7-Eleven Franchise Owners Claim $1 Coffee Is Subsidizing Company Marketing at Their Expense

National Coalition Requesting Elected Franchisee Representatives Have a Voice in Promotional Pricing

SAN ANTONIO--()--Few promotions drive interest like $1 coffee, but 7-Eleven franchisees are not the ones benefiting from the chain’s aggressive promotion of its low-priced coffee or other specials offered through its mobile app. The National Coalition of Associations of 7-Eleven Franchisees (NCASEF), an elected, independent body representing more than 7,000 7-Eleven franchised locations in the U.S., is requesting the 7-Eleven corporation (SEI) give elected franchisee representatives a voice in determining promotional pricing.

In the contract they sign with SEI, franchise owners are granted control over the pricing in their stores. But, mobile technology has different rules, and NCASEF believes franchisees are largely being bypassed when decisions about the cost of digital promotions are made.

“7-Eleven’s franchisee council, the NBLC, is told in advance about digital promotions, but they are not an elected body and have no independence from the brand to push back,” said Jay Singh, NCASEF chairman and a Texas franchise owner. “Our association represents the interests of all franchisees and should be included in the discussion about how promotional items are priced through the app and how money from the ad fund is being allocated.”

Unlike product promotions that are mostly paid for by vendors, $1 coffee and $.49 Slurpees are considered “proprietary promotions,” whose costs are borne by franchisees. Only customers that have downloaded the 7Rewards app qualify for low-priced beverages, and franchisees say the digital promotions do not draw new customers to their stores like traditional advertising does.

SEI is in the midst of an aggressive growth strategy, with a goal to have 20,000 U.S. stores by 2027. The company has also been investing heavily in technology and recently announced it has signed up 25 million loyalty members. At the same time, SEI under-spent its 2018 advertising budget by $4.9 million.

“We are concerned that 7-Eleven is relying on digital promotions at the expense of traditional advertising and marketing that is proven to drive business to our stores,” said NCASEF Executive Vice Chairman Michael Jorgensen, a Florida franchisee. “The high-level numbers the company provides us do not offer a transparent view into how our ad money is being spent. Most other franchisors include elected franchisees in decisions involving the money they contribute to their national ad fund. It’s time 7-Eleven did the same.”

About the NCASEF: The National Coalition of Associations of 7-Eleven Franchisees is the national trade association for 7-Eleven franchise owners. Originally founded in 1973, NCASEF is comprised of 41 Franchise Association members who represent more than 4,400 7-Eleven owners in the U.S.

Contacts

Matt Ellis, Ellis Strategies, Inc.
matt@ellisstrategies.com | 617.278.6560

Contacts

Matt Ellis, Ellis Strategies, Inc.
matt@ellisstrategies.com | 617.278.6560