Karamjeet Sodhi bought his first 7-Eleven franchise 26 years ago in New Jersey and now has six locations, all of which 7-Eleven is trying to seize. According to a report on Unhappy Franchisee, 7-Eleven accused Sodhi of several violations including fraud, claiming he claiming he broke their franchise agreement by under-reporting his store revenues so that he wouldn’t have to share that money with 7-Eleven. Sodhi fired back with a lawsuit, partnering with Jerry Marks, a lawyer who claims 7-Eleven is also targeting other franchisees in New Jersey, New York and California. Marks filed countersuits in Camden Federal Court.
Via Unhappy Franchisee:
“We suspected that 7-Eleven had a plan to take over stores — stores that were really good stores,” Marks said.
It’s called churning — seizing a franchise and reselling it at a profit. Sodhi bought this franchise for $385,000. Now he figures it’s worth at least double that.
“My stores are very good stores, they are high-volume stores. They want to take it back — free — and sell it to other people,” said Sodhi.
In addition to Sodhi’s franchise, 7-Eleven is in court with several other franchisee owners who claim 7-Eleven is illegally seizing their locations over trumped up, minor infractions or for being too outspoken.
Amid Haddad, a 7-Eleven franchise owner in NJ since 2001, says he is being “squeezed out” by 7-Eleven and is facing an uphill battle to keep his store. 7-Eleven has gone so far as to turn off his lottery machine, disabled his money-order business and preventing him from placing product orders through the company.
CA franchisees Dilip and Saroj Patel are suing 7-Eleven alleging the company the convenience store giant is using “storm trooper” tactics to illegally seize valuable franchise rights from its franchisees in order to resell them for millions of dollars.
Adnan “Andy” Khan, a successful, multi-unit franchise owner who was the 2008 Franchisee of the Year is suing 7-Eleven, Inc. for stalking, harassment, intentional infliction of emotional distress, and for running him down outside a CVS Pharmacy. A lawsuit filed on Andy Khan’s behalf in U.S. District Court for the Central District of California alleges that the profitability of Andy Khan’s high-volume stores, along with his active and influential role in the 7-Eleven franchisee community, has made him a target for forced expulsion from the 7-Eleven franchise system.
Just one week after 7-Eleven franchisee Hashim Syed told WBEZ the corporation treats their franchisees like “glorified managers,” 7-Eleven retaliates with a surprise visit and list of violations. The very next day, Syed received a letter stating he was violating his franchise agreement by not using a hot dog grill as required and for several items being out of stock.
7-Eleven Franchisee Sues Company for Trying to Seize Stores [Unhappy Franchisee]