No 7-Eleven

Resisting Chain Stores and Corporate Control

7-Eleven Retaliates Against Outspoken Franchise Owner

7-Eleven RelatiatesJust 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.

One week after his interview on WBEZ, two Senior Vice Presidents from 7-Eleven came unannounced for a surprise inspection of his franchise. 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.

In the past such letters and violations have lead to 7-Eleven swooping in and taking over the location.

Jas Dhillon, a 7-Eleven franchisee in Los Angeles and vice chair of the National Coalition of Associations of 7-Eleven Franchisees says “This is nothing but retaliation. We carry over 2,500 items in our store, from soda pops to candies to hot dogs to magazines to lottery tickets. Being out of stock of 17 — that’s less than 1 percent. Any given day, not just at 7-Eleven, at any of the other stores, you’re going to have items that we run out of, especially when you just had a hot weekend.”

Dhillon said 7-Eleven was trying to silence Syed and pointed out that the Chicago franchisee once won a national award from the company because, Dhillon said, “he ran the best store in the country.”

When questioned about the incident, 7-Eleven spokesperson Margaret Chabris issued a written statement that said her company “does not discuss publicly matters concerning our relationships with individual 7-Eleven franchisees.” Asked whether the 7-Eleven letter to Syed came in response to his WBEZ interview, Chabris did not answer the question.

7-Eleven is known for intimidating their franchisees. Currently, 7-Eleven is harassing a franchisee in New Jersey, going so far as to turn off his lottery machine, his money order machine and preventing him from placing orders through the corporation.

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.

Outspoken 7-Eleven Franchisee Gets “Retaliatory” Visit [Unhappy Franchisee]
7-Eleven warns Chicago franchisee who criticized company [WBEZ]


7-Eleven Franchisee Tells NPR, We Are “Glorified Managers” [No 7-Eleven]

7-Eleven Makes Manhattan Borough President Want To Puke

If the sight of another 7-Eleven makes you want to puke, you’re not alone!

Gale Brewer, Manhattan Borough President, was speaking at a CityLaw Breakfast Series event this week regarding the various borough presidents’ priorities, when she was asked a question on promoting local business.

“We have the chain stores. I hate to say this, but if I see one more 7-Eleven, I’m going to throw up. I think it’s a very important issue, particularly for Manhattan,” Ms. Brewer continued. “The other boroughs, to be honest with you, do not have as much of a challenge. Because I asked every single one of my 51 colleagues, ‘Is this a problem?’ And it was primarily in Manhattan.”

7-Eleven currently has 37 locations in Manhattan – up from 8 just a few years ago – and plans an additional 100 locations by 2017. 7-Eleven has shuttered two local businesses – that we know of – Gramercy Corner and Kyung’s Gourmet Deli by opening locations right next door to them.

Ken Barnes, 7-Eleven’s director of northeast regional development, has said “We can’t open more New York locations fast enough. Every neighborhood is a target.” 

7-Eleven’s spokesperson, Margaret Chabris, admits 7-Eleven’s Corporate Manifest Destiny is the result of the bad economy in 2008, stating that, in NYC, “a lot more desirable locations are available because many businesses have had to retract because of the recession.

Manhattan Borough President Not a Fan of 7-Eleven [Politicker]

7-Eleven AC Units Force Residents To Abandon Their Bedrooms

7-Eleven Westminster Illegal AC Units

7-Eleven Westminster Illegal Refrigeration Untis

7-Eleven Westminster Illegal Refrigeration Units

Last week, we had an update on 7-Eleven and Westminster Management’s illegally placed AC and refrigeration units at the newish Avenue A 7-Eleven which, so far, have racked up $17K+ in fines. Today, we hear first hand from tenants who live in these buildings how the plethora of units outside their windows impact their lives, for example, like not being able to sleep in their bedrooms.

Three illegally placed AC units clutter the small alley between 500 and 502 East 11th St. The large, industrial units block the first floor side window of 502 East 11th St and, when active, create a constant hum, banging and vibration (let alone blocking any light that made its way to the first floor window) and establish an unlivable environment for the first floor tenant (of which there is only one).

