, four types of wings, mini there should be menu was discontinued, but now is being rein- tacos, etc. It seems every month SEI intro- boards and/or profession- troduced under the same item name. If duces a new hot food item. Instead of hav- ally displayed POPs that visibly in- we continue going down this path, not ing that many items, we should focus on a cludes the nutritional information. only will our guests lose faith in that few items that are high quality, easy to ex- The fifth obstacle is the design and item, but they will also lose faith in our ecute, and are tested thoroughly in different layout of our stores and equipment. The hot foods program altogether. There are regions before introducing them to the en- design and layout is not user-friendly for tire country. our staff to execute at the highest level to “FRANCHISEES DO UNDERSTAND WITH ALL The third meet the speedy customer service de- THE CHALLENGES WE ARE FACING WITH issue of the mand. One of our brand strategies is to hot foods pro- grow more stores, but as we are growing, HEAVY REGULATED CATEGORIES, WE MUST gram is the constructing, and/or remodeling, we must FOCUS AND GROW THE FOOD SERVICE.” equipm e n t design and layout the store equipment, so (Turbo Chef) it is simplified and user-friendly for our many inconsistencies with the sizes in and lack of preventative maintenance. We staff and saves labor dollars for the stores. the mini tacos, chicken tenders, chicken understand that cleaning the oven is the Franchisees do understand with all sandwich, and chicken nuggets/dippers. responsibility of the franchisees, and that the challenges we are facing with heavy The size discrepancies result in the prod- it needs to be cleaned thoroughly. How- regulated categories, we MUST focus and uct not being cooked properly. The end ever, preventative maintenance needs to grow the food service. But, in order to result is not steady due to some foods be performed by a professional service achieve our 20 percent or higher goals, we being over or undercooked, and there- provider technician regularly and the MUST have high quality products con- fore leads to many heat settings checked so the equipment sistently and the stores must have the ROMY SINGH guests’ unhappy cooks the product in a consistent manner. right tools and well-functioning equip- CAN BE REACHED AT [email protected] with these finish The fourth challenge is there is no nu- ment in order to execute to the highest 757-506-5926 products. tritional information professionally dis- level.

AVANTI SEPTEMBER | OCTOBER 2017 51 Franchisee Guest Column

The Graduated Gross Profit Split Agreement: Where It Came From And Why It Must Go! By John Irvine, Franchisee, Metro Detroit

At a recent National Coalition meet- lar. By the end of the value of zero. Gold closed recently at ing, General Counsel Eric Karp was asked war the Conti- $1,258 per ounce. If we divide $35 if he knew of any other franchise systems nental Dollar by $1,258 we see that the dollar that had a graduated gross profit split. had reverted to has lost 97 percent of its value Eric indicated that he knew of no other its intrinsic value, since 1971. system, except possibly a graduated split which was zero. The Labor unions had little that increased the franchisee’s share with framers of the Constitution power in the United States greater volume. wanted the United States to have sound before 1935. In that year the Wag- Business common sense would indi- money. Section 8 of the Constitution ner Act was passed, which mandated that cate that you don’t motivate higher sales states, “Congress shall have the power to employers recognize labor unions and by offering the sales force less commis- coin money and set the value thereof.” bargain with them in good faith. Adding sion for increasing sales. With sales and Section 10 states, “No state shall make to the power of labor unions, most of the customer counts down at 7-Eleven, we anything but gold or silver legal tender in industrial states passed closed shop laws, can see that the motivation to sell less is payment of debts.” From the founding of which mandated that if 51 percent of em- working. The question is, how did 7- the nation the value of money was set at ployees voted for a union then100 percent Eleven end up with a franchise agreement $18.93 equaled an ounce of gold. Inflation of the employees must join the union and that motivates franchisees to sell less? pay union dues. It was very difficult to Why a graduated gross profit split that is “Inflation was unheard of form a union in a state that did not have not sustainable, making the franchise until 1933, when President closed shop laws. worthless over time? To answer these Franklin D. Roosevelt made 7-Eleven had grown to a chain of over questions, we must go back in time, all the owning gold illegal for 2,000 stores by the 1960s, all of which way to the founding of our nation. were in southern states with no closed To understand the peril franchisees American citizens and paid shop laws. Operating convenience stores face, we must understand the difference a premium of $20.67 to with a labor union would be all but im- between money and currency. Money is a those turning in their gold.” possible. A small convenience store chain store of value and a medium of exchange. in southern California had discovered an Money is backed by something of value, was unheard of until 1933, when Presi- answer to the union problem—turn every such as gold or silver. Money over the ages dent Franklin D. Roosevelt made owning store into a private business, making it has been backed by other commodities, gold illegal for American citizens and impossible to organize. 7-Eleven had such as wheat. Currency, on the other paid a premium of $20.67 to those turn- found an answer to growing its business hand, is simply a medium of exchange ing in their gold. The dollar still had in- model in heavily unionized states. and has no intrinsic value and is called trinsic value for international trade. The franchise system was set up so fiat. Fiat currency always reverts to its in- In 1935, the value of gold was in- that the cost of operating a corporate trinsic value, which is zero, and this creased to $35. On August 13, 1971 two store was essentially the same as operat- process is called inflation. historical events took place: 1. I became a ing a franchise store. A corporate store The Revolutionary War against Eng- 7-Eleven Franchisee, and 2. President had a manager, an assistant manager and land was financed Richard M. Nixon took the country off employees with health insurance. A fran- JOHN IRVINE by the colonists the gold standard. The United States no chisee could do well by eliminating the CAN BE REACHED AT using fiat cur- longer had money; it had fiat currency. manager, assistant manager and health [email protected] or 248-812-4975 rency called the The fiat currency system of the United insurance. The company began to grow Continental Dol- States began its descent to its eventual continued on page 54

