7-Eleven Takes Big Gulp Out Of American Dream

Via MintPress News

For South Asian immigrants to the United States, owning a 7-Eleven convenience store franchise has traditionally been a passport to the American dream.

The startup costs for a 7-Eleven franchise are low compared to fast-food and motel franchises — as little as $50,000. In a departure from the usual franchising model, the franchisor, 7-Eleven Inc., bears the expense of land, building and store equipment and also charges royalties based on the store’s gross profit, rather than a percentage of sales.

Last year, the National Minority Franchising Initiative included 7-Eleven in its annual list of the Top 50 Franchises for Minorities, commending its “exceptional record” of minority representation. Of the company’s franchise stores, the survey noted, 57 percent were minority-operated.

Just as the dry-cleaning industry is largely controlled by Korean-Americans, immigrants from India, Pakistan, Bangladesh and Sri Lanka have gravitated toward 7-Eleven, said Jas Dhillon, the owner of 7-Eleven franchises in the Los Angeles-area communities of Porter Ranch and Pacoima.

“It’s proven to be a success,” he told MintPress News in an interview.

But in a lawsuit filed earlier this month in federal court, a 7-Eleven franchisee group and five individual franchisees, including Dhillon, paint a very different picture, accusing Dallas-based 7-Eleven Inc., which is now owned by a Japanese corporation, of “an aggressive and discriminatory campaign” against South Asian franchisees.

“[A] foreign corporation has been allowed to transform the American Dream into an American Nightmare for countless individuals and families,” the Franchise Owners Association of Greater Los Angeles and its co-plaintiffs allege.

The suit says 7-Eleven management, at the behest of Japan’s Seven & I Holdings Co., has harassed and intimidated franchisees and falsely accused them of wrongdoing “as part of a larger corporate effort to terminate their successful franchise stores and take the stores back at no cost. 7-Eleven then ‘churns’ or re-sells the stores, realizing a windfall profit [from] new franchisees.”

South Asians have been targeted, the plaintiffs say, because of “cultural vulnerabilities” including deference to authority and fear of being shamed if allegations of impropriety become public. In a separate case, Dilip and Saroj Patel, an elderly couple who owned a franchise in Riverside, California, allege they signed away their store in December 2013 after being subjected to an eight-hour interrogation by 7-Eleven “asset protection” investigators.

Continue reading 7-Eleven Takes Big Gulp Out Of American Dream [MintPress News]

California Franchisees Accuse 7-Eleven of Racial Discrimination

Via LA Times

A new organization of California 7-Eleven franchisees is suing the convenience store chain, alleging the company violated store operators’ civil rights through racial discrimination, as well as other complaints.

The Franchise Owner’s Assn. of Greater Los Angeles, along with other franchisee organizations, says it represents more than 1,200 members who are accusing 7-Eleven Inc. of racial discrimination, invasion of privacy and illegal surveillance and mistreatment.

The suit, filed Friday in federal court in Los Angeles, is the latest list of allegations aimed at the Dallas company, which is owned by Seven & I Holdings Co. in Tokyo.

The group said it does not want any money from 7-eleven, but is asking for a court declaration affirming that 7-Eleven’s actions are in violation of both federal and California state laws.

More than a dozen franchisees around the nation have sued 7-Eleven in the last two years, claiming they were stripped of their stores illegally, without evidence and any compensation. Some plaintiffs say 7-Eleven targeted successful stores in high-traffic areas, then flipped them to new franchisees willing to pay the company higher fees.

Continue reading California Franchisees Accuse 7-Eleven of Racial Discrimination [LA Times]

Franchisees Allege Hardball Tactics, Store Seizures by 7-Eleven

Via LA Times

7-Eleven relies on thousands of franchisees to sell millions of Slurpees, Big Bite hot dogs and other snacks.

But in the last two years, at least a dozen franchisees have sued the company, alleging it stripped them of their stores for bogus reasons. Some plaintiffs say 7-Eleven targeted successful stores in high-traffic areas, then flipped them to new franchisees willing to pay the company 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.

Continue reading Franchisees allege hardball tactics, store seizures by 7-Eleven at LA Times.

Related

Franchisees Allege 7-Eleven ‘Flipped’ Their Stores [CSPnet]
Franchisees sue 7-Eleven over loss of their stores [Dallas Business Journal]
Franchisees allege hardball tactics, store seizures by 7-Eleven [Columbia Daily Herald]

NJ Franchisee Says 7-Eleven is Forcing Him Out of Business

Amid Haddad, a 7-Eleven franchise owner since 2001, says he is being “squeezed out” by 7-Eleven and is asking for his customers help to battle the corporate giant. Haddad says that 7-Eleven Inc. made recent business decisions to eliminate smaller franchisee owners. As a result, he is facing an uphill battle to keep his store.

They have disabled my lottery machine, my money-order business, and are preventing me from being able to order through the corporation,” said Haddad in a recent interview.

Haddad, an Egg Harbor Township resident, has a family and is trying to put one child through college.

To represent his business interests, Haddad has hired a lawyer: Jerry Marks of Marks & Klein, LLP in Red Bank, N.J.

They (7-Eleven) are in violation of the New Jersey Franchise Practices Act,” said Marks. “They have given him no written notices regarding any termination of services, and are preventing him from making a living.”

Marks said he is developing a lawsuit against 7-Eleven, and may join class-action suits being formed.

This isn’t the first time 7-Eleven has used intimidation tactics on their franchisees. Andy Kahn, a 7-Eleven franchisee of 34 years, is suing the company for stalking, harassment, intentional infliction of emotional distress and for running him down outside a CVS Pharmacy.

Franchisees Dilip and Saroj Patel are also 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.

Brigantine 7-Eleven owner feels company is trying to force him out of business [Brigantine Beachcomber]

Franchisee Lawsuit Alleges 7-Eleven “Storm Trooper” Tactics

Via Unhappy Franchisee

A lawsuit filed against 7-Eleven, Inc. yesterday in the U.S. District Court for the Central District of California alleges that 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.

The lawsuit, filed by Marks & Klein, LLP of Red Bank, NJ and Schindler Law Group on behalf of long-time 7-Eleven franchisees Dilip and Saroj Patel, alleges that 7-Eleven’s aggressive Asset Protection/Loss Prevention team seized the Patel’s Riverside, CA franchise without warning as “part of a wider, nationwide 7-Eleven scheme to improperly intimidate and terminate long-term franchisees, with the goal of acquiring their successful stores.”

According to the lawsuit (Dilip Patel, Saroj Patel, and Saroj Patel, Inc., v. 7-Eleven, Inc., a wholly-owned subsidiary of Seven Eleven Japan Co. LTD, a wholly-owned subsidiary of Seven and I Holding Co., LTD.), “the sole purpose of acquiring these stores – albeit through illegal means – is to ‘take back’ the stores, at no cost, with the intent to ultimately re-sell the store, for a fee, to a third-party purchaser.”

“7-Eleven’s efforts to terminate franchisees and take-back stores have been tremendously profitable for 7-Eleven,” the suit alleges.

“…the amount received by 7-Eleven in reselling taken-back stores is in excess of ten million dollars.”

Continue reading 7-ELEVEN Patel Franchise Lawsuit Alleges 7-11 “Storm Trooper” Tactics [Unhappy Franchisee]