President’s Message – January 2016

Thank heaven for a wonderful 2015 and the increase in sales that came with it. Now 2015 is behind us and we are looking forward to another prosperous year in 2016 with increased sales and gross profit. 2016, however, comes with its own challenges, many of which are beyond our control. There is, for example, the $1 per hour increase in the minimum wage and the new requirement in California for the franchisee to pay the mandatory 3-day per year sick leave for each employee. This loss of franchisee income is not shared by 7-Eleven and is the sole burden of each store owner.

As a business person I would like to have a plan in place to recover these losses and go beyond to make 2016 even better than 2015. I have received numerous calls from other franchisees regarding this issue as well. Some of the plans to accomplish this include ideas from 7-Eleven, Inc. 7-Eleven wants to drive customers into the stores with value offerings to the customer. In the month of January a 50¢ promotion for small coffee will help drive customers into our stores. Beginning in February there will be a 10¢ per cup increase in coffee. This increase in retail will help improve our gross profit dollar in the hot beverage category. In addition for the year there will be increased funding by vendors on promotions.

At the store level the franchisee can revisit their work schedule to make sure they have appropriate labor hours allocated for the business. There may be places to cut some hours without jeopardizing their business.

As many of you are aware stores in the Greater Los Angeles Zone are currently getting remodeled. There are also expanded assortments in merchandise along with guided replenishment. We are hoping that remodeling stores, expanded merchandise assortments and guided replenishment will increase sales and help grow our businesses, and therefore improve our bottom lines.

For those not aware 7-Eleven, Inc. has hired an independent company to conduct interviews of various franchisees regarding the new contract. They are getting feedback from franchisees to see what they want to see in the new agreement. The corporation has not disclosed anything as of yet but I will keep you informed.

Just a reminder that the 7-Eleven Experience Day in Las Vegas will be February 2nd through February 5th. Also, National Coalition Board of Directors meeting will be on held in Monterey Bay February 15th – 19th.

~MSL