7-Eleven’s 24-hour schedule combined with its expansion into the quick service restaurant space leaves franchise owners “feeling the squeeze”
7-Eleven franchisees are asking for a reprieve from the brand’s famous 24-hour operating schedule as rising costs and worker shortages stretch their resources thin.
The convenience store franchise, with over 71,000 locations worldwide, suspended its round-the-clock operations during the COVID-19 pandemic curfews. But SEI, 7-Eleven’s parent company, recently announced it plans to resume full-time operations on May 24th.
The National Coalition of Associations of 7-Eleven Franchisees (NCASEF) published a letter on its website seeking to reverse this decision for the adverse effects it has on franchisees.
The letter says, “There has likely never been a time when it has been as difficult as it is today to be a 7-Eleven franchise owner. We are facing a crippling labor shortage, higher operating costs, lower gross margin and lower net profit. In light of the current situation, The National Coalition is asking SEI to reverse their decision, and allow those franchisees who can’t safely accommodate a 24-hour schedule to close overnight.”
The overnight profit is barely enough to cover the costs of keeping the store open and paying graveyard shift workers a higher wage, the letter goes on to say.
7-Eleven is not alone in its battle with worker shortages. Restaurants and businesses offering mostly minimum wage jobs are struggling to hire employees, despite high unemployment rates and a shaky pandemic economy.
The Bureau of Labor Statistics reported in mid-April that there were 9.7 million Americans looking for work.
So, why the shortage?
The reason for the labor shortage is still in dispute, but there are several potential causes commonly cited. According to Business Insider:
- Stimulus checks and unemployment are disincentivizing people from returning to work
- Contracting COVID-19 is a prominent health concern for service employees
- Many adults have to stay at home to take care of children or other family members
- People are waiting for better paying opportunities
7-Eleven’s struggle is exacerbated by its attempt to expand into the quick service restaurant space with freshly prepared grab-and-go food options, which requires more labor and supplies than its traditional convenience store operations.
“7-Eleven wants to be a place that customers think of for fresh food, but our Franchise Agreement is based on a convenience store model, not a quick-service restaurant model. The structure of the agreement is flawed.” said Jas Dhillon, NCASEF Treasurer, in the franchisee letter.
In response to the letter from NCASEF, SEI released a statement that said, “7-Eleven remains focused on supporting and promoting franchisee profitability, safety, and success. Since the start of the pandemic last year, 7-Eleven has provided Franchisees with more than $173.5 million in investment, savings, and support as they own and operate essential businesses on the front lines of their communities.”
Extracted from 1851 Franchise