AVANTI SEPTEMBER | OCTOBER 2017 53 Franchisee Guest Column

continued from page 53

and grow. The management of the com- these stores stayed the same for 30 years. continued from pany had a formula: for every store loca- For 30 years, inflation is raising sales page 48 tion they bought, they leased one. By and rent is remaining constant. The rela- C-Store chains 1989, 7-Eleven had grown to over 8,000 tionship between sales and rent is widen- QuikTrip and stores. The system had become a money- ing in 7-Eleven’s favor every year for 30 Sheetz were named among the Best work- making machine, but there were storm years. If a store was leased in 1975, the places for Women by Fortunemagazine. clouds on the horizon. Wall Street had lease would terminate in 2005. The rent QuikTrip came in at No. 54, while Sheetz discovered that the purchase price of all for that location would revert from a 1975 ranked No. 79. • Philip Morris said it will of a company’s stock was often far less rate to the current market value, which spend about $1 billion setting up a founda- than the breakup value. 7-Eleven was sit- would probably be more than four times tion to reduce the prevalence of smoking as ting on over $400 million in cash and im- the 1975 rate. This new reality was hap- the maker of Marlboro cigarettes aims to mense real estate holdings, making it a pening in a company that is netting 1 per- convert smokers into consumers of devices prime candidate for a hostile takeover. cent of sales. that don’t burn tobacco, reported Not wanting to lose control of the Making matters worse, real estate be- Bloomberg. • Twenty-four participating 7- business they had built, the founders at- fore 2007 was in a bubble. Leases were Eleven stores in the greater Austin area are now selling Rosa Foods’ suite of nutrition- tempted to take the company private, fi- coming due at a time when real estate was ally complete, ready-to-drink Soylent meals. nanced with junk bonds. Unfortunately, tremendously overvalued. The math sim- The 7-Eleven locations now offer four Soy- the junk bond market was collapsing as ply no longer worked and the company lent flavors: Original, Cacao, Cafe Coffiest and the takeover was taking place. The inter- found itself in a no-win situation. Oper- Cafe Chai. • Chevron USA Inc. has partnered est rate was much higher than expected ating a corporate store was just as expen- with Jacksons Food Stores to grow the Ex- and to make matters worse, they way sive as operating a franchise store. The traMile convenience store brand across the overpaid for the stock. After the dust set- only answer was to either start closing low Western United States, reported CSP Daily tled, the company was left with debt that volume stores, or take money from high News. The ExtraMile system currently in- far exceeded assets. volume franchise stores to subsidize low cludes more than 700 c-stores in California, “7-Eleven was To save itself, the volume stores and franchise all stores. Oregon and Washington, and the companies sitting on over company began The current owners of the company be- plan to double the number of sites by 2027. $400 million selling off real es- lieve that there is no need to advertise if • Targeting the 80 million consumers in the in cash and tate holdings— 7-Eleven stores maintain a massive pres- U.S. who purchase lottery tickets regularly, more than 3,000 ence, and closing stores is not an option. emerging company LottoGopher offers immense real daily, monthly and annual subscriptions to estate hold- locations were sold. There is a cost to sales. If the franchisee B a n k r u p t c y share of the profit is not sufficient to cover customers in California, with plans to scale up its presence in 22 other states over the ings, making was the only way the cost, then we have a problem for both next few years. • AccuWeather recently up- it a prime out. For a $400 mil- 7-Eleven and the franchisee. Expenses and candidate for graded its estimate of the likely cost of Hurri- lion loan, Seven- sales will be rising only because of inflation. cane Harvey, saying it now expects the a hostile Eleven Japan The franchisee share of gross profit will be damage caused by the storm to come to takeover.” received 70 percent declining only because of inflation. As sales $190 billion, or a full 1 percent of U.S. GDP. • of the stock. Oper- rise, franchisee net income adjusted for in- Ben & Jerry's announced an agreement with ating as a public company, flation will be declining. As it becomes ap- Migrant Justice to implement the worker- with all its debt, 7- parent that a 7-Eleven franchise is a driven Milk with Dignity (MD) Program in Eleven was netting declining asset, goodwill value will disap- Ben & Jerry's Northeast dairy supply chain. about 1 percent of pear and eventually 7-Eleven will run out The program brings together farm workers, sales. Now comes of people willing to franchise their stores. farmers, and dairy buyers to ensure just and the fun part, the part 7-Eleven franchisees have zero bar- dignified working conditions in Ben & that the knowledge of what inflation is gaining power. 7-Eleven management is Jerry's northeast dairy supply chain. • The comes in handy. aware of the facts laid out above. Without United Arab Emirates has instituted a hefty Remember, during their growth period leverage, franchisees must understand tax on sugary drinks and cigarettes—50 they leased one location for every location that their 7-Eleven franchise is on track percent on soda and 100 percent on energy drinks and tobacco products—partly as a they bought. The leases were all 20 years, to becoming worthless. The only hope with two five-year options. The rent on franchisees have is that the National continued on page 56

54 AVANTI SEPTEMBER | OCTOBER 2017 continued from page 54 continued from page 28 way to lower obesity and diabetes rates, reported Business Insider.Today, 19.3 percent of the UAE population (nearly one in Tesla Considering “Dollar General’s store re- five people) between the ages of 20 and 79 Supercharger Stations models with fresh food and have type 2 diabetes. • Alimentation Couche-Tard said its North American net- With C-Stores produce have three to four work of stores held fundraising efforts to Tesla plans to roll out more times their typical sales.” help support those affected by Hurricane electric supercharging stations Harvey, donating the funds to the Red this year, and is also considering Cross. The company also donated $100,000 adding small convenience stores to the to the organization and activated an inter- stations so drivers can relax and refuel nal fundraising campaign to help employ- themselves while they wait for their ve- Dollar General’s ees affected by the storm. • In the hicles to charge, reported Fortune. Dur- Food-Focused Remodels aftermath of Hurricane Harvey, c-store chain Sheetz said it would match in-store ing the recent the FSTEC restaurant- Generate More Sales donations to disaster relief efforts, up to technology conference, Tesla CTO J.B. $50,000. Sheetz's 560 stores across Penn- Straubel explained that long-distance sylvania, North Carolina, Maryland, Ohio, Tesla drivers typically spend 20 or 30 Virginia and West Virginia accepted dona- minutes at roadside Superchargers, and Dollar General has found that food- tions at checkout for the victims of Hurri- while they’re waiting drivers “want to focused store remodels—including cane Harvey from September 7 through eat, they want to have a cup of coffee, September 30. • Anheuser-Busch sent some that introduce fresh produce as- they want to use the bathroom.” Tesla three truckloads—over 155,000 cans—of sortments—are generating three to four wants to satisfy those needs by, basically, emergency drinking water to help commu- times the sales results of typical remod- turning Superchargers into full-service nities in the Gulf Coast area in response to els, reported Supermarket News. Dollar rest stops. Straubel said Tesla doesn’t Hurricane Harvey. • Wawa, Inc. and The General said it had completed approxi- have much interest in running those op- Wawa Foundation Inc. launched a chain- mately 185 store remodels through the erations itself, but is instead looking at wide, in-store crisis campaign in late Au- end of its fiscal second quarter—around gust designed to provide disaster relief partnering with experienced operators. a third of which include a test assistance to those communities most af- of fresh produce. The company fected by Hurricane Harvey. • The PepsiCo “Tesla seems be looking for super- added that, while it’s still early, Foundation announced it will provide $2 charger partners that can cover a “initial remodels are yielding million in grants to help communities in strong same-store sales im- Mexico City, Puerto Rico and the Caribbean 20-30 minute charging window.” impacted by natural disasters in Septem- continued on page 62 ber. These grants are $1,000,000 to the American Red Cross and $1,000,000 to the Pan American Development Foundation to rebuild greater disaster-resilient communi- Play The Name Game! ties in the Mexico City area and Puerto Look carefully at each page in this issue. Rico. • The Kroger Co. Foundation donated $100,000 to the Houston Food Bank, Somewhere in this magazine a line is hidden that America's largest food bank serving 600 contains the words $Name Game Winner + hunger relief charities in 18 southeast person’s name + city$. If you find this line, and Texas counties, to supply operational sup- it contains your name, call AVANTI’s Offices at port and meals to families affected by the Hurricane Harvey floods. • In response to 215 750-0178 before the next magazine is published, devastation and widespread flooding and win this issue’s total. NCASEF Members only. caused by Hurricane and Tropical Storm continued on page 60

56 AVANTI SEPTEMBER | OCTOBER 2017 AVANTI SEPTEMBER | OCTOBER 2017 57 Visit the NCASEF Website www.ncasef.com Let’s Just Listen! By Hari Patel, President, Jay Patel, Vice President, Mital Patel, Board Member and Ketan Patel, Board Member, Metro New Jersey FOA

If there was a TV show their concerns and problems with other annual trade “If we listen on how 7-Eleven fran- existing franchisees. We have also created show. We were to each chisees run the daily oper- a WhatsApp group where all franchisees able to add 10 other most ation in their stores, it can share their knowledge and better more merchants issues can would be as thrilling and communicate issues to get resolutions to our list of FOA be solved interesting as Game of without waiting for their field consultant. vendors. They by just Thrones, Narcos or House of Cards. For now have confi- talking.” franchisees, running their businesses is “We reached out to local dence that our no small feat. Every day you wake up and SEI management, our FOA will bring great results and higher have to deal with challenging issues. Em- market mangers and penetration rates of their products in our ployee issues, SEI’s rules and regulations, franchisees’ stores. new city or state laws or ordinances, ven- Zone leader, and asked Most problems can be solved by lis- dor issues, and the daily struggle to juggle them what they would tening, so there is little reason for argu- between multiple stores, personal life and like from our FOA. The ments or misunderstanding. We business politics are just a few. How can answer was simple: bet- strongly believe that everyone is in the franchisees survive and grow in these 7-Eleven business to make money for types of situations? ter communication.” their stores. Franchisees as well as SEI We often hear that by listening we want to grow sales. Certainly there will can solve most of these problems and dif- Next we reached out to local SEI be issues that arise, but if we listen to ferences. How true is that? If SEI listens to management, our market mangers and each other most of these issues can be its franchisees, franchisees listen to SEI, Zone leader, and asked them what they solved by just talking. storeowners listen to their customers, staff would like from our FOA. The answer and vendors, can we really grow our rela- was simple: better communication. Our HARI PATEL tionships and sales? relationship with SEI has significantly can be reached at We have been franchisees for many improved, as we are better able to under- [email protected] or 732-251-6924 years and when we took over the Board stand each other’s concerns through of the Metro New Jersey FOA we decided open communication. They want to be JAYESH PATEL to follow that simple principle—just lis- part of our FOA and attend all of our can be reahed at ten. We reached out to our area fran- events. This gives our old as well as new [email protected] or 732-570-1841 chisees and asked them what was holding franchisee members confidence, and them back from joining our FOA. The they are more likely to bring challenges KETAN PATEL answer was very simple: they wanted us to the table so that our FOA and SEI can can be reached at to hear their problems and try to get them solve them quickly. [email protected] or 201-923-0602 a solution. By employing this policy we Then we reached out to our vendors were able to add 60-plus franchisees in and asked them what they would like MITAL PATEL less than eight months. Now, franchisees from our FOA. Again, the answer was can be reached at see value in joining our FOA. The new simple: solve their issues getting into most [email protected] or 732-910-8854 franchisees who come in to 7-Eleven of the stores. Most of our vendors now at- want to join our FOA so they can share tend our tabletop meetings, as well as our

