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]

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 Call 7-Eleven ‘Almost Pathological’

Via Courthouse News Service

RIVERSIDE, Calif. (CN) – After a Japanese corporation bought the 7-Eleven chain, it began illegal surveillance of franchisees, turned business owners into low-level employees, and pushed out hard-working South Asian immigrant store-owners, transforming “the American Dream into an American Nightmare,” a class action claims in Federal Court.

“Tragically, 7-Eleven has now become a cautionary tale of the dangers of corporate greed in the franchise context,” the complaint states. “7-Eleven has become an unfortunate example of the tragic results that occur when a franchisor ceases to consider its franchisees as valuable, independent contractors and business owners and to see them merely as disposable assets to be exploited for short-term profits, then discarded once their value has been extracted.”

FOAGLA Inc., a franchise owners association, and five 7-Eleven operators filed the lawsuit against 7-Eleven Inc., alleging racial discrimination, invasion of privacy and illegal surveillance retaliation against franchisees, and misclassification of employment relationship with franchisees.

Continue reading Franchisees Call 7/Eleven ‘Almost Pathological’ [Courthouse News Service]

7-Eleven Franchisees Fight Back

The Patel family owned and operated this 7-Eleven franchise in Riverside, California for 19 years. Recently, 7-Eleven seized the location claiming “excessive couponing” and forced the Patels to sign over the store despite asking for time to hire a qualified lawyer to represent them.

Franchising Wars: Besieged Franchisor Fights Back Against Disgruntled Franchisees

Via Gaebler

More than a dozen franchisees are suing 7-Eleven, alleging that the franchisor overstepped its legal bounds and unfairly terminated their franchise contracts. 7-Eleven says it had the legal grounds to terminate the franchise contracts.

The convenience store industry relies on franchising as part of its core business model. And like any other franchised business, many convenience stores live and die according to the terms of their franchise contracts.

But what happens when the franchisor is alleged to be using the franchise contract to unfairly target its franchisees?

That’s a question that at least a dozen 7-Eleven storeowners want answered–and they have filed lawsuits to obtain legal remedies for what they believe are unfair business practices by the popular franchisor.

According to the Dallas Business Journal and other sources, Dallas-based 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.

Continue reading Franchising Wars: Besieged Franchisor Fights Back Against Disgruntled Franchisees [Gaebler]