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lifted, we continued working together, changing our focus to maximise sales, coaching a franchisee on how best to achieve profitable and sustainable business performance.” This level of coaching, with its individually tailored, need-based approach to developing franchisees in every store, is an example of how 7-Eleven Australia’s model differs from many franchise businesses. “At the core, the success of our franchise model is in the sharing of the gross profit derived from store sales, with both the store and the support office jointly rewarded by profitable sales,” Mr Lord said. “As a franchisor, we pay for rent, utilities, equipment, technology, marketing, maintenance, training systems and HR systems, and provide field support. Relieved of all this cost and distraction, a franchisee is free to concentrate on employing a great team. “With wages a significant cost in operating a 24/7 business, the 7-Eleven Australia system also has safeguards in place to ensure franchisees can fund a fully costed roster, even when business is tough, such as during Covid. “It’s vital that our businesses can afford a fully costed roster at award rates, including paying the franchisees for the hours they work in the store. Therefore, to support our franchisees, we have a minimum-gross-income mechanism through which we top up the income of stores that might be experiencing a downturn in gross profit below the required threshold to support the wage costs. “In 2020, Covid led to an increase in the number of stores needing this income support. While this was an unfortunate outcome, the peace of mind provided by the financial support for stores that need it strengthens the partnership. “Every franchisee has access not only to this, but also the company’s other sophisticated systems, robust processes and business support team.” "We’re getting a lift in non-fuel sales with a lot of people going to the servo and buying food, coffee and muffins at a rate that we wouldn’t normally see." Setting the course Mr Lord continued: “Covid has driven an accelerated change to our way of living, and those in retailing who could keep pace have really benefited. “The 7-Eleven mission of meeting the ever-changing needs of the convenience customer pushed our business to respond in a safe and locally responsible manner.” This response, Mr Lord adds, included considerations of enhanced cleaning, Covid capacity limits, increasing stock of daily essentials and enabling frictionless transactions, and with all these requirements actioned rapidly, the local neighbourhood shopper – often not a frequent convenience customer – recognised the trustworthy, convenient shopping options on offer. “Our new daily delivery supply chain got a real workout from day one as we had to flex and adapt to ensure we had the right products in the quantities needed to meet customer demand. “We accelerated about five years of customer focused digital development plans into 12 months. We also built the My 7-Eleven app, expanded the reach of our delivery service and understood how micro market formats fit within our network strategy. “Now, we’re looking forward to seeing the benefits to our customers and franchisees as our digital transformation continues to progress.” Looking to the horizon 7-Eleven currently has a mix of more than 700 company-owned and franchised outlets across Australia, including 238 in Victoria, 236 in NSW/ACT, 194 in Queensland, and 42 in the company’s newest state, Western Australia. Between them, those serve an average of seven customers every second across Australia. “During 2021 we’ll be seeing our footprint grow by at least another 30 stores, and we’re challenging ourselves to evolve how we work to better keep our customers at the heart of everything we do,” Mr Lord said. “We’re also speeding up the pace of innovation across format, offer, product, digital and customer engagement. “Our hunger for rapid development and innovation in convenience retailing is here to stay and our pipeline is currently full of exciting products and services to deliver to our customers. “From our perspective, 2021 and beyond looks really exciting.” MAR/APR, 2021 CONVENIENCE WORLD 61 FRANCHISING