Yet Another Lawsuit Brought Against 7-Eleven

Here we go again.

7-Eleven franchisees in Holyoke, Massachusetts are taking the corporation to court to keep their Slurpee machine and other income generating items like lottery tickets, hot dogs and gift cards. The 7-Eleven corporation revoked these services from franchisees Mohinder Grewal and Mann Grewal claiming the husband and wife had an unexplained $131,000 cigarette shortage during an 18-month period. The franchisees claim the frivolous lawsuit is the result of their refusal to stock unpopular items that didn’t sell well.

If this sounds familiar it’s because this is 7-Eleven’s go-to tactic to punish franchisees they consider subordinate. According to the Dallas Business Journal and other sources, 7-Eleven Inc. is the defendant in more than twelve lawsuits alleging that the company terminated franchise contracts without proper cause. Plaintiffs in the suits claim that 7-Eleven targeted stores in high-traffic locations, enabling the franchisor to offer the locations to new franchisees willing to pay higher fees.

Dilip Patel and his wife, Saroj, said the company used “storm trooper interrogation and isolation tactics” in such sessions. The couple, who sued in March, ultimately gave up their Riverside store, which they had run since 1995, with no compensation from 7-Eleven. It’s gotten so bad in California that The Franchise Owner’s Assn. of Greater Los Angeles was created. It represents more than 1,200 members who are accusing 7-Eleven Inc. of racial discrimination, invasion of privacy and illegal surveillance and mistreatment.

Holyoke 7-Eleven fighting to save Slurpee-selling rights in U.S. District Court [Mass Live]

This Franchisee Lawyer Keeps Dreaming Up New Ways to Sue 7-Eleven

Via Business Insider

Gerald Marks has spent the last year suing 7-Eleven. The New Jersey lawyer is representing plaintiffs in a dozen lawsuits against the Dallas-based chain, including allegations that 7-Eleven violated labor laws, an anti-stalking statute, and discriminated against immigrant business owners. Marks’ latest action, filed last week in federal district court in New Jersey, seeks back pay for a group of 7-Eleven corporate employees and paints the chain as a bully that uses its heft to push franchisees out of their stores. 7-Eleven disputes the allegations.

In his most extreme accusations, Marks says that 7-Eleven targets South Asian immigrant store owners in profitable markets, looking for contractual breaches to give the 53,000-store chain leverage over its franchisees. If a franchisor can convince a store owner to walk away from his franchise license, the company can re-sell the store to another buyer. In legal filings, Marks has alleged that 7-Eleven has made more than $10 million off the strategy.

Continue reading This Franchisee Lawyer Keeps Dreaming Up New Ways to Sue 7-Eleven [Business Week]

7-Eleven Franchise Owners Stage Protests Against Joe DePinto

Via Unhappy Franchisee

7-ELEVEN Franchisee Protest Photos: 7-Eleven franchise owners continue to stage protests against their franchisor 7-Eleven, Inc., CEO Joe DePinto, parent Seven and I Holdings Co. and Seven and I Chairman Toshifumi Suzuki.

The photos below were taken at a 7-Eleven protest outside of CBS Studio Center, 4024 Radford Ave, Studio City, CA on August 27, 2014 and posted to Flickr by dukhiloga.

Information by dukhiloga indicates that 7-Eleven Joe DePinto was at CBS Studio Center for business-related taping. Other 7-Eleven personnel were also spotted entering CBS. Joe DePinto was reportedly spotted in a black SUV, which quickly sped away from 7-Eleven franchisee protesters.

Continue reading 7-ELEVEN Franchisee Protest Photos [Unhappy Franchisee]

BREAKING: 7-Eleven Owners Plead Guilty to Human Trafficking

House of Horror: This dilapidated house in Islip Terrace, Long Island was used by several 7-Eleven franchisees as a modern day plantation.

Via The New York Post

A crew of crooked 7-Eleven franchise owners pleaded guilty to setting up a “plantation” system for illegal alien employees to increase profits at their Slurpee strongholds in Virginia and Long Island, according to the feds.

