MANILA - Exclusive 7-Eleven licensor in the country Philippine Seven Corp said Thursday it reduced its target new branch opening this year and offered a refund to franchisees that haven't started construction works due to the coronavirus pandemic.
At least 200 new stores will be opened this year, from its original target of 400. Businesses who were supposed to open 7-Eleven branches were given the choice to refund their investments, president and CEO Jose Victor Paterno said in a virtual press conference.
Franchise opening would be "case to case" basis for now, he said.
"We’ve offered a refund to any franchisee who has not broken ground on its store, if you want your money back, just tell us because we don’t believe it’s a good time to be opening stores but again its up to you," Paterno said.
"If you want to open your store, you are going to have to justify to us why it will do well. It’s a first time, obviously, turning away franchisees," he added.
Some 30 percent of its stores closed in March but at least 95 percent are now "fully operational" after Metro Manila and other areas emerged from the 11-week lockdown, Paterno said.
Demand for essentials and larger sized items has increased, however, people have less money to spend, Paterno said. Average purchase remains 50 percent lower compared to pre-pandemic levels, he said.
Although there is no number yet as to the stores that could potentially close this year, the company said the landlord's long-term commitment was part of the decision making.
"We sent that letter and it was sent in the spirit of transparency but also to serve as fair warning, "look we’re really struggling"…and we said "part of the consideration for which stores can survive would be which landlord is fairer in his views in terms of prioritizing the long term survival," Paterno said.
Paterno said they also launched a Pandemic Support Program in June worth P711 million as credit line for franchisees.
The company is also developing its CLIQQ digital ecosystem as revenues to e-wallets and bills payments increase due to the shift in consumer behavior, it said.
“We have moved past survival mode, and are harnessing the momentum that began in April to serve the very changed needs of our customers in a very changed environment at ever increasing speeds,” Paterno said.
Philippine Seven has 2,864 stores in the Philippines as of December 2019.