7-Eleven Franchisees Sue Retailer Over Management Control
SANTA CRUZ, Calif. — The National Coalition of Associations of 7-Eleven Franchisees (NCASEF) filed a lawsuit against its parent company, 7-Eleven Inc., claiming the retail company has not fulfilled its promise of treating the franchises as independent contractors and business owners.
NCASEF represents the owners of nearly 7,000 franchised locations in the United States.
The suit, filed in U.S. District Court for the Central District of California, challenges certain provisions of the 7-Eleven Franchise Agreement, and seeks monetary damages, attorney's fees and costs and other relief for claims relating to unpaid overtime wages and unreimbursed expenses.
Irving, Texas-based 7-Eleven could not be reached for comment.
According to the coalition, franchisees have long complained that the brand has been chipping away at their profits, increasing their costs, and exercising more control over what is supposed to be an independent operation.
Coalition Executive Vice Chairman Jay Singh said conditions imposed by the franchisor are threatening these businesses, many of which are family operations.
"Many of our members have operated 7-Eleven franchises for decades and are gravely concerned not only for their future, but the future of the brand they love and have invested so much in," Singh said.
Members point to increasing management control by 7-Eleven including, but not limited to:
- Taking away the opportunity of franchisees to possess and/or control monies generated from franchised stores;
- Directing franchisees to sell any good or service for less than the cost of acquiring and selling the same;
- Requiring franchisees to use equipment 7-Eleven specifies to operate franchise stores;
- Imposing a regressive royalty structure that penalizes franchisees for increasing sales; and
- Transferring responsibility for paying credit card processing fees directly to franchisees.
"We need to hold 7-Eleven accountable. We love this brand and are saddened by the way they have been treating the people who are the very heart and soul of the company," Singh added.
Santa Cruz-based NCASEF is the national trade association for 7-Eleven franchisees. Originally founded in 1973, NCASEF is comprised of 46 franchise association members who represent more than 4,700 7-Eleven owners in 33 states.
7‑Eleven Inc. operates, franchises and/or licenses more than 63,000 stores in 18 countries, including 10,900 in North America.