58 AVANTI SEPTEMBER | OCTOBER 2017 continued from page 64

SPECIAL NACS continued from page 56 Harvey, Love’s Travel Membership Offer Stops said it donated a FOR NCASEF MEMBERS total of $1 million to help with mid- to long- term relief and recovery efforts. • Walmart The National Association of Conven- said it would match customers' donations to ience Stores (NACS), in partnership with the Red Cross with cash or merchandise val- the National Coalition of Associations of ued at up to $10 million, bringing the retailer's 7-Eleven Franchisees, is now offering a special membership to NCASEF members total commitment to hurricane relief this year at the reduced price of $40—an 80 to $30 million, reported CNBC. Target and percent discount off of the starting mem- Home Depot donated $1 million and $2 mil- bership rate of $200. The NCASEF NACS lion respectively to aid hurricane recovery. • Membership Program offers industry-spe- McDonald's said it will donate $1 million to cific programs and services, as well as tra- • NACS Daily News e-newsletter. the American Red Cross in support of the relief ditional association benefits to help you • Potential for consideration as NACS and recovery efforts for communities im- compete and succeed. The benefits of the Board or Committee Member. pacted by Hurricane Irma. McDonald's had special NCASEF NACS Membership Pro- previously announced a $1 million donation to gram include: • One copy of NACS Magazine (monthly publication). the American Red Cross for Harvey relief ef- • Discounts to all NACS events. forts. • Dick's Sporting Goods along with The • Congressional and federal agency repre- • Discounts on all NACS training, educa- sentation through the NACS Government Dick's Sporting Goods Foundation announced tional, and operational products. Relations team. a $5.5 million commitment to support communities impacted by Hurricanes Harvey and • Access to NACS Help Desk, an informa- • And more! tion resource that provides answers to re- Irma.The short-term emergency requests and tailer member questions and facilitates To sign up, all you need to do is com- long-term recovery support ranges from mon- greater industry connections. plete the one-page membership applica- etary donations, to equipment and apparel tion distributed by your FOA and scan and and other much-needed supplies. • The gover- • Full voting rights as a NACS Domestic e-mail, fax, or mail it to NACS. Retail member. nors of Utah, Colorado, Idaho, Montana, Ne- vada, New Mexico and Wyoming recently If you have questions about NACS membership for NCASEF members, please con- agreed to work together to create a network tact NACS Vice President of Member Services Michael Davis [email protected] of recharging stations to allow electric vehi- or (703)-518-4246. You may also contact NACS Retail Membership Manager, cles to travel easily along the 5,000 miles of Eboni Russell, at [email protected] or (703) 518-4271. freeways in their region, reported the Salt Lake Tribune. • People who drink more coffee may have a lower risk of premature death from dis- ease, according to two new studies published in the Annals of Internal Medicine. Researchers found that people who drink two to four cups of coffee a day had an 18 percent lower risk of death compared with people who did not drink coffee. •Kaiser Permanente and Target announced they will launch 31 additional Kaiser Permanente-staffed retail clinics in Tar- get storesacross Southern California. The clinics will offer a broad array of services, including pe- diatric care, women's health care, and monitor- ing and care for chronic conditions like diabetes, continued on page 74

60 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 56 provement” and it believes the lesson have given consumers access to credit learned from these remodels has the cards. More than 171 million con- “potential for broader application sumers had access to credit cards across significant portions of our store backed by major banks and open net- base.” work card issuers in the first quarter of 2017, the most that have had access since 2005. It’s paid off: Americans also Merchant Swipe Fees now collectively have more than $1 Surpass Customer trillion in outstanding revolving debt, often summarized as credit card Overdraft Fees debt—the most in U.S. history. For the first time ever, credit-card interchange fees have exceeded the amount customers pay in overdraft fees, C-Stores Offer Valuable store to others, particularly as a first job. reported MarketWatch. Total overdraft Here are some factors that con- fees totaled $33.3 billion in 2016, just shy Job Opportunities tributed to their positive impressions: of the $33.8 billion fi- Nearly one in five Americans 89 percent learned a lot about how to nancial institutions (19 percent) say they have work with different people; 80 percent collected in credit- “For the first worked in a convenience store learned how businesses are run and card interchange fees, time ever, and the vast majority of them what the challenges are; 70 percent ap- according to a new found their experience to be preciated that their employer offered a credit-card valuable as a career opportunity, analysis of service fees interchange flexible work schedule; and 69 percent from Moebs Services. or in gaining workplace experi- found that the job offered pay consis- Overdraft rev- fees have ex- ence, according to a new na- tent with their experience. enue is up only ceeded the tional survey of consumers Among the survey respondents slightly, but still conducted by the National Asso- who said they had never worked at a amount cus- ciation of Convenience Stores down from its peak tomers pay convenience store, their perception of of $37.1 billion in (NACS). The survey found that the industry also is positive, especially 2009 as banks have in overdra 84 percent of those who worked when tied to first jobs and gaining work been required to get fees.” in a convenience store agree the experience. Nearly nine in 10 (88 per- customer consent to job experience helped them de- cent) say convenience stores offer great opt into overdraft fa- velop a foundation for their ca- first jobs and nearly as many (86 per- cilities since 2010 and customers shy reers. In fact, more than three in cent) say that convenience stores offer away from higher overdraft charges. In four (77 percent) say that they would great summer jobs. recommend working in a convenience sharp contrast, interchange fees have continued on page 64 more than doubled from $18.5 billion eight years ago. The increase in these fees, particularly those shouldered by Share Your Experience and Expertise merchants, represents a “major shift” in Do you have a store experience, some operational expertise, or thoughts how banks, credit unions and other fi- about the 7-Eleven system you would like to share with your fellow nancial institutions have collected fees storeowners? Avanti Magazine welcomes articles from franchisees in the last several decades, said Michael interested in communicating their ideas, knowledge, suggestions, Moebs, an economist and chief execu- opinions, etc. to the franchisee community at large. Please contact tive of Moebs Services. Sheldon Smith at [email protected] or 215-750-0178 if you In recent months, more lenders would like to contribute an article to Avanti.

