Unit owners say their share of revenue is steadily shrinking under the brand’s growing control
At their annual convention in Florida last month, 7-Eleven franchisees weren't shy about voicing their many frustrations with franchisor 7-Eleven Inc. over an increasingly binding contract they say lessens their ability to make money.
In a recent report, The New York Times detailed unit owners’ gripes with 7-Eleven taking a progressively larger cut of what was once a split-profit business model and their lack of ability to negotiate a new contract.
The contract, which the brand is requiring many franchisees to sign by the end of 2018 or face further revenue shrinkage, calls for a $50,000 franchise renewal fee, mandates that stores stay open on Christmas, and limits franchisees to suppliers that cannot guarantee the best prices for in-store items.
Owners also claim that 7-Eleven’s own branded items are causing further revenue loss. While the items usually have a price point lower than that of their name-brand counterparts, owners say customers aren’t always opting for the items the brand is requiring its franchisees to stock.
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