7-Eleven to buy Stripes

[jamcool]

I suspect one of the reasons 7-11 is buying Speedway is to phase out their franchise system. From what I read in the retail sites there is a constant battle between 7-11 and its franchise operators, most who own a store or two, about store upgrades, payments, cleanliness...etc. Their competitors-Circle K, QT, Wawa, Casey’s-own all or a majority of their stores, which means they have uniform standards on cleanliness, design, store upkeep

[storewanderer]

The problem is with 7-Eleven's US Store Network. If they tried to run many of these stores as corporate operated sites they'd end up shutting down because they would lose money. The franchise model works because the franchisee, franchisee's spouse, and other family members/friends of the franchisees work in the store.

Back in the 90's and 00's 7-Eleven went with a model where it got to the point where one store didn't make enough money for the franchisee who was an absentee-franchisee who hired a store manager, so franchisees started to take on multiple stores (and kept hiring store managers). There are still some franchisees with multiple stores but it has phased more back to the situation of a single store franchisee who is basically an owner-operator of the store spending 12-16 hours of the day in the store and using family members as a significant source of labor.

Though the franchisees seem to be in constant tension with the franchisor there are quite a few people who have had these franchises for many years so they must be happy with the system. And the failure rate of 7-Elevens is very low, perhaps one of the lowest of any franchise.

They would be wise to keep Speedway as corporate operated with Speedway's proven system but something tells me the temptation to franchise stores is just too much for them to resist.

[pseudo3d]

I suspect one of the reasons 7-11 is buying Speedway is to phase out their franchise system. From what I read in the retail sites there is a constant battle between 7-11 and its franchise operators, most who own a store or two, about store upgrades, payments, cleanliness...etc. Their competitors-Circle K, QT, Wawa, Casey’s-own all or a majority of their stores, which means they have uniform standards on cleanliness, design, store upkeep

Some of those aren't exactly 1:1 comparisons. QT, in my experience, builds nice, flagship stores with gas pumps along major highways, whereas 7-Eleven doesn't build "flagship" stores (except the larger stores they acquired from other operators, 7-Eleven OK, Stripes, etc.), the new-builds are actually quite small. Plus, unlike most of those, 7-Eleven has a lot of stores, especially in the northern areas of the United States, that are either storefronts or non-gas stores, which are in varying states of repair.

[storewanderer]

Some of those aren't exactly 1:1 comparisons. QT, in my experience, builds nice, flagship stores with gas pumps along major highways, whereas 7-Eleven doesn't build "flagship" stores (except the larger stores they acquired from other operators, 7-Eleven OK, Stripes, etc.), the new-builds are actually quite small. Plus, unlike most of those, 7-Eleven has a lot of stores, especially in the northern areas of the United States, that are either storefronts or non-gas stores, which are in varying states of repair.

The new 7-Eleven builds that are happening right now in OR/WA have a physical plant that is along the lines of a QT about 20 years ago. So they are getting there. The problem is with the execution. It is rare to see broken equipment in QT.

Tons of non-gas, 2 pump, or strip mall 7-Elevens in the west as well.

[Alpha8472]

Franchisees are trying to get 7-Eleven to drop the 24 hour requirement. As bad as 7-Eleven is, I can always rely on them being open all day.

Many 7-Eleven stations do not have gas in the San Francisco Bay Area and are really run down.

[mbz321]

Since 7-11 now owns both Speedway and Sunoco, it looks like the Speedway stations are going to get dumped here in the Philadelphia region. No mention of what brand they will change to (I guess 7-11 still plans on using the Speedway brand elsewhere?). Not a real surprise though as I don't think Speedway has opened any new stations since they acquired them from Hess in 2014. Several of them don't even have mini-markets, just a kiosk to pay at with quick grab and go things. I know of one location that has become a Marathon (a new 'name' to the area, a local owner of a few stations in the suburbs switched over from Gulf to Marathon, but thats about it), but that was before this deal was officially announced.

https://www.mcall.com/business/mc-biz-c ... story.html

As a side note, I'm still waiting to see what happens to the many (although a ton have closed over the years unable to compete with Wawa) stand-alone 7-11's in the area (only a few of which sell gasoline). Almost all of them are near existing Sunoco stations (some of which have become dual-branded as 7-Eleven already, dropping the APlus banner.)

[Alpha8472]

The FTC Chair says that this merger violates antitrust laws and will be investigated.

[babs]

The FTC Chair says that this merger violates antitrust laws and will be investigated.

The FTC is a joke. They don't go after the mergers that truly reduce competition but go after those that make little difference. Seriously, they're worried about less competition for places to buy junk food?

[jamcool]

Less competition in fuel sales - 7/11 has a fuel distribution subsidiary called SEI Fuels that sells to other wholesale accounts. It would mean that 7-11 would put priority over supplying its own stores-including Speedway-than other accounts.

[storewanderer]

The FTC Chair says that this merger violates antitrust laws and will be investigated.

The FTC is a joke. They don't go after the mergers that truly reduce competition but go after those that make little difference. Seriously, they're worried about less competition for places to buy junk food?

The issue is regarding fuel sales, not the convenience stores.

I don't understand as this release yesterday says the deal was completed?
https://www.prnewswire.com/news-release ... 91764.html

So then the FTC people come out and say the deal was not approved and is "at the two companies risk." What does that mean? What is this FTC? Is it some kind of a joke now? Before a merger didn't go through without FTC Approval. Are they such a lame duck now that mergers just go through anyway without their approval?
https://www.reuters.com/business/energy ... 021-05-14/

Let's be fair, the FTC has screwed up on these mergers for years now. Look at the whole Haggen fiasco and how many divested stores Albertsons ended back up with. Maybe they should have just bypassed the FTC too when they merged Safeway. If 7-Eleven gets away with bypassing the FTC like this, it will set a real example going forward for very anti-consumer mergers to take place. This may just be gas stations but when it is something else like hospitals or banks or utilities trying this sort of thing and saying we can do it since the gas stations did, you may be more concerned.