62 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 62

ing crowd, One Click “In the U.S., an estimated 40 percent Retail stated. C-Store Robberies Though the biggest of food that is bought is thrown out.” Increase subcategories by a significant margin are not surprising—Choco- might be unsure if a particular item still The FBI’s annual report on na- late Candy, Salty Snacks, and okay to eat. In the U.S., an estimated 40 tional crime statistics reveals that last Non-Chocolate Candy—much of Ama- percent of food that is bought is thrown year there were 17,401 robberies in zon’s year-to-date sales growth has been out. Globally, about 1.3 billion tons of convenience stores, a 6.7 percent in- driven by more health-conscious con- food are wasted, which contributes to 8 crease from 2015, reported NACS On- sumers. Dry Fruit Snacks, arguably the percent of annual greenhouse gases. line. For gas or service stations, there healthiest of all subcategories, experi- Beyond the environmental bene- were 8,178 robberies, up 2.1 percent enced 75 percent growth, more than any fits, the board noted that simplifying la- from 2015. The report, “Crime in the bels could save consumers money. The United States,” also found that overall average American family tosses out violent crime rose 4.1 percent last year, $1,500 worth of groceries annually, ac- while property crime fell 1.3 percent cording to the forum. In the UK, that compared to 2015 figures. Additional figure is $947. In addition to the label statistics from the report include: change, the companies have devised a • Of the violent crimes reported to police plan to educate consumers about food in 2016, aggravated assault made up 64.3 waste by partnering with manufactur- percent, while robbery was 26.6 percent. ers, government agencies, and NGOs. • About 7.9 million property crimes were reported, with losses (excluding arson) of about $15.6 billion. other subcategory, while the next three • Law enforcement agencies made top growers are all relatively healthy: Philly Soda Tax Falls Short about 10.7 million arrests in 2016 (ex- Dried Meat Snacks, Snack/Granola Bars, Of Revenue Expectations cluding arrests for traffic violations). and Crackers. Of the larger volume cate- Sales of carbonated soft drinks gories, Salty Snacks grew the most rapidly, have dropped 55 percent inside leaving sugary treats relatively stagnant by Philadelphia after the city instituted a Amazon Increases comparison. 1.5 cents per ounce sweetened beverage Snacks Sales tax in January, reported CNBC. A new study from market research firm In only the first eight months of Companies Make Changes Catalina found people in Philadelphia 2017, Amazon’s sales of sweets and are still buying sugary drinks, but snacks have almost reached the total To Food Expiration Dates they're traveling outside city limits to volume of sales in 2016— a year-over- Fifty of the world’s biggest food and stock up, where sales rose 38 percent. year growth of 42 percent, according to retail companies—including Campbell, The city said it is too soon to judge the research firm One Click Retail. From Wal-Mart, Kellogg, and Nestlé—are tax, and partially blamed the shortfall January to August 2017, Amazon’s changing their expiration labels exclu- on retailers stocking up on products snacks and candy sales totalled $215 sively to “Use by” by 2020, reported before the tax went into effect. million, compared to $240 million for Business Insider. The food retailers, Catalina's study analyzed 109 million all of 2016. Competing in the sweets which are part of the Consumer Goods transactions at sales at grocery, mass and snacks space is a unique challenge Forum Board, voted unanimously on and drug stores around Philadelphia. because it relies so heavily on impulse the change September 20. The board The study also found that the tax buying, but Amazon is using its new determined that confusing labeling is seemed to encourage people to drink Prime Surprise Sweets program and the one of the leading causes of food waste more water. Sales of bottled water use of Alexa to engage the impulse buy- around the world, since consumers continued on page 70 64 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 27

Legislative Update began a “Can the Tax” campaign advocating for a repeal. pre-emptive strike against local control over so-called “soda Soda drinkers now won’t have to pay the much-reviled tax taxes” enacted in other parts of the country, reported The come December 1, which is also the day after the County Detroit News. The Michigan Constitution exempts groceries Board’s deadline to come up with a new budget. That task from the state sales tax, and sponsoring Sen. Pete MacGre- is now more difficult without the $200 million Board Pres- gor said his bill would close “loopholes” he warned could ident Toni Preckwinkle was counting on from the soda tax allow local excise taxes on food and drinks. “We can’t have next year, the article states. a patchwork of certain cities and certain counties tax certain items and others don’t,” said MacGregor, R-Rockford. “This TOBACCO will kill these cities’ economy.” The bipartisan legislation banning local food taxes sailed through the Senate in a 31- LEGISLATIVE 5 vote, with support from all Republicans and six Democ- SUMMARY rats. It now heads to the state House for additional CSP’s Tobacco E-News recently published a consideration. summary update of tobacco legislation affecting State Sen. Rebekah Warren, D-Ann Arbor, spoke out retailers and customers nationwide. against the legislation, arguing it will have “absolutely zero Cigarettes And Tobacco immediate, practical impact” in Michigan. “Because there’s Products Taxation not a single municipality in our state that is actively doing this,” she said. “What this This year, 28 states considered bills to raise policy will do is take one “The Michigan Senate recently cigarette and/or tobacco-product tax rates in more tool out of the tool box some form. Three of these states passed and en- of our local units of govern- voted to prohibit local govern- acted tax changes, including Delaware (50- ment.” The proposal is sup- ments from taxing food, drinks cents-per-pack cigarette-tax increase, 15 percent ported by Michigan food or chewing gum, a pre-emptive increase on OTP and 38-cent tax increase on producers, ranging from the strike against local control over moist snuff), New York (modified the tax on sugar lobby to the vegetable so-called ‘soda taxes’ enacted large cigars from 75 percent of wholesale to 45 lobby, who say it would in other parts of the country.” cents per cigar) and Rhode Island (increased tax eliminate a looming threat rate on cigarettes by 50 cents). Also, Minnesota to farmers and protect the removed the automatic inflator on the excise tax state economy. per pack of cigarettes and froze the cigarette tax rate at $3.04 Illinois County Repeals Soda Tax per pack, as well as reduced the tax cap on premium cigars from $3.50 to 50 cents per cigar. Finally, California voters The Cook County Board of Commission- approved a ballot question last November that raised the ers in Illinois recently repealed a controver- state’s cigarette tax by $2 per pack and increased the OTP sial soda tax, reported the Chicago tax to 65.08 percent. These tax increases went into effect on Tribune. The soda tax—which went July 1, 2017. into effect August 2—levied an ad- E-Cigarettes And Vapor ditional one penny per ounce on Products Taxation sugary drinks. It has garnered crit- icism from local business owners 2017 produced an increasing number of states introduc- and the beverage industry, which ing legislation to assess a new tax on e-cigarettes and vapor continued on page 68

66 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 66

Legislative Update products. Fifteen states considered increasing the total to five states with bills to enact a new tax, and of the bills introduced in these a minimum legal age to purchase at 21. states only two were enacted into law. Delaware passed a new Ban On Tobacco Samples Includes E-Cigs tax on vapor products at 5 cents per fluid milliliter on nico- tine solution and New York passed a tax modification on The FDA recently finalized guidance to make clear that vapor products to 40 cents per fluid milliliter. Also, the it's ban on free samples of tobacco products (like at trade Kansas legislature decreased the excise tax on vapor prod- shows) includes electronic cigarettes, reports The Hill. The ucts from 20 cents per milliliter of e-liquid to 5 cents. FDA said in the 10-page guidance document that its ban on free samples of tobacco products applies to any tobacco Age 21 To Buy product that is subject to FDA regulation, including com- Twenty-seven state legislatures had bills introduced to ponents and parts of tobacco products like “e-liquids” and raise the legal age to purchase tobacco products to either the refillable cartridges for electronic cigarettes. Under the age 19 or 21. So far, the states of Oregon, New Jersey and new guidance, tobacco product manufacturers, distributors Maine have enacted a statewide law to increase the tobacco and retailers can still sell products at a discount, accept age to 21 years old. These states join California and Hawaii, coupons and offer two-for-one deals.

