No 7-Eleven

Resisting Chain Stores and Corporate Control


Yet Another Lawsuit Brought Against 7-Eleven

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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

7-Eleven Lawsuits
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

Dev Patel - 7-Eleven
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’

7-Eleven: The American Nightmare

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

Dev Patel - 7-Eleven Stole Our StoreThe 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]


Franchisees Allege Hardball Tactics, Store Seizures by 7-Eleven

Franchisees allege hardball tactics, store seizures by 7-ElevenVia 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]


ANOTHER Franchisee Sues 7-Eleven Over Attempted Seizure of Stores

Another 7-Eleven Franchisee Sues 7-ElevenIt sure is a bad time to be a 7-Eleven franchisee. Yet another 7-Eleven franchisee is suing 7-Eleven, alleging the corporation demanded he turn over his stores.

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]