Five defendants copped to knowingly hiring illegal aliens, siphoning off their earnings and forcing them to live in dingy boarding homes scattered across Suffolk County, according to court papers.

The scheme skimmed a total of $2.6 million that was owed to the workers, court papers state.

“Using the 7-Eleven brand, the defendants dispensed wire fraud and identity theft, along with Big Gulps and candy bars,” said US Attorney Loretta Lynch in a statement. “In our backyards, the defendants not only systematically employed illegal aliens, but concealed their employment by using the names of children and even the dead.”

Mastermind Farrukh Baig — a Pakistani bigshot who counts former Prime Minister Pervez Musharraf as a pal — faces up to 20 years in prison at his sentencing.

Continue reading 7-Eleven owners admit ‘plantation’ system to boost profits [NY Post]

Related

NY couple admits exploiting 7-Eleven workers [Washington Post]
5 Plead Guilty on Long Island to Exploiting 7-Eleven Immigrant Workers [7 Online]
LI husband and wife 7-Eleven owners plead guilty to exploitation scheme [Newsday]
7-Eleven immigration sting suspects plead guilty [Suffolk Times]
NY couple admits exploiting 7-Eleven workers [Daily Record]
7-Eleven Chain Busted For Hiring Illegal Workers And Stealing Identities Of Americans [Inquisitr]

California Bill Would Help Protect Franchisee Business Investments

Via Business Insider

LOS ANGELES – When Kathryn Slater-Carter learned her family would lose $1.5 million after McDonald’s Corp did not renew the franchise agreement on one of their restaurants in the San Francisco suburbs, she tried for a second time to change state law to protect franchisee investments.

That renewed effort may bear some fruit. California lawmakers in August passed the new bill she championed and Governor Jerry Brown has until Sept. 30 to sign or veto it.

At present, California law only requires franchisors that terminate or fail to renew a franchise agreement to offer to repurchase a franchisee’s inventory.

Among other things, the pending legislation known as SB 610 would require a franchisor that terminates an agreement without a material breach to compensate the franchisee for the fair value of their business, or to provide them an opportunity to sell.

The watered-down law passed by lawmakers would not have prevented the equity loss Slater-Carter says her family suffered when their McDonald’s restaurant in a Daly City, California, shopping mall was forced to close, but “it’s a start,” she said. The franchise agreement on her family’s one remaining Daly City restaurant expires in 2016.

A spokeswoman for McDonald’s said that the mall restaurant closed because the franchise and lease agreements each expired. She added that the company did not play a part in that timing.

Groups representing big companies and franchisees have clashed over the bill in what some experts say is one of California’s biggest business battles this year.

The International Franchise Association (IFA), a trade group representing McDonald’s and other well-funded franchisors, led the opposition. They warn that the legislation could weaken a franchisor’s ability to enforce brand standards, damage franchisee equity by protecting weak operators and result in frivolous lawsuits.

Supporters are a coalition that includes the American Association of Franchisees & Dealers and the Service Employees International Union, which has backed fast-food worker protests at franchisee-owned restaurants. They say changes are long overdue and that other states, including Washington, have stronger laws in place.

“It gives us a little bit of protection against termination and retaliation,” said Jaspreet Dhillon, chairman of the California 7-Eleven Franchisee Political Action Committee. “The bill won’t solve everything, but it allows us to sleep at night.”

Franchisor 7-Eleven Inc, owned by Tokyo-based Seven & I Holdings, in the last two years has been hit with roughly a dozen lawsuits in which franchisees alleged that it drummed up reasons to take away their convenience stores.

A 7-Eleven spokeswoman said those allegations are false and that the company ends relationships with the “few franchisees who violate the law or the franchise agreement” to protect other franchisees, employees and customers.

A 2012 franchisee protection bill spearheaded by Slater-Carter died in committee.

California Bill Would Help Protect Franchisee Business Investments [Business Insider]