68 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 64 within the city core have increased 13 Total road transportation fuel volumes ties involved in the mass production percent, Catalina found. Inside the city grew by 15.8 percent, while same store and distribution of food, it is expected lines, sales grew nearly 9 percent. road transportation fuel volumes- in- to make it easier to identify the source creased 0.4 percent in the U.S. of potential contamination during food safety scares. Couche-Tard Reports A total of 10 companies said they Net Earnings Increase Food Companies Team will share data and run trials with IBM, including Kroger, Dole Food Company, Circle K parent company Alimenta- With IBM On Blockchain McCormick & Company, Golden State tion Couche-Tard recently announced its Foods, Driscoll's and Berkshire Hath- first quarter ended July 23, 2017 net earn- away's McLane Company. Wal-Mart ings increased to $364.7 million com- also is participating and has worked pared with $322.8 million for the first with IBM since October to track the quarter of fiscal 2017, an increase of Nestle SA, Unilever, Tyson Foods movement of food products. Wal-Mart nearly 13 percent. The company said its and other large food and retail compa- said in June that blockchain trials had total merchandise revenues were $2.8 bil- nies have joined IBM's project to ex- helped it narrow the time it took to lion, an increase of 9.8 percent, and plore how blockchain technology can trace the movement of mangoes to 2.2 same store merchandise revenues in- help track food supply chains and im- seconds from about seven days. creased- by 1.4 percent in the U.S. Couche- prove safety, reported Reuters. Tard further reported that its merchandise Blockchain—which first emerged as and service gross margin increased by 0.1 the system underpinning cryptocur- Mars Pledges $1 Billion percent in the U.S. to 33.3 percent, by 0.4 rency bitcoin—is a shared record of percent in Europe to 42.1 percent and by data maintained by a network of com- To Fight Climate Change 1.8 percent in Canada, to 35.0 percent. puters, rather than a trusted third Chocolate giant Mars is promising party. Because to spend close to $1 billion over the b l o c k c h a i n next few years to fight climate change “Couche-Tard reported same-store rev- can quickly by reducing the carbon footprint of its enue growth of 1.4 percent for Q1 2017.” trace the hun- business and supply chain by more dreds of par- continued on page 72

Want to talk to other franchisees? To find the FOA closest to you. Visit www.NCASEF.com to contact any one of the 46 local Franchise Owner’s Associations nationwide. Want to talk to someone at the national level? Call the NCASEF Vice Chairman in your area: Nick Bhullar, Vice Chairman, Rehan Hashmi, Vice Chairman, Vice President, The National Coalition Board Member, So. California FOA Alliance Of 7-Eleven Franchisees has Franchise Owner’s [email protected] [email protected] 818.571.1711 847-845-8477 Association member Romy Singh, Vice Chairman, National Office organizations in all 33 states President, Eastern Virginia, FOA [email protected] in which 7-Eleven operates. 757-506-5926 831-426-4711 [email protected]

70 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 70 than 60 percent by the year 2050, re- • Farmers—Mars will help farmers ported Business Insider. Its chocolate transform the way they grow crops to brand M&Ms will also promote wind be both more environmentally sound power in a global advertising campaign and in ways that dramatically increase set to run later this year and into 2018. the income of farmers. The huge investment commitment came ahead of a UN General Assembly and Climate Week in New York in Sep- McDonald’s Popular tember, and the timing was meant to With Weed Smokers spur other companies around the world McDonald’s is overwhelmingly the to make similar environmental com- number one fast food choice for tries to gain an edge over Amazon.com, mitments. cannabis consumers in states where reported Reuters. The retailer is part- Mars, which had close to $35 bil- marijuana is legal, reported Forbes. A nering with August Home, a provider lion in sales last year, was one of the new study conducted by cannabis fi- of smart locks and smart home acces- companies that signed a letter in May nancial news website Green Market Re- sories, to test the service. The delivery urging President Donald Trump not to port and Consumer Research Around person would get access to the cus- withdraw from the Paris climate agree- Cannabis found that 43 percent of sur- tomer’s house using a pre-authorized vey respondents one-time pass code and would put away groceries. Wal-Mart said the who bought legal “McDonald’s was chosen as the go-to homeowner would be in control of the marijuana chose entire experience, receiving a notifica- place to eat by 43 percent of survey re- McDonald’s as their tion that the delivery is in progress and go-to place to eat. spondents who bought legal marijuana.” could also watch the real-time process. The second most popular place to eat ment. The company said it would meet was Taco Bell (18 percent) and Wendy’s the environmental commitments set Sunoco Lays Off came in third with 17.8 percent, just out in the Paris agreement as part of its barely squeaking past Burger King at Stripes Workers Before sustainability plan. Mars' $1 billion sus- 17.6 percent. Subway placed fifth at 8.7 tainability drive will include invest- 7-Eleven Handoff percent and Kentucky Fried Chicken hit ments in: Sunoco recently delivered pink slips the list at number six with 5.5 percent. • Renewable Energy—Mars plans to to 112 employees of its Stripes conven- The last four of the top ten were Arby’s, have wind-powered operations in 11 ience stores in Nueces County, Texas, as Chick-Fil-A, Jack-In-The-Box and countries around the world, including the company prepares to hand the chain Carl’s Jr. (in that order). The online sur- Russia, China, Australia, and India, by over to 7-Eleven, reported the Corpus vey, which had 27,500 respondents, was next year. Christi Caller-Times. More layoffs are conducted in 25 markets where mari- • Food Sourcing—The company will planned, but the timing and size of that juana has been legalized with a base invest in sustainable sourcing for ingre- reduction is not yet known, Sunoco told population of 55 million. dients like fish. the newspaper. The 112 positions were • Cross-Industry Action Groups—Mars mostly in the support center for Stripes has set up groups like CocoaAction, an Wal-Mart Testing convenience stores. Sunoco said some industry coalition aimed at making employees have cocoa growing more sustainable, and Straight-To-Fridge Delivery been offered posi- Livelihoods Fund for Family Farming, Wal-Mart is testing a service in the tions with 7- which invests in smallholder farming Silicon Valley to deliver groceries Eleven, and all are across the world. straight to customers’ refrigerators as it being offered sev- continued on page 74 72 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 72 erance packages. Last year, the company the concept at 30 locations in the Bay laid off 161 employees in Nueces County, Area. The founders explained the idea continued from page 60 and Sunoco announced plans earlier this is to preempt what people might need, cholesterol and high year to sell the Stripes convenience stores then use machine learning to con- blood pressure. • Wal- to 7-Eleven for $3.3 billion. stantly reassess the 100 most-needed marthas revamped its private-label Parent's Choice line, adding 120 new items to the baby items in that community. product collection and overhauling 100 existing items in a push to win parents away from rival Walgreens Gets Target, reported Bloomberg. • The MoonPie Green Light To Buy Domino's Researching marshmallow sandwich recently celebrated its Delivery With 100th anniversary with a “Thank You America” Rite Aid Stores Tour to thank customers and consumers for their Drugstore chain Wal- Self-Driving Cars loyalty and sampling factory-fresh “Original greens recently received Domino's Pizza and Ford Motor Recipe” MoonPies. • Dunkin' Donuts Coffee at regulatory clearance to Co. are launching an industry-first col- Home recently launched its all-new Dunkin' buy 1,932 stores—254 stores laboration to understand the role that Donuts Cold Brew Coffee Packs,a “Brew-It- fewer than it had previously in- self-driving vehicles can play in pizza Yourself” take on the category that can be made tended—from Rite Aid for $4.38 bil- delivery, the companies announced. As at home in just three easy steps. • More people than ever are turning to online funeral plan- lion, reported CNBC. The deal, which part of the testing, researchers from ningto fight rising funeral costs and to design widens Walgreens' footprint in the both companies will investigate cus- more personalized services, according to Funer- United States and will help negotiate tomer reactions to interacting with a alwise.com. • The U.S. trademark court office re- for lower drug costs, has been in the self-driving vehicle as a part of their cently decided that Cheerios doesn’t have a works for nearly two years but has delivery experience. This research is monopoly on breakfast yellowand denied the faced regulatory hurdles. Walgreens important as both companies begin to cereal brand’s appeal to claim the color, reported also said it would buy Rite Aid's three examine and understand customers' Quartz. In an August 22 ruling, the judge ex- distribution centers located in Dayville, perspectives around the future of food plained that Cheerios can’t have exclusive Connecticut; Philadelphia, Pennsylva- delivery with self-driving vehicles. claims to the color because all sorts of breakfast nia; and Spartanburg, South Carolina. As part of the research, randomly items also use it in their packaging. • Panera selected Domino's customers in Ann Bread recently announced a new approach to kid food—children can choose almost any Two Ex-Googlers Pitching continued on page 76 item on the Panera menu as a smaller-sized entree, resulting in more than 250 clean menu Pantry Box-Sized ‘Bodegas’ “Domino’s is testing cus- combinations. • Wal-Mart recently introduced a Two ex-Google employees recently tomer reactions to inter- new option that allows customers with EBT benefits to use its Online Grocery Pickup serv- launched a new concept called Bodega, acting with a self-driving, an unmanned five-foot-wide pantry ice and pay when they pick up their groceries. • New survey data compiled by market research box filled with non-perishable items unmanned vehicle for firm Packaged Facts reveal that 60 percent of that can be placed in locations like their delivery experience.” U.S. adults have made apurchase via Amazon apartment buildings, offices, college in the past three months. • Core-Mark Hold- dorms, and gyms, reported Fast Com- ing Company, Inc. announced that its Board pany. An app will allow customers to of Directors has authorized the company to unlock the box and cameras powered repurchase up to $40 million of the com- with computer vision will register what pany's common stock. • BJ's Wholesale Club they’ve picked up, automatically charg- recently announced a $100,000 donation ing their credit card. For the past 10 from the BJ's Charitable Foundation to Feed- continued on page 78 months, the pair has been testing out

