SAN ANTONIO – The National Coalition of Associations of 7-Eleven Franchisees (NCASEF) — an independently elected advocacy group for 7-Eleven franchisees — requested that 7-Eleven Inc. (SEI) reconsider a mandate that all stores return to 24-hour operations. But so far, SEI has not responded to the Coalition’s request.

NCASEF said franchisees should be granted a waiver from returning to overnight operations due to “a historic shortage of employees” in addition to higher operating costs, lower gross margin and lower net profit.

Eric H. Karp, general counsel for NCASEF, said SEI has even notified franchisees of significant shortages in the supply chain it controls because many of its vendors are also facing labor shortages. SEI’s parent company reported that the merchandise gross margin of all US stores in 2020 was its lowest in at least 15 years, meaning franchisees are receiving a smaller and smaller piece of a shrinking pie, Karp added.

“In exchange for permission to close overnight, the company is requiring franchisees hand over a greater portion of their gross profits,” Karp said. “What 7-Eleven refers to as an ‘appropriate adjustment’ to the gross profit split amounts to an improper penalty imposed on franchisees based on circumstances well beyond their control.”

NCASEF said many franchise owners are forced to operate registers overnight after managing the business during the day because they are unable to fill open shifts. Michael Jorgensen, NCASEF executive vice chairman, said the situation is unsafe and unsustainable.

“We hope the Federal Trade Commission is taking note of the heavy-handed way SEI is handling this situation with its franchise owners as part of its review of the Franchise Rule,” he said.

NCASEF is a trade association for 7-Eleven franchise operators in the United States. The organization is comprised of 41 separate independent franchise owner associations collectively having more than 4,400 7-Eleven operators as members.