The illegal refrigeration unit is placed on the one story roof between 500 and 502 East 11th St. immediately outside of the bedrooms of four separate, second floor apartments (two in each building). This unit significantly violates the noise pollution laws (twice cited by the DEP). The noise and vibrations that this unit emits have resulted in tenants in 502 East 11th St. to abandon their bedrooms and re-position their entire family in the living room. The noise is constantly grinding, clicking, and vibrating making it unbearable for ALL the tenants on all the floors between the two buildings — one of whom is a freelance film editor who is now unable to work at home. ALL tenants are suffering in one form or another.

Dozens of calls have been placed to 311. The Department of Environmental Protection has come to take noise measurements two times, each time resulting in a significant violation. Both 7-Eleven and Westminster refuse to relocate the refrigeration unit to either the basement (where it belongs) or to the roof of 500 East 11th St. (a viable alternative).

In one month, the tenants will request another noise reading; and once the violation is issued, Westminster will be taken to court where a judge may require that the refrigeration unit be removed immediately or the establishment (7-Eleven) closed.

7-Eleven has a sore arm from patting themselves on the back recently over their new Amazon lockers and KeyMe kiosks.

“We have to stay on top of what the consumer wants,” said Margaret Chabris, director of public relations at Dallas-based 7-Eleven. “Our ultimate goal is to provide products and services that solve the everyday problems for our customers in making their lives better.” [Source]

Hey Margaret, 7-Eleven has created problems, lots of problems, for the very people you are desperate to win over. The “consumers” and their families want to sleep in their bedrooms. Solve that every day problem.

Related Posts

7-Eleven / Westminster Rack up $17K+ In Fines

Neighbors Need Relief From 7-Eleven

Westminster Management VS 7-Eleven

Work Continues at 7-Eleven Despite Stop Work Order

Thank Heaven! A New DOB Violation for 7-Eleven!

Partial Stop Work Order Posted at 7-Eleven Site

NYC DOB Issues Partial Stop Work Order on 7-Eleven

Thank Heaven! A 7-Eleven AC Unit Outside Your Bedroom Window!

Westminster Management VS 7-Eleven

Westminster VS 7-ElevenWestminster Management is the property manager for 170 Avenue A, the location of the new 7-Eleven. Workers onsite at 7-Eleven claim it is in fact Westminster who is responsible for racking up the Partial Stop Work Orders issued this month by the NYC DOB for 7-Eleven’s placement of 3 industrial AC units 14 inches from residents windows. The DEP is taking Westminster Management to court over the refrigeration unit on the roof which blocks access to a fire escape. Earlier this month, 7-Eleven brazenly disobeyed the Partial Stop Work Orders and marched on with their construction as caught on camera by a neighbor.

7-Eleven spokesperson, Margaret Chabris, has been suspiciously quiet on the Partial Stop Work Orders issue, probably due to her non-stop damage control relating to press confusion surrounding 7-Eleven’s mysterious new guinea pig store, all those health code violations in DC, the human trafficking scandal, distancing the company from employees weilding guns and a bloody clown robbery. Seriously, reading the news on 7-Eleven is like watching a COPS marathon on SPIKE TV.

7-Eleven Manhattan

Anyway… EV Grieve has a post this morning with some interior shots of the 7-Eleven. The sad Slurpee shack sits lifeless at the cost of $30k per month. Yes, that’s what 7-Eleven is currently paying for the space. There isn’t a franchisee slotted for the store either. So, the question remains, who is responsible for correcting the host of issues preventing the 7-Eleven from opening, Westminster or 7-Eleven? Since neither side is talking we’ll just have to wait and see. One thing we know for sure, there is no way this 7-Eleven is opening by October 31st.

7-Eleven Sued for Representing Itself as Franchisor

7-Eleven Lawsuit

Three years ago, convenience store chain 7-Eleven basked in the limelight of being featured on CBS’s Undercover Boss. Today the world’s largest convenience store chain is under a different spotlight.

The franchisor is now fighting negative press surrounding its litigation against franchisees, as well as a federal investigation of human trafficking charges against its stores in New York, Virginia, and possibly other states. This week the 60-year old company learned it has a new battle to fight.

A lawsuit filed in New Jersey federal court on Wednesday against 7-Eleven, Inc. and its Japanese entities accuses the franchisor of fraudulent business practices and abuses, related to misclassifying employees as independent contractors.