74 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 74

Arbor, Michigan will have the oppor- next wave of e-commerce, reported the tunity to receive their delivery order Wall Street Journal. Wal-Mart joined from a Ford Fusion Hybrid Au- Google’s online-shopping marketplace, tonomous Research Vehicle, which will Google Express, in September. While the be manually-driven by a Ford safety deal will add hundreds of thousands of engineer and staffed with researchers. Wal-Mart items to Google Express, it will Customers who agree to participate also give Wal-Mart customers access to will be able to track the delivery vehicle voice ordering through Google’s virtual through GPS using an upgraded ver- assistant, which sits in phones, Google’s sion of Domino's Tracker. They will Wal-Mart & Google Team voice-controlled speakers and soon other also receive text messages as the self- devices. The deal won’t alter how con- driving vehicle approaches that will Up Against Amazon sumers receive their orders, because guide them on how to retrieve their Google and Wal-Mart are joining Wal-Mart will fulfill purchases made pizza using a unique code to unlock forces in a partnership that includes en- through Google Express, the article states. Wal-Mart said it will share con- the Domino's Heatwave Compartment abling voice-ordered purchases from the sumers’ purchase history with Google to inside the vehicle. retail giant on Google’s virtual assistant, challenging rival Amazon’s grip on the enable users to quickly reorder items, a continued on page 78 Visit the NCASEF Website www.ncasef.com continued from page 76

primary function of voice-controlled or- next several years through 2021. How- continued from page 74 ders for commodity shopping. ever, there are six key trends Packaged More, a Feeding Facts reveals that will influence future America member growth in the U.S. market for fresh food bank located in Australia Passes New fruits and vegetables: online grocery Central Virginia. The donation will help Feed- Labor Laws After 7-Eleven shopping and delivery services induc- More's network of partner agencies increase ing produce purchases; further con- their capacity to distribute perishable food Scandal venience with meal kit delivery across the region. • CVS Health announced Employers in Australia, particu- spurring produce gains; community that it is expanding its drug disposal collec- larly franchise chains, face stiff new supported agriculture and farmers' tion program to 1,550 units with the addi- penalties and a beefed up watchdog markets grow from Locavore Move- tion of kiosks at 750 retail pharmacies after reforms to protect vulnerable ment; diet and superfood claims spur nationwide, adding to the 800 units previ- workers recently passed the country’s produce gains; exotic flavor profiles ously donated to law enforcement. • Door- Dash, the technology company connecting Senate, reported the Illawarra Mer- heating up the market; and capitalizing customers with local businesses through cury. The bill was introduced in re- on the Flexitarian Movement. door-to-door delivery, recently announced its sponse to Fairfax Media's exposure of launch in Tampa, Florida. This announcement rampant underpayment and exploita- marks DoorDash's expansion into 45 major tion of vulnerable 7-Eleven workers, as C-Stores Experience metropolitan markets across the U.S. and well as subsequent scandals involving Strong Food Sales Canada. • Consumer products sales and mar- prominent companies like Domino's. Convenience store retailers say keting agency C.A. Fortune announced it will Minister for Employment Michaelia open a Cincinnati office dedicated to serving that in-store sales have performed Cash said the government's Fair Work Kroger's 2,796 stores in 35 states. The strong so far this year, and they are op- Amendment (Protecting Vulnerable Kroger Co. is one of the world's largest gro- timistic about their business prospects Workers) Bill 2017 would protect cery retailers, with fiscal 2016 sales of for the remainder of 2017, largely be- workers from unscrupulous employ- $115.3 billion. • Unata, provider of 1-to-1 cause of the growth in food sales, ac- ers. The bill significantly boosts fines digital solutions for grocers, announced a cording to a survey of U.S. retailers for serious breaches of workplace laws new voice technology integration that will released by the National Association of that will catch employers who force enable grocery retailers to offer voice order- Convenience Stores (NACS). Three in employees to pay back their wages in ing to their customers. • Amazon.com Inc. is five convenience store retailers (60 experimenting with a new delivery service cash. The bill also makes franchisors percent) say that in-store sales in the intended to make more products available and holding companies culpable for first nine months of 2017 were higher for free two-day delivery and relieve over- breaches of the Fair Work Act if they than the same period last year, com- crowding in its warehouses, which will push are found responsible. pared to 20 percent who say sales thus the online retailer deeper into functions han- far were lower. And one in three (35 dled by longtime partners UPS and FedEx, re- percent) say that motor fuels sales were ported Bloomberg. • Panera Bread recently Key Trends Driving Sales Of rolled out a new “sweet facts” fountain bever- higher compared to the first nine age cup that lists the calories and added Fresh Fruits & Vegetables months, compared to 27 percent who sugar in each of its six new craft beverages, as Consumers' consumption of fresh say sales were lower. well as regular cola. • Seventy percent of con- produce grew steadily—albeit mod- Three in four retailers (75 percent) struction firms report they are having a estly at about 1.3 percent—between say they are optimistic about how their hard time filling hourly craft positions that 2011 and 2016. As market research business will perform leading into the represent the bulk of the construction work- firm Packaged Facts forecasts in the fourth quarter. While retailers attributed force, according to a survey released by Au- new report Fresh Produce: U.S. Market several reasons for both strong sales and todesk and the Associated General Contractors Trends and Opportunities, moderate optimism, an increased emphasis on of America. • Camp Bow Wow, the nation's continued on page 80 annual gains will continue over the continued on page 80

78 AVANTI SEPTEMBER | OCTOBER 2017 Visit the NCASEF Website www.ncasef.com continued from page 78

fresh food sales was most often cited. have achieved considerable success, continued from page 78 Greater consumer confidence also has often by emphasizing freshly made or helped grow store sales, according to the made-to-order sandwich programs. largest Doggy Day Care and Boarding retailers NACS surveyed. These include chains such as Wawa franchise in the pet and Sheetz—the latter of which has ac- industry, recently announced its brand new tually trademarked MTO Made To #GiveAFetch campaign, which promotes C-stores Compete With Order as a brand—both based in being a responsible pet parent and community Supermarkets In The Pennsylvania, and both of which have member while celebrating the special things become destinations for their freshly we do for our dogs. • A National Confectioners Sandwich Market made sandwich offerings. Association survey reveals that up to 77 per- As supermarkets ramp up their Jeff Lenard, VP of strategic indus- cent of Americans are likely to purchase prepared-foods assortments, they find try initiatives at NACS, said touch- candy to participate in traditional Halloween themselves increasingly competing screen ordering is now being used by activities this year. • Fashion specialty retailer against not only restaurants but also many of the most progressive c-store Nordstrom, Inc. recently unveiled Nordstrom convenience stores, reported Super- operators. Many c-stores have also em- Local—the company's latest retail concept market News. The c-store industry braced limited-time offers to promote and neighborhood hub where customers overall has long fought against its excitement around sandwiches and can shop and access Nordstrom services in a stereotypical image as a purveyor of test new items, Lenard said, citing The convenient, central location. low-quality food, and many chains Gobbler at Wawa as an example.

