7-Eleven Franchisees Sue Company for Lagging Behind Competition

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7-Eleven Franchisees Sue Company for Lagging Behind Competition


CHERRY HILL and CAPE MAY, N.J. -- Two 7-Eleven Inc. franchisees in southern New Jersey are feeling let down by their parent company -- to the point where they are bringing the c-store chain to federal court.

According to a report by the Courier-Post, Sam Younes of Cherry Hill, N.J., and Tamer Atalla of Cape May, N.J., are suing 7-Eleven, saying the company "failed to change its stores, products and marketing despite the ever-changing market and the expectations of consumers." They also allege that sales and profits at their stores have fallen "due to the competition and the lack of a response by 7-Eleven."

The lawsuit notes that 7-Eleven is not dominant in the local market, even though it operates approximately 8,600 stores in the United States and Canada. In comparison, the franchisees point out that local competitor Wawa Inc. has just 595 stores in the mid-Atlantic region and central Florida.

"The convenience store business in the southern New Jersey area has become dominated by a competitor of 7-Eleven," the lawsuit states, most likely referring to the Wawa chain, the newspaper reported.

Younes and Atalla cite other complaints including the temperature of their stores, the sound of television ads and the contention that 7-Eleven is slow to perform maintenance for small stores with low gross sales. The store operators also say 7-Eleven has created an environment so hostile that they will have to end their relationship with the company.

Younes and Atalla each paid franchisee fees between $100,000 and $150,000, the lawsuit states. They are asking for lost profits and punitive damages, as well as legal expenses.

An attorney for 7-Eleven, Kimberly Lippman of Cherry Hill, declined to comment to the news outlet regarding the suit pending in Camden, N.J., federal court. It is known, however, that 7-Eleven has asked for the lawsuit's dismissal, arguing it was not properly served with legal papers.

When contacted by CSNews Online, 7-Eleven Inc. declined to comment because the matter is in litigation and the comments made in the Courier-Post article are “simply allegations.”