Those abuses include manipulating the terms of the franchise agreement to deprive franchisees of equity in their stores, and discriminatory measures against certain store owners, those of Asian, Pacific Rim and Middle Eastern descent. The complaint claims the abuses have altered 7-Eleven’s business relationship with its store owners.

Gerald A. Marks, Louis D. Tambaro and Evan M. Goldman of Marks & Klein are representing the franchisees in the lawsuit, filed under Tamer G. Atalla, Neil Naik, Hemang Patel, Jayesh Patel, Kalpana B. Patel, and John Does 1-200. Lead counsel Jerry Marks said they now have additional franchisees who have joined the litigation. “We have approximately 60 people signed up, who will be added when we amend the complaint. I am looking to take this lawsuit nationwide.”

7-Eleven, employer in disguise

7-Eleven’s franchise agreement clearly states that their agreement “creates an arm’s-length business relationship” between independent contractor and franchisor. But Marks & Klein attorneys allege 7-Eleven is only attempting to insulate itself from franchisee claims that they are an employer. The complaint asserts, “7-Eleven, in actuality, significantly controls the day-to-day operations of its franchisees, rendering the parties’ relationship one of de facto employment.

That control is displayed in many areas of its operation listed here:

  • Regulation of vendors and product supply
  • Processing franchisees’ payroll through its owner internal payroll system
  • Regulation of product pricing, advertising and promotional materials
  • Intense daily oversight by market and zone managers of franchisee operations
  • Requirement that franchisees wear 7-Eleven emblazoned uniforms
  • Franchisees cannot control the volume on their televisions and, rather, 7-Eleven controls that from their corporate headquarters in Dallas, Texas.
  • Franchisees are unable to change the temperature in their store and, rather, 7-Eleven controls that from their corporate headquarters in Dallas, Texas
  • Bookkeeping and all accounting done by corporate; and
  • Franchisees cannot withdraw money without corporate approval

By ignoring its true relationship with franchisees, the franchisees claim they are deprived of many employment-related benefits, including the following Federal Insurance Contributions Act (“FICA”) tax; social security withholding; unemployment, health insurance, and workers’ compensation.

There is another big issue. The alleged employment relationship is also based on the fact that 7-Eleven and its franchisees are engaged in the same type of business, and franchisees are not permitted to engage in business activity outside of 7-Eleven operations in their role as franchises.

7-Eleven, as an employer, would also be responsible for I-9 forms, to ensure compliance with immigration laws. As an alleged franchisor, they currently delegate that duty to franchisees.

7-Eleven’s additional violations as franchisor

Franchisees in the lawsuit also claim that 7-Eleven, as a franchisor, is unfairly competing with other brands. While other convenient stores in the area operate similarly to 7-Eleven, providing customers with food and beverage on a 24-7 basis, they are at a disadvantage. WaWa, Inc. and QuickChek have approximately 300 to 500 stores in New Jersey and New York, but they are properly classified as employees. That gives 7-Eleven the advantage of not providing employment-related benefits to its misclassified employees.

The lawsuit also states that 7-Eleven is in violation of rules established by the Securities Exchange Commission. “As 7-Eleven franchisees are nothing more than glorified employees, 7-Eleven is selling security interests to these franchisees/employees (by way of their franchise investment) without proper disclosure.” It asserts that is in violation of securities laws.

Marks & Klein are claiming four counts against the franchisor. Those counts include violation of New Jersey’s franchise act, wage and hour laws, and law against discrimination. It also lists breach of implied covenant of good faith and fair dealing.

Parties respond

Jerry Marks declared, “This case is groundbreaking. When we succeed in proving store owners are employees, we will see to it that the 7-Eleven operators are fairly compensated for what they are due. That will include overtime pay, medical expenses, and pension benefits.” He said the employees will also be reimbursed the money they invested in the franchise, proving that the company violated various security laws. “Store operators will be entitled to all that money, including interest and penalties.”

Margaret Chabris, 7-Eleven director of communications, declined any interviews, stating, “The matter is in litigation, and at this time we are declining requests for public comment.”

During the Undercover Boss segment in February 2010, 7-Eleven CEO Joseph DePinto, who went undercover, stated, “There’s been a lot of bad press—some of it rightfully so—about bosses taking advantage of situations or not leading the right way. A lot of companies failed because of this.”