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80 AVANTI SEPTEMBER | OCTOBER 2017 ZERO FRANCHISE FEE heat-and-eat meals. These convenient PROGRAM ENDS restaurant-quality meal solutions were created with inspiration from Italian, home- SEI’s Zero Franchisee Fee Initiative ing on the type of fuel purchased, emissions style, Asian, and came to a close on September 30. The com- can be offset by up to 30 percent, SEI said in a “Fifteen new Mexican recipes, pany was offering entrepreneurs an oppor- released statement. As part of the one-year the company said. locally prepared, tunity to own a 7-Eleven by waiving the test, 100,000 trees will be planted across the Prepared in local refrigerated franchise fee—a savings of up to $80,000— United States in cooperation with the Arbor kitchens and deliv- meals are being on select U.S. stores. The offer was also open Day Foundation. ered daily to par- delivered to to existing 7-Eleven franchisees looking to ticipating 7-Eleven grow their retail business by adding stores. stores in select SEI UNVEILS THE HOT stores in select SEI introduced the zero-fee program in 2015 markets.” STUFFED WAFFLE markets, these following a period of rapid growth and New to 7-Eleven stores is the on-the-go options for breakfast, brought it back in 2016. During that time, the sweet and savory Pills- lunch and dinner have been avail- company franchised more than 200 stores. bury Stuffed Waffle, able in the refrigerated case Currently, approximately 200 more eligible served hot out of since September 11. Meals stores available to franchise are located in the oven. De- can be heated at the store for metropolitan areas across the country in- veloped and immediate consumption or cluding cities like Buffalo, Richmond & Jack- co-branded with taken to-go. Suggested retail price sonville. SEI said because these stores Pillsbury, 7-Eleven’s first ranges from $3.99 to $4.99. typically have lower sales volume compared stuffed waffle combines a crispy, Here is what's new on the 7-Eleven to the national average, they may qualify for maple-flavored waffle on the outside and a menu: additional, limited-time financial support. fluffy egg omelet, savory pork sausage and • Italian—Chicken Parmesan, Cheesy cheddar cheese on the inside. Suggested retail Tortellini, Cheese Lasagna with Meat Sauce, SEI CARBON price on the new exclusive stuffed and Spaghetti Bolognese REDUCTION TEST waffle is $2.49. • Homestyle—Macaroni and Cheese, and PROGRAM To reduce carbon The Pillsbury Stuffed Homestyle Turkey Chili Waffle combines three SEI said it is further- emissions, 7-Eleven • Asian—Asian-style Beef and Broccoli Bowl popular morning foods— ing its commitment to re- • Mexican—Beef Enchiladas with Rice, will plant 100,000 waffles, sausage and duce its energy footprint Chipotle Chicken Bowl, and Deluxe Verde trees across the U.S. eggs—into one flavorful, with a test program called Chicken Enchiladas with Rice in cooperation with handheld breakfast that is RENEW at 95 stores in • Breakfast Bowls—Chipotle Steak and Egg the Arbor Day easy to eat for hungry, and Portland, Seattle and Madi- Bowl, Mile High Breakfast Bowl, and Early busy, people on the go. At a son, Wisconsin. RENEW is a Foundation. Riser Scrambler Bowl suggested retail introductory reduced emissions program the price of $2.49, the cost is comparable company launched in collaboration with 7-ELEVEN DONATES to, or lower than, many fast-food restaurant GreenPrint, a company promoting sustain- breakfast sandwiches. HORSE TO BALTIMORE ability through the retail gasoline, fleet and POLICE consumer product industries. Customers will In late September, the mayor of Balti- be able to reduce emissions by simply pur- NEW CHEF-INSPIRED, more, Maryland, the Baltimore po- chasing the same fuel they have always LOCALLY MADE MEALS lice commissioner, and employees pumped at 7-Eleven stores. GreenPrint will SEI has turned of 7-Eleven wel- calculate tailpipe emissions from gasoline sales up the heat on its pre- comed Slurpee, a to determine the amount to invest in certified pared-food program chocolate draft carbon reduction projects to help neutralize with 15 new locally continued on those emissions in the atmosphere. Depend- made, chef-inspired, page 84

AVANTI SEPTEMBER | OCTOBER 2017 83 Visit the NCASEF Website Visit the NCASEF Website www.ncasef.com www.ncasef.com continued from page 83

1.8 million individual prizes available at par- an instant win game piece redeemable for a the aftermath of Hurricane Harvey, which ticipating 7-Eleven locations. In addition to prize; an instant win food or beverage prize devastated parts of Texas and Louisiana, do- the sweepstakes and product placement in- redeemable at 7-Eleven; non-winning ticket nating $150,000 to the American Red Cross, year. The Baltimore Police, which has one has been encouraging customers to support the side UFC’s world-famous Octagon, 7-Eleven redeemable for a 10% discount on a purchase water, food and supplies to shelters and over of the oldest mounted units in the country, American Red Cross Hurricane Irma relief ef- will also have a presence on UFC.com and at UFCStore.com or a free 7-day UFC FIGHT 1,200 care packages to employees impacted will use Slurpee and his horse counterparts forts. Customers can add $1.00 to their in-store live-event programming, as well as being in- PASS subscription. Instant win prizes include by the storm. as a way to boost the police force and its purchase at stores nationwide or donate online tegrated across multiple UFC-based social a grand prize 2017 Harley-Davidson Motor- community relations. at https://www.7-eleven.com/hurricane-relief. and digital platforms. cycle, five Replica UFC Championship belts, 7-Eleven provided similar support in NATIONAL COFFEE DAY The sweepstakes, which runs through 100 Xbox One EA UFC 2 games and more. 7-Eleven stores nationally celebrated horse 7-Eleven donated to the city’s SEI UFC SPONSORSHIP December 31, 2017, allows fight fans in the National Coffee Day on September 29 and Mixed martial arts organization UFC mounted police force, reported the Balti- U.S. and Canada to purchase and/or collect PLEDGE TO IRMA VICTIMS International Coffee Day on October 1 by and SEI recently signed a new agreement in more Sun. The 4-year-old horse, which has UFC branded 30 oz. Big Gulps with designs SEI has pledged a $150,000 donation to giving a free any-size cup of coffee to each of which 7-Eleven will serve as the global been training for the past several months, featuring UFC gloves, a UFC Octagon and se- the American Red Cross for Hurricane Irma its 7Rewards members. The National Coffee brand’s first-ever “Official Convenience will stand in for a horse—also named lect UFC athletes. Fans can also purchase a 20 disaster relief efforts. With over 800 stores in Day offer was redeemable one time between Store” throughout the United States and Slurpee—that 7-Eleven gifted to the Balti- oz. UFC/7-Eleven Travel Mug that features the Florida, SEI said it also gave back to the com- 12:01 a.m. local time Friday, September 29, Canada. As part of this collaboration, the two more police years ago. “Slurpee Sr.” served UFC’s logo. Customers who purchase a Big munity it serves by donating 4,800 cases of 7- and 11:59 p.m. local time Sunday, October brands launched a peel-to-win “BIG GULP” for nearly 10 years starting in 2006 and re- Gulp drink will obtain a peel-to-win game Select purified water for free distribution at “SEI pledged $150,000 to hurricane 1. If not used, the coupon expired on Sunday, sweepstakes on September 1, with more than tired to the hills of Pennsylvania earlier this piece containing one of the following options: three Florida locations. In addition, 7-Eleven Irma relief efforts in Florida.” October 1 at 11:59 p.m. local time. Flavorful Teavana Craft Iced Teas Orbot Flying LED Balls Teavana’s six new bottled craft iced teas are a family of expertly Will Fly Off Your Shelves blended iced tea, crafted from the finest teas and botanicals and pre- Premiering at 7-Eleven stores nationwide, Orbot Flying LED Balls mium, natural fruit flavors. Inspired by the popular iced tea flavors sold are the coolest new techno-gadget out there today. Indoors or out- in Starbucks stores, Teavana Craft Iced Teas are filled with vibrant flavor side, safe and durable, your customer's kids, in each refreshing sip. families and friends will spend hours to- Teavana is available in four flavors with just gether being entertained with their Orbot the right amount of sweetness: Pineapple Flying LED Balls. With no remote or batter- Berry Blue Herbal Tea, Peach Green Tea, ies necessary, it's easily rechargeable with Mango Black Tea, and award-winning Pas- the included USB cable. A party favorite, sion Tango Herbal Tea (the 2017 Global Tea the no-heat LED-lighted ball will have cus- Championship Silver Medal Winner). Two fla- tomers amazed at the fun created night vors are available with no added sugar: and day for Meyer Lemon Black Tea and Strawberry Apple Green Tea. everyone. Expertly blended Teavana Craft Iced Currently available Order DSD, or for more information contact inspired by popular flavors. Randy Ornstein at (479) 381-9024 or at in red, blue and [email protected] clear illuminating colors, customers will continue to collect Orbot Flying LED Balls! All new shapes and images will be made Party In Paradise With Swisher available first to 7-Eleven stores for the rapidly approaching holiday season. Sweets’ Boozy Mango Make your Minimum orders are 48 units (One Master Mangos just became a little sweeter with the limited edition twist on sales fly sky Case of 8 Store Displays, each containing high with the Swisher Sweets’ classic mango cigarillos. Swisher Sweets Limited Edition 6 units with 3 colors). new Orbot Boozy Mango cigarillos pair the ever-popular mango with the tropical Due to strong de- Flying LED sweetness of guava. Ball. mand, maximum orders Swisher Sweets Boozy Mango is available for a limited time in a re- are one master case of 48 units per sealable 2-count pouch with the “Sealed Fresh” guarantee and is ready store. Cost is $4.90 per Orbot Flying for shipment to stores nationwide. It is offered in “Save on 2,” “2 for .99” and “2 for $1.49” options. continued on page 88 Limited edition blends continue to be customer favorites and this season they won’t be able to resist the smooth, sweet taste of Boozy Mango! For more infor- Welch's Natural 100% Grape mation, contact your Swisher representative at 1-800-874-9720. Juice 25% Off Introductory Offer

Limited Welch's has introduced Natural 100% Grape Juice in a Edition Boozy convenient 14 ounce PET single serve. Order now to take ad- Mango: vantage of the “25 percent off for first order only per store” guava and the deal, valid from October 30 to December 31, 2017. Non-GMO, ever-popular mango. no artificial ingredients, a straight from the vine taste, and 50 percent margin. Fill the 100% Grape Juice void in your assort- ment and satisfy the growing demand for better for you beverages with Welch's Natural 100% juices. Welch’s is the #1 Grape Juice in the U.S.

AVANTI SEPTEMBER | OCTOBER 2017 87 continued from page 87

LED Ball, $9.99 SMR price. GP is 51 percent. All orders will be deliv- purchase three different qualifying flavors in either Liquid Creamer ered directly to your stores. Singles or Pump Bottle formats, you can receive a $5 per case rebate To order call Jeff Dole at DS Tiger, 214-543-7236. on every three cases you buy—up to $150. It’s all happening on CM- FeelTheLove.com. Amp Energy Pump Bottle Creamer Organic LDU—2 Bottles Size—1.5liter bottle Exclusively Coffee-Mate Hazelnut Pump Bottle Creamer—341594 At 7-Eleven Coffee-Mate French Van Pump Bottle Creamer—341545 Coffee-Mate Original Pump Bottle Creamer—341578 Amp Energy recently NEW Pump Bottle Creamer unveiled a new organic LDU—2 Bottles energy drink lineup—Amp Size—1.5liter bottle Energy Organic—for con- Coffee-Mate Irish Cream—964171 sumers who want the en- Amp Energy Organic, exclusively at Coffee-Mate Salted Chocolate Caramel—964163 ergy boost and great taste 7-Eleven stores 2/$3 until early 2018. of Amp Energy, but with simpler, organic ingredients. Amp Energy Organic launched with four Increase Store Profits With refreshingly delicious flavors, available exclusively at 7-Eleven stores SweeTarts Soft & nationwide. The new “Organically Unstoppable” product, which is USDA-certified organic, offers Citrus, Pineapple Coconut, Grape and Chewy Ropes Tropical Burst flavors, all which boast just five simple ingredients: or- SweeTarts Soft & Chewy Ropes offer a ganic cane sugar, organic caffeine from green coffee beans, carbon- stimulating fusion of sweet and tart with a ated water, citric acid and natural flavors. product experience edge that sparks new The ingredient list is not the only thing getting an update. The new possibilities in candy. Available in Cherry Amp Energy Organic features a newly designed 12-ounce can with Punch in a 5oz peggable bag, SweeTarts imagery that evokes refreshing, organic energy in four colors to reflect Soft & Chewy Ropes capitalizes on the the unique and delicious flavors. Amp Energy Organic is proven SweeTarts brand that sold at a suggested retail price of $1.99 and promo- has top selling confections tional price of 2/$3 at 7-Eleven stores nation- offerings with Market- wide, expanding to additional retailers across ing/Media Halo on Enjoy bigger sales with the U.S. in early 2018. the Brand. Increase SweeTarts Soft & Chewy Ropes. your store profits— Coffee-Mate store margin increases to 50.3 percent (before McLane markup). SweeTarts continues ‘Savor steady four-year growth fueled by new The Flavors’ items. SweeTarts brand 2016 volume sales is up 12.2 percent vs. a year ago, and SweeT- Rebate Promo ARTS Soft & Chewy Ropes is #4 in the top 10 of Liquid creamer usage away from Sugar Peg dollar volume growth. Suggested SRP is home is on the rise and Coffee-Mate $1.79, Unit Cost is $1.14, Intro ED Bill-Back is $0.25, Net makes it easy for you to offer the flavor Don’t miss out on Cost before McLane upcharge is $0.89, $GP/%GP is variety your customers crave. From Octo- Coffee-Mate’s $5 per case rebate. $0.90/50.3%. ber 1 through December 31, when you

88 AVANTI SEPTEMBER | OCTOBER 2017 foa events

Midwest FOA/Alliance Midwest FOA of 7-Eleven Fran- Michigan Holiday Show National Coalition chisees FOA Illinois (venue to be announced) NCASEF Board of Directors Holiday Show December 6, 2017 Meeting Chicago O’Hare Marriott Phone: 847-971-9457 Four Points by Sheraton Dallas Chicago, Illinois board Fort Worth Airport North November 1, 2017 UFOLINY Holiday Party Coppell, Texas Phone: 847-971-9457 (venue to be announced) meetings February 7-9, 2018 December 7, 2017 7-Eleven FOAC Phone: 516-647-4617 National Coalition National Coalition Holiday Party & Affiliate Meeting Board of Directors Trade Show Columbia Pacific FOA Four Points by Sheraton Dallas Meeting Fort Worth Airport North (venue to be announced) Holiday Party San Juan Marriott Resort Coppell, Texas November 16, 2017 (venue to be announced) San Juan, Puerto Rico February 5 & 6, 2018 Phone: 847-353-9999 December 8, 2017 May 9-11, 2018 Phone: 503-901-1677 San Francisco/ Monterey Bay FOA Rocky Mountain FOA San Diego FOA Delaware Valley FOA Holiday Party Holiday Party Holiday Party Annual Trade Show Viejas Casino & Resort Caesars Palace Atlantic City (venue to be announced) Cheyenne Mountain Resort Alpine, California Atlantic City, New Jersey December 1, 2017 Colorado Springs, Colorado December 16, 2017 April 4, 2018 Phone: 510-895-6984 December 8, 2017 Phone: 719-339-9518 Phone: 619-713-2411 Phone: 262-275-3086 Greater Seattle FOA/ Pacific Northwest FOA Metro New Jersey FOA FOA of Greater LA/ Holiday Party San Diego FOA Holiday Party Trade Show (venue to be announced) (venue to be announced) Pechanga Resort and Casino December 2, 2017 December 15, 2017 Temecula, California Phone: 425-308-1216 Phone: 908-232-1336 March 7, 2018 Phone: 909-822-4122 FOA Board Meeting Dates

7-Eleven FOAC FOA Of Greater Los Angeles UFOLINY Phone: 847-353-9999 Phone: 909-822-4122 Phone: 516-647-4617 November 30, 2017 November 21, 2017 General Membership Meetings December 21, 2017 Metro New Jersey FOA November 28, 2017 Columbia Pacific FOA Phone: 908-232-1336 Board Meetings Phone: 503-901-1677 September 13, 2017 November 21, 2017 November 9, 2017—Board Meeting November 22, 2017

90 AVANTI SEPTEMBER | OCTOBER 2017